Bill Ford, Jim Farley took random questions from shareholders during meeting

Ford CEO Jim Farley and company chair Bill Ford fielded questions from shareholders ranging from concerns about quality to stock price and future products during the virtual annual shareholders meeting Thursday.

Perhaps the question most associated with the financial bottom line: “Quality has been an issue for the past two years. What steps have been taken to address this issue?”

Product quality has been an ongoing problem at Ford since before Farley took the helm in October 2022, and it continues to plague the company with billions of dollars in recall and warranty costs. Farley has vowed to confront the issue by hiring a new quality team, implementing new protocols and stopping production when necessary. Both the Ford 150-Lightning and the Ford Mustang have had production stopped this year. Super Duty production is undergoing unprecedented review amid new processes.

Finding the root cause

This is what Farley said:

• “For our management team, quality is our No. 1 priority. And our overall quality today is improving. However, we’re still not at the world-class levels that, not only our customers expect, but, more importantly, what we expect out of ourselves.”
• “We are starting to see our initial quality improve markedly in North America. We’re taking a range of actions, as you would expect, to eliminate any defects in the first place. And we are totally focused on finding and fixing issues that do come up. The way we portray this inside the company is, we always want to put quality first because that’s the most fundamental commitment to our customers, and our customers, we want to treat like family.”
• “It requires a lot of end-to-end changes, from our supply chain, our manufacturing and engineering system, to the way we test, and also the way we find root cause and solve that across all the different disciplines in the industrial system. I want to give you maybe an example of what’s changing at Ford, what we do differently.”

What are the specific changes?

Farley pointed to the launch changes for the new Super Duty despite already being a top seller:

• “We have a 25-mile pre-delivery quality shakedown” — where employees drive the vehicle 25 miles and scrutinize its performance as a customer might — “and we drove 28,000 Super Dutys, and 100 more each day to assure quality of the product. We pre-drove every vehicle to find any kind of defect.
• “We now have added higher mileage, real-world testing during the launch. We have tripled the number of trucks in trailer towing tests, which is really critical to Super Duty. That’s nearly four times as many as we typically do in our durability testing.
• “We now have a lot more quality checks on the product line in both (factory) locations. We’ve added now AI (artificial intelligence) on the line to catch quality issues that aren’t visible to the human eye.
• “Simply put, you are not going to see us launch product until it meets or exceeds the highest quality standards that we’ve ever had. This is what we’re doing for all vehicles, like we’re going through now for (the new) Mustang and other upcoming exciting products.”

Bill Ford added, “I hope you get a sense that this is an incredibly high priority for our management team to get this right. And Jim has put in place some very strong actions to ensure this.”

Stock price, Maverick, hydrogen and even the Corvette

Bill Ford and Farley fielded questions that covered various topics, including: