Putting Teeth in Ford's Quality

Jacques Nasser was a stickler for detail. Yet during his nearly three years as president and CEO of the Ford Motor Co., Ford faced one disaster after another, with a ruinous impact on its image: Glitch-filled new-vehicle launches, a galaxy of recalls, the infamous Firestone/Explorer tire debacle, and poor results in customer initial quality surveys.

To paraphrase a Ford advertising boast, “Quality is Job 1” has become “Quality, What's That?”

Mr. Nasser is now gone, forced out in a late-October top management shakeup. Chairman William Clay Ford Jr. takes over as CEO, putting a Ford at the top for the first time since 1979. Nick Scheele, a 35-year Ford veteran, becomes president and chief operating officer (see story, p.30).

In a series of executive changes, native Detroiter James J. Padilla, 55, moves up to group vice president-North America manufacturing, product development, marketing and sales. He has the task of solving Ford's quality woes and returning it to respectability falls directly on Mr. Padilla, who joined Ford in 1966 as a quality control engineer and since has had increasingly important manufacturing jobs.

A personable, sandy-haired executive who grew a mustache 32 years ago and has never shaved it off, Mr. Padilla served as group vice president for global manufacturing and quality for 21/2 years before moving up to his new post. In his prior post he initiated changes to improve Ford's quality that, he maintains, already are beginning to pay off.

On a scale of 1-10, he reckons Ford's North American plants currently fall in the 7 to 8 range. The Ford Production System (FPS), patterned after Toyota Motor Corp.'s world-class scheme, has been installed in 65 Ford North American plants. “We're moving along,” he says in a widely ranging WAW interview, “but we still have more work to do with the supplier base and design aspects. We're going to be much stronger in our core engineering,” which he sees as a major key to boosting quality.

Ford's suppliers, guilty parties in many Ford recalls, will be tested by a new quality initiative revealed in October called “Q1 2002.” Mr. Padilla calls it Q1 “with teeth.”

Ford's longstanding Q1 supplier quality program “lost some of the human touch that made it a benchmark,” says Dave Velliky, purchasing director-Global Supplier Technical Assistance. After suppliers achieved Q1 status, there was little further follow-up with Ford “because it was a one-time event and didn't have to be renewed,” he says.

As a prelude to Q1 2002, says Mr. Padilla, Ford already has begun working closely with Tier 1 suppliers to check on quality operating procedures on the shop floor. After it's launched, each Tier 1 site will be re-evaluated twice a year to assure that it's performing up to Ford's expectations.

That doesn't mean suppliers will be under more cost pressures, and perhaps “less,” he says. Under Q1, suppliers needed only to self-certify, he adds, but “that hasn't worked.” Under Q1 2002 suppliers will be held more directly responsible for component defects that cause plant stoppages or recalls. They'll also be responsible for snafus created by their suppliers.

While Ford calls Q1 2001 a collaborative effort, the company clearly is moving to take quality issues into its own hands while providing more technical assistance to suppliers. “Our engineers have to ‘own’ the supplier base,” he says, describing the “full service supplier” concept “as a bit naïve.” In short, Ford intends to keep firm control over the processes that ultimately coalesce to build cars and trucks.

Messrs. Scheele and Padilla make a good team. Mr. Scheele was chairman of Jaguar Cars Ltd., which Ford acquired in 1989, during the 1990s when the British automaker engineered a quality metamorphosis from the depths of the charts to world-class levels.

His man on the floor getting it done, installing FPS in Jaguar's ancient plants, was Jim Padilla as Jag's director of manufacturing and engineering during the 1992-'94 turnaround.

Next, as director of Ford's performance luxury vehicle line from 1994-'96, Mr. Padilla presided over the successful launch of the revamped Jaguar XJ, XK-8 sports car and its new lightweight AJ26 V-8 engine. He then oversaw the launch of the Aston-Martin DB-7 and U.S.-built Lincoln LS. Next up: President of Ford South American Operations from 1996-'98, where he led a restructuring following the breakup of Autolatina, a joint Ford-Volkswagen AG venture in Brazil.

Can he repeat the success enjoyed at Jaguar in Ford's gargantuan operations in the U.S., Canada and Mexico?

“Without a doubt,” he replies. “We've already standardized (quality manufacturing) procedures at 65 plants. We're getting feedback and holding line managers accountable. We're doing more checking, just like a customer does. If a customer can see (glitches), why can't we?”

To take the message to the troops, Mr. Padilla is holding a series of “town halls.” He recently held 11 such meetings in 11 days. Another dozen are scheduled.

In mapping his attack, Mr. Padilla is zeroing in on all of Ford's constituencies: its employees, suppliers, dealers and the United Auto Workers union. Dealers had no love for Mr. Nasser and his policies affecting their businesses. Mr. Padilla is moving to mend those fences. He recently invited the Ford Dealer Council to the Wayne (MI) assembly plant, for example, to show them first-hand what Ford is doing to improve quality.

Ford has had an good relationship with the UAW for 20 years, and Mr. Padilla sees that continuing under Ron Gettlefinger, the UAW Ford Dept. vice president who was selected to succeed President Stephen P. Yokich next summer. “Ron is an honest, straight guy with good work habits,” says Mr. Padilla. “We're encouraged; it's a good move.”

In his “back-to-the-basics” strategy, Mr. Padilla is tightening the grip on Ford's testing and validation processes to eliminate defects before high-volume production starts. “It's not rocket science; it takes discipline, standardization and cadence,” he says.

Asked if flaws have surfaced because Ford has rushed too many new products into production, he concedes that this strategy has “seriously challenged our ability to digest (the programs).” He says he'll have “no qualms” about delaying new-vehicle launches until “we get the product right.”