Ford skid in ratings true test of mettle, Low reliability rank in magazine calls for proactive response
October 30, 2012
Ford skid in ratings true test of mettle
Low reliability rank in magazine calls for proactive response
By DANIEL HOWES
Could another crack be appearing in the foundation of Ford Motor Co.’s rebound?
In a survey garnering keen attention at the highest levels of Ford and its Detroit rivals, influential Consumer Reports said Monday that the reliability of Blue Oval-brand vehicles plunged to second to last in its annual assessment of 28 brands — and Lincoln placed only one spot higher.
The influential magazine for discerning car buyers attributed Ford’s steep slide to a perfect storm of problem-plagued launches (Fiesta, Focus and the Explorer SUV) and continuing problems with the MyFord Touch infotainment systems. Also problematic for Ford has been the PowerShift manual transmission imported from Europe for the Focus compact.
The dismal showing and the stronger performance of Ford rivals are reminders that staying at or near the top can be as difficult as getting there. They’re also evidence that CEO Alan Mulally’s widely touted turnaround is less than perfect — would-be customers are getting more reasons to shop elsewhere.
That ain’t good, no matter how well Ford is faring in “shopping consideration” and “purchase intent” numbers compiled by Edmunds.com. Make a few too many bold missteps with technology and take too long to fix the problem, and an asset like Ford’s revived product cred can be squandered in an age where information and bad news travels at the speed of light, 24-7.
“It’s brutal,” a ranking source familiar with the situation said of the Consumer Reports reliability rankings. “It’s tough. They’re going to be in a hole here until they get this ironed out. It’s extremely urgent, but it’s not panic.”
Not surprising inside Mulally-era Ford. Like its hard-nosed response to rapidly deteriorating business conditions in Europe, where the company expects to lose $1.5 billion this year, Ford is tackling nagging problems with its infotainment systems, complaints with transmissions and problems plaguing recent launches in a way similar to its deep restructuring of North America, its product portfolio and the global operating structure:
First, do not tolerate denial. Second, acknowledge the problem and listen to the complaints from real customers paying real money for cars and trucks they expect to work properly. Third, devise fixes to existing systems. And, fourth, accept public criticism of the problems as legitimate because it is.
“Clearly, Ford is not off the hook,” Michelle Krebs, a senior analyst at the online car-shopping site, Edmunds.com, said in an email. “Ford needs to take the criticisms of its infotainment systems and other quality issues noted by Consumer Reports— as well as others who have lodged the same criticism —seriously and fix them.
“They also need to take good care of current customersexperiencing these problems.Lack of action in either regard could hurt Ford’s sales and reputation.”
The temptation here is to lambaste Ford for reaching too far in its product development, to argue that its quest to claim younger, hipper buyers with leading technology ended up being a figurative bridge too far for a Detroit automaker. Partly, as I have said repeatedly.
But as much as MyFord Touch, to name one controversial step, may symbolize over-reach by the Dearborn automaker, an organization that first steps out, stumbles and then corrects itself is an organization that learns from its mistakes, makes fewer of them in the future and can still reap the benefit of first-mover advantage.
Fair enough, but Ford’s bootstraps workout is not without its flaws. The unintended consequences of simplifying the product portfolio have produced a lineup that generates excitement akin to household appliances; the reach to claim tech leadership inside the cabin has boomeranged into a series of embarrassing problems; whatever luxury strategy exists is a generation or two behind the closest competitor.
A measure of good management is not whether it can avoid every pitfall because even the best never can. The test for customers, investors and employees is whether leadership recognizes its mistakes and how effectively it responds to them — a test Ford is taking right now.