Autoblog: Ford's quality turnaround leads to free money

[monkeyboy]

Filed under: Car Buying, Recalls/TSBs, Ford, Lincoln, Mercury

Ford's quality record at the beginning of this decade was so bad, the automaker was spending billions on warranty repairs, while simultaneously turning off potential buyers in droves. The blue oval has been righting the ship for the past couple of years, with vehicles like the Fusion and Taurus leading a quality renaissance that has the automaker nipping at the heels of its Japanese competition. That quality improvement has been cutting losses, with $900 million in savings achieved in 2007, and more on the way. The embattled automaker is forecasting an additional $300 in savings for 2008, which means Ford is expecting additional quality improvement. The money will eventually be used to finance new product, but for now the cash infusion is merely stemming Ford's substantial North American losses. There is little doubt that newer models like the Edge and Milan are far more reliable than what Ford was making even three or four years ago. The trick will be to convince the public to forgive Ford for its past woes and give the automaker another chance.

[Source: Detroit News]
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[Stuart]

This is interesting.
It seems companies never seem to learn that quality has a cost, until they feel real pain.

I argiue this case on a weekly basis, but short term revenue always wins through. Even though it is self defeating.