EL5_Zero
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Ford is getting killed by warranty costs (msn.com)
“The warranty challenges are frustrating for investors, as they come on the heels of many other warranty issues in past years and at times drag results without warning,” Barclays analysts led by Dan Levy wrote in a research note.
Last year, Ford spent $4.8 billion fixing customers’ cars. Early this year, the automaker held some 60,000 redesigned F-150 pickup trucks in lots around Detroit for extra quality checks. Chief Executive Officer Jim Farley said that helped the company avoid 12 recalls and said that would be the process going forward for all new models.
Farley said Ford is now “testing vehicles to failure” and running them “at extremely high mileage” to discover quality problems before they reach customers. It will take as long as 18 months to see the benefits of that new process show up in lower warranty costs.
“It makes our quarters lumpy and it’s challenging, but it will reduce warranty over time,” Farley said.
“The warranty challenges are frustrating for investors, as they come on the heels of many other warranty issues in past years and at times drag results without warning,” Barclays analysts led by Dan Levy wrote in a research note.
Last year, Ford spent $4.8 billion fixing customers’ cars. Early this year, the automaker held some 60,000 redesigned F-150 pickup trucks in lots around Detroit for extra quality checks. Chief Executive Officer Jim Farley said that helped the company avoid 12 recalls and said that would be the process going forward for all new models.
Farley said Ford is now “testing vehicles to failure” and running them “at extremely high mileage” to discover quality problems before they reach customers. It will take as long as 18 months to see the benefits of that new process show up in lower warranty costs.
“It makes our quarters lumpy and it’s challenging, but it will reduce warranty over time,” Farley said.
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