How Ford Is Finally Fixing Its Biggest Quality Problem

The MyFord Touch system has clobbered Ford's quality ratings. Here's how the company will fix it once and for all.

Feb 27, 2014 at 8:07PM


Ford's touchscreen "infotainment" system, shown here in a 2015 Ford Expedition, has been very popular. But it has generated a lot of complaints, and those complaints have hurt Ford's quality rankings. Photo credit: Ford Motor Co.

Since its arrival several years ago, Ford's (NYSE:F) SYNC voice-activated "infotainment" system has mostly been hailed as a good thing. But MyFord Touch, the touchscreen system that Ford created to build on SYNC's initial success, has generated tons of complaints and clobbered Ford's quality rankings.

The irony is that MyFord Touch has been a big success for Ford in terms of sales -- Ford says that over half of its new models are sold with the MyFord Touch options package. That has given Ford's profits a nice boost. But the complaints have piled up: It's buggy, it's hard to use, and no less an authority than Consumer Reports has suggested that it could even be a safety hazard, because its flaws could distract drivers.

This has turned into a huge headache for Ford. Ford has made huge improvements to the quality of its cars and trucks over the last few years. Most experts now rate them on par with the best Japanese brands -- except for the flaws in the MyFord Touch system, which consistently costs Ford big in the quality rankings.

Ford has repeatedly tried revising and updating the MyFord Touch software, but the complaints persist. Now, as Fool contributor John Rosevear explains in this video, Ford is preparing to take more drastic action: Dumping the Microsoft (NASDAQ:MSFT) operating system that powers SYNC and MyFord Touch in favor of a proven system from, of all companies, Blackberry (NASDAQ:BBRY).

A transcript follows the video.

What you really need to know about Obamacare
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This free guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.

John Rosevear: Hey, Fools, it's John Rosevear. It looks like Ford is finally taking big steps to upgrade its SYNC and MyFord Touch systems. Bloomberg reported earlier this week that Ford was planning to dump the current operating system it uses for SYNC, which is made by Microsoft, in favor of a rival system called QNX, which is made by a company that is owned by BlackBerry, and we've since seen reports from several other outlets, including The Wall Street Journal, that seem to confirm this.

Now, this is great news for BlackBerry, which has seen huge declines in its smartphone business, and it's a blow for Microsoft, but what I really want to talk about is what it means for Ford. Over the last several years, Ford has made huge strides in upgrading the quality of its vehicles. We've gotten to the point where a Ford Fusion or Focus is fully competitive with Toyota and Honda, which is just huge, given where Ford was a decade or so ago. But this system, the MyFord Touch system, has really held Ford back in overall quality rankings, with reviewers like Consumer Reports. Ford and Lincoln ranked 26th and 27th out of 28 in Consumer Reports' most recent reliability survey, and this system had a lot to do with that.

Ford's current line of cars and trucks are very very good, but the bugs in this system drive people nuts. They say it's glitchy, it's hard to use, its poorly laid out, and Consumer Reports has even said that it's kind of a safety issues because it distracts drivers.

Now, on the one hand, Ford sells a ton of these things. SYNC is the voice-activated system, and MyFord Touch adds the touchscreen interface. A Ford spokesperson told me today that for 2014 model year vehicles sold so far, 94% had SYNC and 51% also had the MyFord Touch system. And I'll tell you that these packages are very profitable for Ford. They add a lot of profit to every sale.

So Ford has two huge incentives here: First, they want their big quality gains to be recognized. They don't want this glitchy system holding them down in those rankings, because a lot of buyers take those rankings very seriously, and it's surely costing Ford some sales. Second, they want to sell these systems on as many Fords as they can, because that means big profits. So obviously it's in their best interest for Ford buyers to really love these systems, and find them easy to use, and show them off to their friends, and so forth.

This QNX system is already used by Audi and Porsche and BMW (NASDAQOTH: BAMXF) and Acura, so Ford will be in good company here, and apparently it's a lot easier to integrate with things like Apple's (NASDAQ: AAPL) iOS and with Android. Reports say that they're planning to roll it out in 2016. One question I haven't seen answered yet is whether current Fords that have the Microsoft system will be able to upgrade, but I'll see what I can find out on that front.

Thanks for watching, and Fool on.

John Rosevear owns shares of Apple and Ford. The Motley Fool recommends Apple, BMW, and Ford and owns shares of Apple, Ford, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information