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

Images

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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers