1 00:00:02,520 --> 00:00:07,800 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News Ford. 2 00:00:07,840 --> 00:00:10,920 Speaker 2: Those shares higher in after hours, trading up about four percent. 3 00:00:11,119 --> 00:00:14,080 Speaker 2: Adjusted EPs beating estimates at forty nine cents a share, 4 00:00:14,120 --> 00:00:17,400 Speaker 2: total revenue beating estimates at roughly about forty three billion 5 00:00:17,440 --> 00:00:21,160 Speaker 2: dollars in the company standing behind it's full year forecast. 6 00:00:21,200 --> 00:00:24,320 Speaker 2: John Lawler joining us right now, the chief financial officer 7 00:00:24,640 --> 00:00:27,280 Speaker 2: over at Ford and John, on the surface, these numbers 8 00:00:27,280 --> 00:00:29,319 Speaker 2: look pretty good, as you know, still a lot of 9 00:00:29,400 --> 00:00:33,120 Speaker 2: questions and concerns about cost cutting. How much more should 10 00:00:33,120 --> 00:00:34,160 Speaker 2: investors expect? 11 00:00:34,400 --> 00:00:37,479 Speaker 3: Well, we had a really solid quarter, and you know, 12 00:00:37,600 --> 00:00:40,880 Speaker 3: we didn't expand our guidance range of justiny bit between 13 00:00:40,880 --> 00:00:43,960 Speaker 3: ten and twelve billion, but we have indicated that we're 14 00:00:43,960 --> 00:00:46,440 Speaker 3: our trajectory is towards the high end of that guidance. 15 00:00:46,479 --> 00:00:48,519 Speaker 3: So you know, it looks like we're on track for 16 00:00:48,560 --> 00:00:49,800 Speaker 3: a really solid year this year. 17 00:00:49,960 --> 00:00:52,199 Speaker 2: I'd be remiss in not asking you about a lot 18 00:00:52,200 --> 00:00:54,880 Speaker 2: of the concerns right now going on in the EV space. 19 00:00:55,160 --> 00:00:57,640 Speaker 2: The model E business at Ford was at least the 20 00:00:57,640 --> 00:01:00,440 Speaker 2: worst performing of the major businesses. We got earnings out 21 00:01:00,440 --> 00:01:02,840 Speaker 2: of a couple of your competitors, including GM and Tesla, 22 00:01:03,160 --> 00:01:05,520 Speaker 2: and at least on the EV side, things weren't much better. 23 00:01:05,680 --> 00:01:07,959 Speaker 2: Do you see any hope of improvement in that business 24 00:01:08,000 --> 00:01:08,440 Speaker 2: this year? 25 00:01:09,240 --> 00:01:13,040 Speaker 3: Well, you know, we're segmented, so we're different than many 26 00:01:13,080 --> 00:01:15,840 Speaker 3: of our competitors, at least the traditional OEM. So you 27 00:01:15,880 --> 00:01:19,280 Speaker 3: have the transparency about where we're at with our electric 28 00:01:19,360 --> 00:01:23,040 Speaker 3: vehicle business relative to our commercial business in our internal 29 00:01:23,040 --> 00:01:26,560 Speaker 3: combustion engine business, So you have the transparency. Look, we 30 00:01:26,680 --> 00:01:29,760 Speaker 3: know that we need to have the electric business stand 31 00:01:29,800 --> 00:01:32,000 Speaker 3: on its own. It needs to be profitable, it needs 32 00:01:32,040 --> 00:01:34,640 Speaker 3: to provide a return on the invested capital, and we're 33 00:01:34,640 --> 00:01:38,000 Speaker 3: working diligently to get there. And you know, we have 34 00:01:38,040 --> 00:01:40,279 Speaker 3: a lot of hopes, and we know that our second 35 00:01:40,319 --> 00:01:42,960 Speaker 3: generation in vehicles that will be coming out in a 36 00:01:43,000 --> 00:01:45,080 Speaker 3: couple of years are going to be a big step 37 00:01:45,080 --> 00:01:48,040 Speaker 3: forward and bring us to the point where we will 38 00:01:48,080 --> 00:01:50,840 Speaker 3: be profitable. So we won't launch them if we're not profitable. 39 00:01:51,160 --> 00:01:53,440 Speaker 3: So you know, we've got to make the best of 40 00:01:53,480 --> 00:01:55,560 Speaker 3: it through this period here until we get to the 41 00:01:55,560 --> 00:01:58,680 Speaker 3: second generation vehicles, and we'll continue to manage that and 42 00:01:58,720 --> 00:01:59,960 Speaker 3: optimize across the company. 