Ford Motor Co. (NYSE: F | F Price Prediction) CEO Jim Farley said plans to build a new manufacturing system to produce its next-generation electric vehicle (EV) present a risk. “There are no guarantees,” he added. The primary risk, though unstated, is the company’s remarkably poor record as a car manufacturer. That overshadows the fact that its new car-building system has never been tried before.
Ford says its new “Universal EV Platform” is 40% faster than its current system. Speed is not the only benefit. The fact is that the plan saves money. And, Farley says, it will improve reliability.
“We transformed the traditional assembly line into a tree with three main branches,” Ford said. One will make the front of the car. The second one will make the back. The third branch is the “structural battery,” which will include seats, consoles, and carpeting.
Running a new system requires precision. Running a totally new one takes even more. Ford cannot look at a similar system at another company for benchmarking. That makes the task even more difficult.
Ford has had 94 recalls this year (by one count). The total number of vehicles recalled stretches well into the millions. This has happened despite regular comments that Ford can create better quality programs to ensure fewer mistakes.
The recalls have beaten down investors as well. And warranty costs hit Ford’s financials by $6 billion last year. The figure could be nearly as much this year, based on the company’s financial reports so far.
Ford’s significant risk for its new manufacturing system is not that it is new. The risk is that its manufacturing operations are so awful.
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