Ford Explorer Problems Puts Massive Pressure On Ford CEO


This is not a good sign for Ford.

The next-generation Ford Explorer has been plagued with issues. Last month, dealers had to "pacify" customers waiting for their cars to arrive due to a "manufacturing problem." The problem has been traced to Ford's recently 95-year-old assembly plant that the automaker recently spent $1 billion on to upgrade. According to a report from Bloomberg, sources say the plant "is riven with dissension that's hampering productivity and quality."

Indeed, it's also reported that a batch of about 2,500 Explorers has been shipped 260-miles across to Ford's Little Rock plant to be fixed. According to sources, Little Rock has been repairing and finishing vehicles from the Chicago factory for weeks.

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The overarching problem for Ford is that the company has been underperforming and the Ford Explorer's sales have plummeted as a result of all the production problems and delays. It also puts huge pressure on Ford Motor Company's CEO, Jim Hackett, who assured Wall Street analysts at the beginning of the year he was fixing things, and that the redesigned Explorer SUV being rolled out would demonstrate things are improving.

It's clearly not, though, and Hackett has shackled himself and his reputation to the new Explorer. It could turn out to be a costly error, as it could take years to iron out the issues.

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"From a design, styling and content standpoint, it hit the marks," Jeff Schuster, a forecasting analyst for LMC Automotive, told Bloomberg. "But if you can't get out of the gate, that certainly is going to put some question marks not only on his credibility, but from a consumer standpoint, on the vehicle itself."

Bloomberg also estimates that Ford will report this week that its third-quarter profit has slipped to 26 cents a share, down from 29 cents a year ago. On top of that, Ford shares have fallen 15% since Hackett took over from Mark Fields in May 2017.

According to Ford's US sales chief, dealers now have adequate inventory of the Explorer and says that "We'll be able to hit our stride with Explorer starting now." It could be far too late for Hackett, though.

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