Ford achieves a milestone in quality, and aims to launch new cars free of defects

DETROIT — ford motor It regularly promotes itself as a cornerstone of American truck manufacturing, business, and driving with its best-selling F-Series pickup trucks, but it also led the U.S. in one area it’s not proud of: vehicle recalls and quality issues.

It has plagued the Detroit automaker’s profits, eroded customer confidence and tarnished Ford’s reputation for much of the past decade. The automaker has issued 53 recalls on more than 12 million vehicles so far this year, following an industry record of 153 recalls covering 13 million cars and trucks in 2025.

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

“Our best days are ahead of us as we continue to implement this paradigm shift for our investors, employees and customers,” Farley said during a phone interview. “We will have all new vehicles across our entire North American portfolio within two years, so ideally we should launch all of this completely new portfolio.”

Doing so will be a difficult task. Launching new vehicles, especially those with emerging technologies like software-defined systems and electric motor drives, is complex, and a single issue can have a ripple effect on the entire production line.

It’s something Farley knows well. Such problems cost Ford billions of dollars in losses during his nearly six-year tenure at the helm of the company.

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

Investors have been watching these issues closely, saying unnecessary warranty costs pose a risk to the company’s guidance and future business plans. Warranty costs are expenses incurred by an automaker to cover repairs, replacements, and other costs for defective parts or workmanship during a certain period of time or mileage 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 additional warranty and materials cost reductions in 2026. This comes after the company’s warranty costs reached a high of $4.8 billion in 2023.

“While warranty costs have been a clear drag on earnings over the past several years, Ford appears to have turned a corner,” Barclays analyst Dan Levy said in a May 15 note to investors, citing four consecutive quarters of year-over-year warranty benefits. “We believe the warranty improvement in the first quarter is encouraging, but we believe further improvement is still needed.”

Last week, the company received external validation for its years-long efforts to turn around its product issues as the Ford brand was named the best mass-market brand in the U.S. in J.D. Power’s initial quality ranking.

After the news broke 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 major brands in the influential study, which rates expected new vehicle quality based on owner-reported problems during the first 90 days of ownership. Ford, which ranked No. 23 in 2023, ranked third among all brands, behind luxury automakers Porsche and Hyundai’s Genesis. It came ahead of the Toyota Lexus brand in fourth place.

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

This acknowledgment comes as Farley redoubles his efforts to restructure Ford’s leadership, including bonuses and incentives; Focus on quality; and revamp its operations 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 terms of raw quality, but clearly none of us are satisfied,” said Farley, who worked at Toyota for nearly 19 years before Ford. “We still have a lot to do to be the number one quality brand in all attributes.”

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

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

Farley declined to predict when Ford, which has led the U.S. recalls since 2024, would no longer hold that position, saying he can’t control what happens with older vehicles as well as competitors’ quality efforts. But he said that everything the company does “will certainly lead to a significant reduction” in future recalls of current and future products.

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

Recalls are companies that correct errors that were not discovered or known during the development or production of the vehicle. These problems can range from mundane issues like mask stickers or software updates to serious issues that could be fatal for consumers.

Ford’s latest quality effort has focused on finding any issues as quickly as possible in vehicle development, which Farley said has meant structurally rearranging the company’s operations.

It has implemented a new organizational structure and recruited 350 technical specialists since 2023, held more routine meetings, encouraged close cooperation with suppliers and carried out more rigorous testing during the entire vehicle development process.

Ford also changed its compensation structure, tying executive compensation more closely to quality metrics, including those for new executives. whirlpool and Johnson Controls Who bring additional experience in quality.

Ford still has to deal with problems along the way. After rolling out new AI tools to detect problems, the company eventually had to bring back what it calls veteran “graybeard” engineers to help mentor younger employees and better train its AI models.

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

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

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

“I know after 40 years how important quality and durability are, and how difficult it is to be the best, which is where we are at the beginning,” Farley said. “We can’t lose this momentum, it has to be a culture.”