Recalls on Vehicles at Ford Motor Company - Case Study Example

FORD RECALLS d FORD RECALLS INTRODUCTION Leading companies of today emphasize on the minutest aspect of their value chain functions in order to maintain a certain level of product quality level. Uniformity in quality gives the customers the same expected level of satisfaction generating loyalty and strengthening the brand name and value. Mishaps in one of the many processes of product formulation can alter the end product greatly, leading to dissatisfaction and marring the brand image. Even leading companies of the world are faced with several instances where they had had to recall their products to rectify product hazards or malfunctions that resulted due to assembly problems and lack of research and testing. Ford is one such automobile company, whose name has been associated with a significant number of recalls in the recent times. The aim of this paper is to make use of online available data to shed light on the number of recalls, reasons associated with them, steps taken by the company to rectify the mistakes and results that these measures have yielded so far. PURPOSE OF STUDY This study will help analyze the causes for mishaps that occur in the automobile manufacturing process at ford. The analysis of the various recalls and reasons for each will highlight aspects that need to be focused upon while processing a product. The analysis will yield a general consensus area that ford, as a company, lacks in and how the company’s strategic decision making should be focused upon strengthening their weak links. The central problem of this paper is related to the significant amount of automobile recalls by the Ford Company in the recent years which hints at its weakness in certain areas of production. SIGNIFICANCE OF STUDY The study is important due to its implications in the company, customers and stakeholders equally. By studying the reasons for product recalls, the company’s weak points can be analyzed, helping the company focus on areas that need to be strengthened to curtail further recall incidents. As customers, an insight regarding the problems that ford automobiles can be accompanied with gives them a heads-up regarding what to expect. The company’s dedication towards rectifying their vehicle mishaps through recalls also reflects its intention to provide the best and protect its customers from possible hazards. As stakeholders of the company, the growing number of recalls is a warning sign that reflects the company’s lack of strategic focus upon offering up-to-mark vehicles to the customers. Increasing recalls also calls for resource allocation that would otherwise be utilized for new product development or launch, which is significantly less for the Ford Company. All in all, the study is important to give a clear insight regarding the management issues and concerns that have resulted in the product recalls, offering an effective case study for other market players to learn from. ORGANIZATIONAL OVERVIEW Ford, the second largest automobile manufacturer in the United States is no new name in the world of automobiles. Known for its innovative designs and technology, the worth associated with the brand name itself has only strengthened over the years. Headquartered in Michigan, the company was founded by the Henry Ford in 1903 (Money.cnn.com, 2014). With automobile manufacturing and distribution spanning across all the six continents, the company employs more than a 170,000 employees in its more than 65 plants worldwide. It two leading brands are Ford and Lincoln. The company is engaged in two business segments, automobiles and financial services through its vehicle financing, insurance and leasing function. The company’s history has been greatly dented by the number of vehicle recalls for various reasons. Change in management, lack of focus and regulation on the subsidiary bodies of the company and most importantly, hampered launches have marred the success the company is known to have achieved so far. The various recalls are discussed in the section below along with their reasons. This will help us reach a consensus regarding the weak aspects of the company that need enhancement and strengthening to hamper chances of future recalls. IDENTIFICATION AND DISCUSSION OF ISSUES It is impossible to highlight all the ford recalls over the years. Some major ones are discussed below along with the model specification, number of vehicles recalled and the reasons cited for the recalls. This will be followed by a discussion regarding what could have led to the product defects and hazards and what measures could have saved the company from these recalls. Ford C-max energi-the company recalled 594,785 ford escape and C-Max vehicles of 2013-14 make due to issues in the car softwares that could delay the deployment of an airbag in the wake of accidents. This has several implications on the basic safety element of a vehicle. 7,150 Ford C-max energy vehicles of 2013 make were recalled to rectify a defect in the child lock in one of the rear doors. 