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From Thursday's Globe and Mail

July 3, 2008 at 12:00 AM EST

DEARBORN, MICH. — First, the good news about Ford: Consumer Reports magazine now recommends 64 per cent of the Ford vehicles tested, up from 54 per cent last year.

Moreover, the reliability of 93 per cent of Ford's models comes in at average or better in CR's latest survey. That's a jump from 63 per cent in 2007.

There is more, too.

In J.D. Power and Associates' 2008 Initial Quality Study, released last month, Ford is in a statistical dead heat for quality with Mercedes-Benz, Toyota, Honda, Ford's own Mercury brand (not sold in Canada), Jaguar, Audi, Cadillac and Chevrolet.

Mercedes, Jaguar, Cadillac and Audi are luxury brands and Toyota and Honda are generally acknowledged as the quality kings in the car business.

In all, six Ford, Lincoln or Mercury brand vehicles were ranked in the top three among individual category winners in the widely followed Power study. Honda had just four, though Toyota had nine.

Vans? The Ford E-Series was No. 1 in its class.

Big activity vehicles or SUVs ? The Lincoln Navigator was No. 1.

Mid-size pickups? The Ford Ranger was right there, a runner-up to the Dodge Dakota.

Compact activity vehicles or SUVs? Ford Escape, runner-up.

Mid-size cars? The often-overlooked Ford Fusion, a runner-up.

These latest quality scores are no fluke.

"They've been making incremental improvements in their reliability year after year," says David Champion, senior director of automotive testing for Consumer Reports. He adds that recently launched vehicles such as the 2007 Edge and the 2006 Fusion have shown "excellent reliability right out of the box."

This is the sort of praise that Joe Hinrichs, Ford's global manufacturing chief and a former Ford of Canada CEO, wants to hear — especially as Ford plans to launch six new or revised vehicles this year and two more critical models early in 2009. The latest launch: the 2009 Ford Flex out of Ford's Oakville, Ont., assembly plant.

The Flex is a crossover wagon with love-it-or-hate it styling and a pile of cute but not necessarily useful features, including an actual refrigerator that's optional. An even more important model launch comes at the end of the year: the new but delayed 2009 F-150, Canada's best-selling pickup for some 22 years.

No Ford model yet receives Consumer Reports' much-coveted automatic "recommended" rating for unproven new vehicles (as the Toyota Camry used to and as the Honda Accord still does).

But if Ford maintains its current track record on quality and quality new-model launches, Champion says Ford has a chance in a few years of being automatic with CR. That's something unheard of for a Detroit-based auto maker.

John Wolkonowicz, a Global Insight product analyst, says quality may soon become Ford's biggest showroom advantage. "Quality is Ford's ace in the hole right now," he recently told industry bible Automotive News.

Quality may be an ace, and it may even be one reason why billionaire investor Kirk Kerkorian has taken a large, 6.49 per cent ownership stake in Ford. Nonetheless, much of the rest of Ford's hand looks weak.

Revenue from sales of Ford's big pickups and SUVs is under siege in the United States, largely a result of a slowing economy, the credit crunch and surging pump prices. Ford of Canada is not facing a credit crunch among its buyers, as in the United States, but Ontario's manufacturing economy is clearly struggling with the high Canadian dollar, and fuel costs are having a negative impact on sales of light trucks of all kinds.

Consumers are moving in record numbers away from gas-guzzlers into more economical cars and crossovers. Ford has slashed production at factories three times this year and has now said it will push back the launch of the '09 F-150 to the end of the year — to give dealers time to clean out remaining '08s, of which there is something in the neighbourhood of 150 days supply.

Not surprisingly, Ford is warning of more losses in 2008 — more than the $1.1-billion (U.S.) it lost before taxes in 2007. Ford also said it would burn through more cash than the $14-billion to $16-billion it previously projected for the period from 2007 through the end of 2009.

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