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Ford likely to show flat progress on quality

GM also expecting a minimal improvement in its rating
April 29, 2003

BY JAMIE BUTTERS
FREE PRESS BUSINESS WRITER

Ford Motor Co. will likely show little or no improvement in new-car quality when one of the industry's most closely watched surveys comes out next week, said President and Chief Operating Officer Nick Scheele.

Niggling problems with the launch of the Ford Expedition and Lincoln Navigator large sport-utility vehicles offset improvements in car models, such as the Ford Focus small car, and the Ford Taurus and Mercury Sable midsize cars, Scheele told the Free Press on Sunday.

The Dearborn automaker's score in the J.D. Power and Associates annual study of new-car quality will likely be "flat . . . maybe a little improvement," Scheele said, echoing cautious statements by rival General Motors Corp.

Ford has been looking for big gains in recent years after its reputation for quality was battered in the wake of Firestone tire failures on Explorer SUVs, multiple recalls on the Explorer and Focus, and launch delays on vehicles, such as the Thunderbird.

Making vehicles that customers can count on is fundamental to Ford's "back-to-basics" strategy as it seeks to reverse its losses of $6.4 billion over the last two years. It made almost $900 million in the first three months of this year.

After tremendous gains industrywide last year, the nation's two biggest automakers are warning that much less progress may be evident in this year's new-car study.

Executives at GM have said they expect no more than a "slight" improvement.

"We are expecting some nominal improvement, but nowhere near what we had last year," said Troy Clarke, GM's group vice president for manufacturing and labor relations.

Last year, GM improved its score by 11 percent, edging the industry's overall 10-percent improvement.

During the last five years, the industry average has improved by 24 percent.

Of interest this year will be the performance of Nissan Motor Co. Last year, it tumbled from a solid third place among the major automakers into a tie for last place with Volkswagen AG.

Executives and spokespeople at Ford and GM emphasized that J.D. Power does its own research, and they won't know the results until the Initial Quality Survey is released next Tuesday.

In February and March, J.D. Power surveyed people who bought or leased a new car or truck three months earlier, in November and December.

The annual study, which is closely watched by Wall Street analysts and consumers alike, probes the buyers for "things gone wrong," which can be anything from wind noise -- the industry's No. 1 complaint -- to a total engine failure.

The Initial Quality Survey ranks with the Harbour Report of manufacturing efficiency as the most-watched studies released each year.

That Ford expects problems from the Expedition and Navigator came as a bit of a surprise to one analyst.

"That one, overall, was a pretty decent launch," said Mike Wall, a Grand Rapids-based analyst with CSM Consulting Services. Manufacturing problems were corralled before the SUVs reached dealers and customers.

The vehicles have been free of safety recalls, but Ford's internal research -- especially from the time when J.D. Power was conducting its survey -- found complaints of the type that tend to appear on the initial quality survey, Scheele said.

The top two complaints have been wind noise and squeaks and rattles, said Louise Goeser, Ford's vice president for quality.

The Initial Quality Survey is important, she said, but it is only one of many ways to measure the company's quality. Ford also looks at warranty costs, which have improved by more than 10 percent, recalls, which are down 40 percent, and durability, among others.

"We see a lot of improvement across that overall scoreboard," Goeser said.
 
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