23,831 Ford focus Electric and Ford C-max energi of 2013 make were recalled because of software malfunction that hampered the door chime when the driver’s door was open, making it a driving hazard (Edmunds.com, 2014). About 33,021 Ford c-max hybrid cars of 2013 make were recalled because the roof component was said to not meet the federal government’s approved panoramic roofs that offered protection against potential head injuries and accidents. Ford edge was recalled for two different reasons. Some 92,022 vehicles were recalled from North America because the distributed vehicles in the area had been identified to pose problems with the right hand shaft, which could unexpectedly hamper the driving ability. On the other hand, 27,933 ford edge vehicles of 2012-13 make were recalled because of potential fuel tanks defects that could lead to fuel leakage and fire threats. Ford escape, a vehicle that is known for its various recalls due to a number of reasons has greatly cost the ford company. The 2014 Ford escape was recalled for its panoramic glass roof defects. 1.1 million Vehicles were recalled from North America due to steering problems in these vehicles. These recalls also included 2008-2011 make of ford escape and mercury mariner along with 2011-2013 make of ford explorer. 692,744 2013-2014 make of ford escape SUVs were recalled due to a malfunction that hampered the function of the rear door handles while the car was being driven. Ford E-series Van amounting to 4,532 vehicles of 2011 make were recalled because of texture of the windshield could abruptly hamper the driver’s vision. The list of recalls and their reasons are endless. Leaky fuel tanks, defective child locks, electric cars system defects, faulty side market lamps, non-compliant seat frames, steering gear problems etc. are just some of the many reasons for ford vehicle recalls. That being said, the popularity of its cars world-wide cannot be denied worldwide. The brand has a strong green image and its ford fiesta has been named the bestselling car of all times in UK (Corporate.ford.com, 2014). Thus, it is imperative that the company protects itself from the possible tarnishing of its image due to consistence vehicle recalls. A survey regarding vehicle reliability ranked ford cars below average which is a warning sign for the top management (Bachman, 2013). The reasons cited for the various recalls suggest that there are problems with compliance and assembly. Myford system, the car system Ford developed in collaboration with Microsoft has also hampered the efficiency of the cars greatly, making it a serious concern as far as safety and efficiency is concerned. Thus, the focus of the management should be to firstly, focus upon enhancing the quality and compliance levels at each of its subsidiaries and plants. The assemble line should be carefully monitored through manual and technological means to ensure that possible glitches in the vehicle’s functionality can be detected at an earlier stage, reducing the chances of recalls later. Strict adherence to a uniform structural make should be communicated and applied by each assembler so that the vehicles are equal all over the world, standardization reducing chances of disparity and defects. A number of solutions have been implemented as a result of its two fold strategy to control recalls. For large recalls, the company plans to improve the engine cooling system and safety features of the cars. For small recalls, they plan to empower dealers to replace fuel line compartments which are the basic reason for the fuel leakage issues (Reuters, 2013). In this way, to reduce the impact of the recalls, two fold strategies are employed so that the process can be swift and timely. CONCLUSION By getting the assembly line and compliance in accordance with the quality standard and law, the ford company is likely to enhance the reliability aspect of its vehicles which is currently very weak. Apart from that they can also focus upon launching new vehicles to stay on the top of the market. Previously recalls have led to great losses and inefficiency for example this year the company invested heavily in promoting its new Lincoln MKZ sedan. Recalls in the recent periods compromised on the space availability for the dealers leading of lack of availability of the new car even if there was a demand for them. Stakeholder concerns regarding the consistent recalls can also be tamed by the fulfillment of the new chairperson, Mark Fields’ promise to ensure that the recall issue is dealt with at all levels in the shortest span to time, enabling the company to gain foothold in the industry with enhancement of the luxury line of cars. REFERENCES: Money.cnn.com,. (2014). F - Ford Motor Co Company Profile - CNNMoney.com. Retrieved 9 August 2014, from http://money.cnn.com/quote/profile/profile.html?symb=F Edmunds.com,. (2014). Ford Recalls - Ford Safety & Defect Recall News. Retrieved 9 August 2014, from http://www.edmunds.com/recalls/ford.html Corporate.ford.com,. (2014). Ford Motor Company Operations Worldwide. Retrieved 9 August 2014, from http://corporate.ford.com/our-company/operations-worldwide Bachman, J. (2013). Ford Really Wants to Escape Its Recall Woes. Businessweek.com. Retrieved 9 August 2014, from http://www.businessweek.com/articles/2013-11-27/ford-really-wants-to-escape-its-recall-woes Reuters, (2013). Ford recalls 2013 Escape SUVs for seventh time. [online] Yahoo News. Available at: http://news.yahoo.com/ford-recalls-2013-escape-suvs-seventh-time-155441353--finance.html [Accessed 24 Jul. 2014]. Read More