43 00:02:00,440 --> 00:02:04,200 Speaker 4: Well, John, I mean, hypothetically speaking, what would it take 44 00:02:04,240 --> 00:02:06,120 Speaker 4: for you to maybe say, okay, we're going to make 45 00:02:06,160 --> 00:02:08,760 Speaker 4: this segment much smaller than it was. We know that 46 00:02:08,800 --> 00:02:12,640 Speaker 4: EV adoption has been really slowing down and really below 47 00:02:12,680 --> 00:02:14,800 Speaker 4: what a lot of people, especially. 48 00:02:14,400 --> 00:02:16,000 Speaker 1: The automakers, had expected. 49 00:02:16,280 --> 00:02:19,280 Speaker 4: How committed are you to the EV space when you 50 00:02:19,320 --> 00:02:22,400 Speaker 4: look five ten years out, Well. 51 00:02:22,240 --> 00:02:24,600 Speaker 3: Look EV's. You know, it's not a matter of if, 52 00:02:24,960 --> 00:02:27,600 Speaker 3: it's a matter of how fast they are. The future. 53 00:02:27,760 --> 00:02:31,080 Speaker 3: We will be going there, the industry will be going there. 54 00:02:31,360 --> 00:02:33,720 Speaker 3: It's just I don't think we should question that. It's 55 00:02:33,760 --> 00:02:36,320 Speaker 3: the pace of change, in the pace of adoption, and 56 00:02:36,400 --> 00:02:39,360 Speaker 3: so we're going to write size in the near term 57 00:02:39,440 --> 00:02:42,560 Speaker 3: to match our capacity and the investments to where the 58 00:02:42,600 --> 00:02:45,960 Speaker 3: consumer is, and then we'll accelerate as the consumer accelerates. 59 00:02:46,240 --> 00:02:49,959 Speaker 3: But make no mistake that evs are important because they're 60 00:02:50,000 --> 00:02:53,200 Speaker 3: a big part of what all automotive companies need to 61 00:02:53,200 --> 00:02:57,720 Speaker 3: do to meet compliance for greenhouse gases and zero emission vehicles. 62 00:02:57,720 --> 00:02:59,639 Speaker 3: So they're a big part of what we all need 63 00:02:59,680 --> 00:03:02,960 Speaker 3: to do to hit those compliance regulation requirements that we have. 64 00:03:03,480 --> 00:03:05,240 Speaker 4: Let's talk about the price tag, because I think a 65 00:03:05,280 --> 00:03:08,480 Speaker 4: lot of consumers, in addition to maybe some range anxieties, 66 00:03:08,560 --> 00:03:11,440 Speaker 4: the perception is that EV's are a lot more expensive 67 00:03:11,480 --> 00:03:14,520 Speaker 4: than what I could get from some of those traditional engines. 68 00:03:14,560 --> 00:03:17,000 Speaker 1: So when it comes to your plans for that twenty. 69 00:03:16,720 --> 00:03:21,440 Speaker 4: Five thousand dollars more affordable EV, it seems like it's 70 00:03:21,480 --> 00:03:23,960 Speaker 4: going to take until late twenty twenty six. 71 00:03:24,320 --> 00:03:26,840 Speaker 1: Why is it going to take that long to develop? 72 00:03:27,440 --> 00:03:30,040 Speaker 3: Well, it's a completely new platform and it's a new 73 00:03:30,080 --> 00:03:32,280 Speaker 3: way and a new approach of how you develop a vehicle. 74 00:03:32,560 --> 00:03:34,520 Speaker 3: We have a team out in California. We call it 75 00:03:34,560 --> 00:03:40,000 Speaker 3: our skunk works team. Individuals that have designed EV's, successful EV's, 76 00:03:40,080 --> 00:03:44,480 Speaker 3: profitable evs with other companies are there. It's a whole 77 00:03:44,520 --> 00:03:47,400 Speaker 3: new approach. It's a brand new, ground up platform and 78 00:03:47,920 --> 00:03:51,440 Speaker 3: they're taking you know, they're taking those learnings and they're 79 00:03:51,480 --> 00:03:53,440 Speaker 3: applying it here. And it takes a couple of years 80 00:03:53,480 --> 00:03:57,000 Speaker 3: to develop a complex vehicle like that, and that's what 81 00:03:57,040 --> 00:03:57,520 Speaker 3: they're doing. 82 00:03:57,880 --> 00:03:59,560 Speaker 2: All right. Well, there's a lot of work, certainly to 83 00:03:59,600 --> 00:04:03,240 Speaker 2: do on the EV side. I am curious John, if 84 00:04:03,240 --> 00:04:05,840 Speaker 2: you can talk a little bit about the commercial line 85 00:04:05,840 --> 00:04:07,960 Speaker 2: that you have over there Ford Pro, that unit that 86 00:04:08,000 --> 00:04:10,560 Speaker 2: appeared to be kind of the standout in the most 87 00:04:10,560 --> 00:04:13,880 Speaker 2: recent quarter. What exactly is driving that? And more importantly, John, 88 00:04:14,160 --> 00:04:16,360 Speaker 2: is any of that going to be transferable to the 89 00:04:16,400 --> 00:04:17,600 Speaker 2: consumer side of the business. 