Ford Achieves Quality Milestone, Aims for Flawless New Vehicle Launches

DETROIT— Ford engine regularly touts itself as a cornerstone of America's trucking, business and manufacturing leadership with its best-selling F-Series pickup trucks, but it has also led the U.S. in an area it's not so proud of: vehicle recalls and quality issues.

They have hurt the Detroit automaker's profits, degraded customer trust and tarnished Ford's reputation for much of the last 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 reached a key quality milestone. He said Ford has learned from its past mistakes and will use that knowledge to try to smoothly launch a litany of new products in the coming years.

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

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

It's something Farley knows very well. These problems have cost Ford billions of dollars in losses during his nearly six years at the helm of the company.

This week, the automaker increased its 2026 recall total by recalling 741,195 F-150 SUVs and trucks ranging in age from the 2018 to 2021 model years.

Investors have been watching the issues closely, saying unnecessary warranty costs are a risk to the company's future direction and business plans. Warranty costs are expenses an automaker incurs to cover repairs, replacements, and other costs for defective parts or labor for 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 a further reduction in warranty and materials costs in 2026. This follows the company's warranty costs peaking at $4.8 billion in 2023.

“While warranty costs had been a clear drag on earnings in recent 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 profits. “We believe the first quarter warranty improvement is encouraging, but believe further improvements will still be necessary.”

Last week, the company received external validation of its years-long efforts to fix its product problems, as the Ford brand was named the top mass-market brand in the U.S. in JD Power's Initial Quality Rankings.

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

It's the first time since 2010 that Ford leads major brands in the influential study, which evaluates the expected quality of new vehicles based on problems reported by owners within the first 90 days of ownership. Ford, which ranked 23rd in 2023, ranked third among all brands, behind luxury makers Porsche and Hyundai's Genesis. It came in ahead of Toyota's Lexus brand in the No. 4 spot.

Ford improved in nearly every vehicle category measured by JD Power in starting quality, including software, infotainment and powertrains.

The recognition comes as Farley has redoubled his efforts to restructure Ford's leadership, including its bonuses and incentives; focus on quality; and revamp your 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 outperform the world in starting quality, but obviously 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 reputation for overall quality, including long-term durability.

Ford and its Lincoln luxury brand ranked 18th and 19th, respectively, in the JD Power U.S. Vehicle Reliability 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 U.S. recalls since 2024, will leave that position, saying it can't control what happens in older-model vehicles or competitors' quality efforts. But he did say that everything the company is doing will “absolutely lead to a massive reduction” in future recalls of current and future products.

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

Recalls are companies that rectify errors that were not detected or known during the development or production of a vehicle. They can range from mundane issues, such as visor labels or software updates, to serious and life-threatening problems for consumers.

Ford's most recent quality efforts have focused on finding any problems as early as possible in a vehicle's development, which Farley said meant structurally reorganizing the company's processes.

It implemented a new organizational structure and hired 350 technical specialists from 2023, held more routine meetings, fostered closer collaboration with suppliers and conducted more rigorous testing throughout the vehicle development process.

Ford also changed its bonus structure, tying executive pay more closely to quality metrics, including those for new executives at Whirlwind and Johnson Controls who provided additional experience in quality.

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

“In the past we discovered that Ford restructured the company to save money, only to discover that we had laid off people with experience in supply chain, manufacturing and engineering,” he said. “Bringing those people back complements all this AI technology.”

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

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 its Ford+ business plan, which is just beginning to show Ford's positive future.

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