DEARBORN - J.D. Power & Associates today released its annual Initial Quality Study.  Industry issues around new vehicle launches, connectivity technologies and powertrains drove our scores lower, as we’ve been indicating to our key stakeholders since April. Ford saw the biggest year-over-year drop, falling to 23rd of 28.  Lincoln moved from 8th to 17th as the MKX mix heavily influenced the brand’s overall score.  On the plus side, F-150 and Taurus are award winners. Bennie Fowler puts the results in perspective.  Please also watch a discussion with Bennie and Mark Fields on The America’s webcast (note:the webcast is available internally only) and see below some highlighted messages.

If you are asked about our quality…
• We listen closely to customer feedback such as today’s J.D. Power report, and we use it to make continuous improvements to ensure we provide customers the highest-quality vehicles.
• We announced in April, during our first-quarter financial report, that we expected mixed quality results in North America this year after closely listening to feedback from our customers.
• This same feedback now shows that we largely are back on track after we addressed near-term quality issues with MyFord Touch and a few of our powertrains.
• This feedback also shows we have leading customer satisfaction, even as we quickly address near-term issues.  More than 50 percent of customers are telling us that SYNC has been a key factor in their purchase decision, and customer satisfaction with MyFord Touch is even higher than our first-generation SYNC system – at 73 percent.
• We remain absolutely committed to serving our customers with vehicles that have the highest quality, fuel efficiency, safety, smart design and value.

Q. Why such a big drop in the J.D. Power results?  What went wrong this year at Ford? 
A. The J.D. Power study says that many automakers, including Ford, experienced issues with newly launched vehicles, new connectivity technology such as our SYNC and MyFord Touch innovations, and new powertrain technologies such as our fuel-saving transmissions.  These issues drove lower ratings for our brands and some of our key vehicles.

Q. Is this news a surprise? 
A. We always listen to our customers as part of our continuous improvement effort, and customers identified these issues this spring.  You might remember that we announced in April, during our first-quarter financial report, that we expected mixed quality results in North America this year. This same feedback now shows that we largely are back on track after addressing the near-term issues.

Also on the positive side, we were pleased to learn that two of our flagship vehicles – F-150 and Taurus – won awards from J.D. Power in this study for having the best initial quality of any vehicle in their segments.  This is a real accomplishment for the team, especially considering we launched four new powertrains on the F-150 in recent months.

Q. How are we addressing the MyFord Touch issues? 
A. We identified early on that the issue is two-fold: education and functionality.  First, we are improving our instructional and “how-to” materials so customers are able to more easily understand and ask questions about how to use the system. Second, we are updating the system software to enhance functionality – much like software updates for home computers, smartphones and apps. 

Q. How are we addressing the powertrain issues? 
A. We identified two issues early on: education and functionality of our PowerShift transmission.
• First, we are improving customer communication regarding our new-technology PowerShift transmission so customers are familiar with the different sounds and sensations that are part of this new system. 
• Second, some issues that customers identified were software related, and we have made updates to improve the shift timing, especially on deceleration and feel.

We largely are back on track after addressing these near-term quality issues.

Q. Do we expect today’s news to affect sales or our image? 
A. We remain absolutely committed to serving our customers with vehicles that have the highest quality, fuel efficiency, safety, smart design and value. 
The same customer feedback that identified these issues early on now shows that we largely are back on track after addressing near-term quality issues with MyFord Touch and a few of our powertrains.  This feedback also shows we still have leading customer satisfaction.  More than 50 percent of customers are telling us that SYNC has been a key factor in their purchase decision, and customer satisfaction with MyFord Touch is even higher than our first-generation SYNC system – at 73 percent.

Q. What is our quality performance in other parts of the world?
A. In Asia Pacific and South America, quality has improved by more than 25 percent compared with last year.  In Europe, customer satisfaction improved 3 percentage points, and we maintained our overall quality performance.  Just last week, the Ford S-MAX earned the highest customer satisfaction marks of any MPV in J.D. Power and Associates’ 2011 Germany Vehicle Ownership Satisfaction Study.