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Ford to appoint new head of quality as Jim Baumbick takes

on EV

programs role

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Ford faces $165 million penalty for recall delays

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Ford's shares down 17% this year amid quality challenges

By Nora Eckert

DETROIT, Dec 18 (Reuters) - Ford Motor ( F ) 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 vehicle programs team - which focuses on keeping the costs

and timing of vehicles on track - in addition to his existing

responsibilities, which include product development operations.

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' ( STLA ) stock is down 40% and General Motors ( 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' ( STLA ) 67. GM had 33 recalls.