Ford to appoint new head of quality to rein in warranty costs

Ford is looking to make a major leadership change to address quality issues in a move aimed at stopping millions in losses stemming from massive recalls and warranty expenses.

The details: The announcement – which was reportedly shared internally with some Ford employees last week – includes the appointment of a new head of quality at Ford, although a person has yet to be named for the position.

• Currently, Jim Baumbick serves as head of quality at Ford, a role he has held since late 2022.

• Baumbick will now take over the entire vehicle programs team, including EVs and ICEs.

• Ford says the changes will allow its teams to “collaborate and work more efficiently to deliver exciting vehicles and software with the highest levels of quality for our customers.”

Between the lines: For the past few years, Ford has been plagued with recalls and warranty expenses that have weighed heavily on the automaker’s earnings and overall business operations.

• As of December 18, Ford had 62 recalls in 2024. Stellantis is the only automaker with more recalls, at 67.

• Earlier this year, Ford agreed to pay a civil penalty of up to $165 million after a government investigation found that the automaker failed to recall vehicles with defective rearview cameras.

• According to Ford executives, the company’s warranty expenses went up by $800 million in the second quarter compared to the same period a year ago.\

Deepening its quality problems, Ford is also under a consent order with the National Highway Traffic Safety Administration (NHTSA) for a period of three years, which requires the company to do a more thorough assessment of all recalls made in the last three years.

Weighing it all: Since taking over as CEO of Ford, Jim Farley has worked to address the automaker’s quality issues, implementing measures aimed at minimizing errors during production, like completely resetting the “performance reward system” for supervisors. According to Farley, 2023 marked the first time Ford achieved a 10% improvement in initial quality, measured during the first 90 days of ownership.

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