By Nora Eckert
DETROIT (Reuters) -Ford Motor is appointing a new head of quality, the company confirmed on Wednesday, as the automaker works to reverse its industry-topping record of recalls and reduce warranty costs.
The automaker will move control of its quality team from Jim Baumbick to a new leader who has not yet been announced, as Baumbick takes on the responsibility of EV programs.
Baumbick, who has led quality since late 2022, will oversee the entire vehicle programs team, which focuses on keeping the costs and timing of vehicles on track, now including EVs under his supervision as well as gasoline-engine vehicles.
The EV programs group previously reported through the team led by Doug Field, a former Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) executive, who still directs Ford’s advanced development of future EVs.
The move, which was announced to some Ford workers internally last week, is expected to take effect early next year.
A Ford spokesperson said the changes would allow its teams to "collaborate and work more efficiently to deliver exciting vehicles and software with the highest levels of quality for our customers."
Ford CEO Jim Farley has made fixing the automaker's quality problems a priority since he took the helm in October 2020. Since then, Ford has changed some of its production practices to better catch errors, and allocated more workers to identify safety concerns. It has topped the industry in number of recalls since 2021.
“After three years of hard work fixing all of our deficits ... we now have everything in place to really see our quality turn for our customers and for our business,” Farley told reporters at an event last week.
When asked about his concerns for next year, Farley responded: "execution."
This year has been particularly tough on the quality front for the Dearborn, Michigan automaker, which agreed to an up to $165 million civil penalty after a government investigation found it failed to recall vehicles with defective rearview cameras in a timely manner.
"It was the most significant action of the year," from the federal safety agency, said Michael Brooks, executive director of the Center for Auto Safety.
Warranty costs have also weighed on Ford's earnings this year. Reviewing second-quarter results, executives said warranty expenses went up $800 million in the period compared with the year-ago quarter, mostly because of issues with vehicles launched in 2021 or earlier.
The automaker's shares are down 17% this year, while Stellantis' stock is down 40% and General Motors (NYSE:GM) has gained 43%.
Ford is also under a consent order with the National Highway Traffic Safety Administration that will last at least three years, and must conduct a thorough review of all recalls it has filed in the last three years and if needed, file new recalls.
As of Wednesday, Ford had 62 recalls in 2024, second only to Stellantis’ 67. GM had 33 recalls.