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Ford is on top now, but the history of Ford Motor Company is that it reverts back to self destructive behavior when sales are good and demand is high. Lets take a look at the past two cycles (I call them “good quality-bad quality” cycles) that nearly put the company into the ash bin of industrial history. First lets go back to the early 70s, when the bad quality cycle was in control. Ford was like an alcoholic that, after a binge that almost destroyed it, it went on the wagon, only to fall off the wagon when things got good again.
During the 60s Ford had tremendous sales growth. In order to meet demand they cut corners on quality. Remember the Pinto? Yeh, it was bad design. But it was also how the Pintos were built in the factories. There was no excuse for not “making the numbers” in the auto plants. If it looked like a car it was “good enough” to sell. If it lasted through the 12 month warranty period before it broke down, it met all of Ford’s quality standards. But the good times came to a screeching halt when the Arabs cut off our oil in 1973. Car sales dropped through the floor, and the bad quality Ford tried to shove down customer’s throats for eight or ten years came home to roost.
Quality standards were tightened during the 74-75 recession, and Ford built some very good cars. Quality control inspectors which had previously been ignored, because whatever was produced was “good enough” when sales were booming, got some respect. When they rejected parts, they stayed rejected. Machines were repaired. Components were scrupulously inspected. Ford made cars during the recession like they SHOULD have been making cars all along. But then something strange happened.
The oil embargo ended, and the good times were back. Car sales went through the roof. Assembly plants could not keep up with demand. It was time for Ford to fall off the wagon and return to the bad quality cycle. In the bad quality cycle the only standard was “are we going to make our numbers?” Components were “good enough” if they met production quota. Machines were patched up until what they ran looked approximately like a car part. The greatest sin was to shut a machine down until it was properly repaired. During the bad quality cycle at the Sharonville Transmission Plant we ran impellor housings that, if you dropped one on the floor the blades would fall out. We assembled torque converters using cheap plastic stators that were cracked, chipped, and you sometimes had to hold it on the bottom or the bearings would drop out. We ran oil pans that had metal thinout so bad that, if you held it up to a strong light, you could see shadows through the oil pan. We ran torque converters that would not rotate internally, so we pumped the sides out on an “expanding machine” that forced hydraulic pressure into the converter until the sides pushed out enough for it to rotate. By 1978 Ford began to pay the price for the bad quality cycle.
Rating agencys consistently rated Ford as one of the lowest quality cars produced in America. People were lining up to sue Ford over the junk they were selling. The suits from Dearborn decided that the answer was to come up with advertising slogans that would convince people that Ford made good quality. Remember “At Ford Quality Is Job One”? How about “Nobody sweats the details like Ford”? It did not help. Ford sales all but collapsed. There are three car dealers on one of the busiest streets in Cincinnati. A Ford dealer, a VW dealer, and a Toyota dealer. The Ford lot was jammed full of cars that would not sell. Salesmen stood in a cluster, watching people drive into the VW and Toyota dealers. Both lots were nearly empy. At the VW dealer the salesman would not even come out from behind his desk. If you wanted to order a VW he would put your name on the waiting list. His best guess was a two month wait. At least the Toyota salesmen would come out to the lot. Then he would take you back to his desk and put your name on his waiting list.
Not to pick on Ford alone, of course. Chrysler quality was even worse, and they would pay you $50 simply for test driving a Chrysler. But Ford quality made the headlines because of transmissions that were jumping out of park and into reverse and running over people. More than 200 were killed and 1400 injured, and Ford Motor Company became the only corporation in American History to be charged with reckless homicide for building defective transmissions. Then Ford received the largest recall in automotive history when 23,000,000 Fords were recalled for bad transmissions. Ford would have gone bankrupt if they were forced to fix 23,000,000 cars. So President Reagan let them off the hook by allowing them to send out stickers to 23,000,000 Ford owners advising them that the transmission in their cars “could cause injury or death.”
Bad quality nearly killed Ford Motor Company, nearly killed GM, and probably will still kill Chrysler. Ford has made tremendous improvements in the quality of their products, and, because of that, and the fact that they did not take any government money, they are on top of the heap. But those who fail to understand the past are condemned to repeat it. If Ford reverts back to its bad quality cycle the American people are not likely to be forgiving, and it will topple Ford from its place at the head of the line. Let us hope that Ford has learned from its past mistakes and continues to produce top quality vehicles.