DETROIT, Oct. 23 (UPI) -- Ford Motor Co. says its quality-related costs have increased by $500 million this year over the first nine months of 2004.
The rising quality costs stem largely from increased warranty expenses for 2004 models, including a trouble-plagued diesel engine for heavy-duty trucks, the Detroit News reported.
Ford Chief Financial Officer Don Leclair said it is difficult to compare 2004 and 2005 because Ford set aside too much money to cover warranty costs last year and added some of those funds back to its balance sheet in 2004.
Ronald Tadross, auto analyst for Banc of America Securities, said he suspects poor supplier relations are to blame for many of Ford's problems, the newspaper reported. He said Ford has outsourced too many of its parts, giving the automaker less control over quality.
Last month, Ford announced a major restructuring of its supply base aimed at dramatically reducing the number of suppliers that support its products.
