Ford Ships Made-in-Mexico Cars to Michigan for Inspection

Ford Motor Co. (F), citing shortages of its new Lincoln MKZ for the luxury brand’s worst sales month in 32 years, is funneling some of the sedans produced in Mexico through a Michigan plant for inspection to ensure quality.

Ford’s factory in Hermosillo, Mexico, which builds the MKZ as well as the Ford Fusion sedan, has fallen behind with validation processes during the ramp up of production, Tom Kowaleski, a spokesman, said yesterday in a telephone interview. The automaker is sending some new Lincolns to a factory in Flat Rock, Michigan, before they are shipped to dealers, he said.

“We have instituted a second location for the same luxury- validation process,” Kowaleski said. He declined to say how much of MKZ production is being examined at Flat Rock or how long the arrangement may last. “We intend to ship cars that reach a higher level of quality, the highest level of quality.”

The restyled MKZ, with a chrome grille inspired by an eagle’s wings, is the first of four new models Lincoln has coming in the next four years as Ford spends $1 billion to turn the brand around. Lincoln sales fell to a 32-year low in the U.S. last month: 4,191 cars and sport-utility vehicles.

January deliveries for Lincoln, which will air its first Super Bowl ads tomorrow, dropped 18 percent from a year earlier. The month’s sales total was the worst for Lincoln since the brand delivered 3,506 vehicles in July 1981, according to Southfield, Michigan-based researcher Ward’s Auto.

Ken Czubay, Dearborn, Michigan-based Ford’s U.S. sales chief, alluded to rigorous quality inspection that was slowing Lincoln shipments to dealers during a conference call yesterday. He didn’t discuss the arrangement in Flat Rock.

‘Unorthodox’ Move

Ford is emphasizing quality after the restyled 2013 Escape, Ford’s top-selling SUV, was recalled four times since it was introduced in May. The revamped Fusion has had two recalls since its October debut.

“After difficult launches with the Escape and Fusion, Lincoln is taking it slow and trying to do things right the first time,” Dave Sullivan, an analyst at AutoPacific Inc., said yesterday in a telephone interview. “It’s an unorthodox thing for them to do.”

Ford’s Flat Rock plant is adding a second shift and 1,200 workers to build the new Fusion sedan beginning this year. The factory also builds the Mustang sports car. Since 1992, the factory had been known as Auto Alliance International to reflect the joint production of models for Ford and Mazda Motor Corp., which ended last year.

MKZ Orders

The MKZ has the largest number of “pre-orders” in the brand’s history, Czubay told analysts and reporters on yesterday’s conference call. Dealers haven’t been able to fulfill those requests because of the deliberate quality checks Ford is making to the new model, he said.

“We recognize that this is slowing our shipment of MKZs to our dealers and customers, but this is the right action to take for our reinvented Lincoln brand,” Czubay said.

Chief Executive Officer Alan Mulally made quality a cornerstone of his turnaround plan for Ford. The company has stumbled as the automaker plunged in quality rankings from researcher J.D. Power & Associates and Consumer Reports magazine.

Lincoln ranked 19th in Consumer Reports’ 2013 auto-brand perception survey, released this week, behind Daimler AG (DAI)’s Mercedes-Benz, General Motors Co. (GM)’s Cadillac, Bayerische Motoren Werke AG (BMW)’s BMW, Toyota Motor Corp. (7203)’s Lexus, Volkswagen AG (VOW)’s Audi and GM’s Buick.

Mulally is trying to revive Lincoln to get a larger slice of the market for luxury vehicles, which produce higher profits than lower-priced cars. Lincoln’s U.S. sales have fallen 65 percent through last year since peaking in 1990 at 231,660.

Last year, Lincoln sold 82,150 vehicles. BMW was the top- selling luxury-auto brand in the U.S. in 2012, at 281,460.

To contact the reporter on this story: Craig Trudell in Southfield, Michigan, at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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