Ford achieves quality milestone, as CEO targets flawless new vehicle launches

DETROIT — Ford Motor regularly promotes itself as a cornerstone of American manufacturing, business and truck leadership with its best-selling F-Series pickups, but it also has led the U.S. in one area that it isn’t so proud of: vehicle recalls and quality issues.

They’ve plagued the Detroit automaker’s earnings, degraded customer trust and stained Ford’s reputation for much of the past decade. The automaker has issued 53 recalls for more than 12 million vehicles so far this year after an industry record of 153 recalls covering 13 million cars and trucks in 2025.

But that period for Ford is coming to an end, CEO Jim Farley told CNBC during an exclusive interview, as the automaker notched a key quality milestone. He said Ford has learned from its past mistakes and will use that knowledge to attempt to flawlessly launch a litany of new products in the coming years.

“Our best days are in front of us as we continue to execute this quality turnaround for our investors, for employees, for our customers,” Farley said during a phone interview. “We’re going to have all new vehicles across our entire North America range in a couple of years, and so that whole new lineup, we have to launch all those perfectly.”

Doing so will be a difficult task. New vehicle launches, especially ones with emerging technologies such as software-defined systems and electrified powertrains, are complex, and one issue can have a ripple effect on an entire product line.

It’s something Farley knows all too well. Such issues have cost Ford billions of dollars in losses under his nearly six-year tenure leading the company.

The automaker this week added to its 2026 recall total by recalling 741,195 SUVs and F-150 pickup trucks that varied in age from the 2018 to 2021 model years.

Investors have been closely watching the issues, saying unneeded warranty costs are a risk to the company’s guidance and future business plans. Warranty costs are the expenses an automaker incurs to cover repairs, replacements and other costs for defective parts or workmanship under a certain period of time or miles driven after customers purchase a new vehicle.

Ford said it reduced warranty and materials costs by $1.5 billion in 2025, when adjusted for volume and mix, and is targeting an additional reduction in warranty and material costs in 2026. This follows the company’s warranty costs reaching a high of $4.8 billion in 2023.

“While warranty costs had been a clear drag to earnings over the past several years, Ford appears to have ‘turned the corner,'” Barclays analyst Dan Levy said in a May 15 investor note, citing four consecutive quarters of year-over-year warranty benefits. “We believe the 1Q warranty improvement is encouraging, yet believe further improvement will still be needed.”

The company last week received outside validation of its yearslong efforts to turn around its product issues as the Ford brand was named the top mass-market brand in the U.S. in J.D. Power’s initial quality ranking.

After the news was released on June 25, Ford stock rose 2%, making it the company’s second-best trading day of the month.

It’s the first time since 2010 that Ford has led mainstream brands in the influential study, which assesses expected new vehicle quality based on owner-reported problems within the first 90 days of ownership. Ford, which ranked No. 23 in 2023, ranked third among all brands, behind luxury makers Porsche and Hyundai’s Genesis. It came before Toyota’s Lexus brand at No. 4.

Ford improved in nearly every vehicle category measured by J.D. Power in initial quality, including software, infotainment and power trains.

The acknowledgement comes as Farley has doubled down on efforts to restructure Ford’s leadership, including its bonuses and incentives; focus on quality; and revamp its processes as well as those of suppliers and other partners to more proactively identify potential problems.

“I’m very proud that an American car company can beat the world in initial quality, but obviously none of us are satisfied,” said Farley, who worked at Toyota for nearly 19 years before Ford. “We have so much left to do to be the No. 1 quality brand in all attributes.”

Farley said Ford needs to continue trying to lower its warranty costs and future recalls as well as improve its overall quality reputation, including long-term durability.

Ford and its luxury Lincoln brand respectively ranked 18th and 19th in J.D. Power’s U.S. Vehicle Dependability Study released in February, well below the industry average. That study looks at vehicles over a longer period.

Farley declined to predict when Ford, which has led recalls in the U.S. since 2024, will not hold that position anymore, saying he can’t control what happens in older-model vehicles as well as competitors’ efforts in quality. But he did say everything the company is doing “will absolutely lead to a massive reduction” in future recalls of current and future products.

“The ultimate success metric is will we do it over the course of five or 10 years through launches, through all sorts of economic cycles,” he said. “Everyone wants the quick answer, but when it comes to quality, time is the most important measure of success.”

Recalls are companies rectifying mistakes that weren’t caught or known during a vehicle’s development or production. They can range from mundane issues such as visor labels or software updates to severe, potentially deadly issues for consumers.

Ford’s most recent quality efforts have focused on finding any issues as soon as possible in a vehicle’s development, which Farley said meant structurally rearranging the company’s processes.

He implemented a new organizational structure and has hired 350 technical specialists since 2023, held more routine meetings, encouraged closer collaboration with suppliers and rolled out more rigorous testing during the entire vehicle development process.

Ford also changed its bonus structure, tying executive compensation more closely to quality metrics, including those for new executives from Whirlpool and Johnson Controls who brought additional quality expertise.

Ford has still had to deal with issues along the way. After it rolled out new artificial intelligence tools to detect problems, the company had to ultimately bring back what it calls veteran “gray beard” engineers to help guide younger staff members and to better train its AI models.

“We found in the past that Ford restructured the company to save money, only to find that we had let go experienced people in supply chain and manufacturing and engineering,” he said. “By bringing those people back, that complements all this AI technology.”

For many companies, AI has increasingly shown it can increase productivity of many tasks but might not be as efficient if it’s not properly trained and deployed to assist the work of human employees.

Farley said that while Ford’s quality efforts are a never-ending journey, he believes the company is about halfway through its most recent turnaround efforts under his Ford+ business plan, which is just beginning to show Ford’s future upside.

“I know after 40 years how important quality is and durability is, and how difficult it is to be the best, which we now are initial,” Farley said. “We cannot lose this momentum, it has to be a culture.”