90 00:04:18,040 --> 00:04:21,039 Speaker 3: Well, it's an incredible business in Ford Pro. We have 91 00:04:21,160 --> 00:04:23,559 Speaker 3: motes from our products. We have motes from the fact 92 00:04:23,560 --> 00:04:27,760 Speaker 3: that we provide software services that help our commercial customers 93 00:04:27,800 --> 00:04:32,440 Speaker 3: improve productivity and uptime and it makes their business stronger. 94 00:04:32,480 --> 00:04:34,880 Speaker 3: And the learnings that we have there are transferable to 95 00:04:34,960 --> 00:04:38,080 Speaker 3: the retail side, and we're doing that today, especially around 96 00:04:38,120 --> 00:04:42,039 Speaker 3: service and the conveniences that we've learned about from the 97 00:04:42,040 --> 00:04:45,680 Speaker 3: commercial customers. So it's a really strong business. We've talked 98 00:04:45,680 --> 00:04:48,120 Speaker 3: about it being a strong business, and we've talked about 99 00:04:48,160 --> 00:04:50,320 Speaker 3: the earnings potential and I think you see that clearly 100 00:04:50,360 --> 00:04:52,880 Speaker 3: in the first quarter with a print of adjusted EBIT 101 00:04:52,920 --> 00:04:53,920 Speaker 3: of three billion dollars. 102 00:04:54,240 --> 00:04:56,000 Speaker 2: And that gets to this idea too, because I mean, 103 00:04:56,040 --> 00:04:57,760 Speaker 2: when you look at some of the features that go 104 00:04:57,839 --> 00:05:01,279 Speaker 2: into a lot of the commercial vehicles and the idea 105 00:05:01,320 --> 00:05:04,440 Speaker 2: that at some point, at least when the cost is feasible, 106 00:05:04,480 --> 00:05:06,800 Speaker 2: that could transfer there. There's been a lot of discussion 107 00:05:06,839 --> 00:05:10,200 Speaker 2: here about Ford kind of upping its software game, basically 108 00:05:10,279 --> 00:05:12,520 Speaker 2: getting beyond just obviously what you do best, which is 109 00:05:12,560 --> 00:05:15,080 Speaker 2: the actual building up the cars themselves. When it comes 110 00:05:15,080 --> 00:05:16,920 Speaker 2: to the software and the tech side of this year. 111 00:05:17,200 --> 00:05:19,320 Speaker 2: Have you done hiring in that space, Have you done 112 00:05:19,360 --> 00:05:21,279 Speaker 2: any sort of made so, any sort of attempt to 113 00:05:21,320 --> 00:05:24,040 Speaker 2: actually beef up that business if you will. I know 114 00:05:24,120 --> 00:05:26,000 Speaker 2: it's not technically a standalone business. 115 00:05:25,640 --> 00:05:28,640 Speaker 3: But you know what I mean absolutely, Over the last 116 00:05:28,680 --> 00:05:31,760 Speaker 3: few years, we've been hiring. We've been bringing in experts 117 00:05:31,760 --> 00:05:36,240 Speaker 3: from the outside, consumer product software experts, etc. And that's 118 00:05:36,279 --> 00:05:38,120 Speaker 3: a real big part of what we've seen with the 119 00:05:38,520 --> 00:05:40,920 Speaker 3: Ford Pro story. If you look at it over the 120 00:05:41,000 --> 00:05:44,320 Speaker 3: last twelve months, about thirteen percent of their EBITs come 121 00:05:44,360 --> 00:05:47,400 Speaker 3: from software and physical services, and we expect that to 122 00:05:47,400 --> 00:05:50,080 Speaker 3: grow to twenty percent of their adjusted EBIT in a 123 00:05:50,080 --> 00:05:52,400 Speaker 3: few years. So we have a team in place. We 124 00:05:52,440 --> 00:05:54,599 Speaker 3: have a great team we've recruited from the outside with 125 00:05:54,680 --> 00:05:57,680 Speaker 3: some folks that we had inside building out those services 126 00:05:57,720 --> 00:06:00,880 Speaker 3: that are pro customers love because make some more productive, 127 00:06:00,920 --> 00:06:01,919 Speaker 3: it improves their business. 128 00:06:02,320 --> 00:06:02,960 Speaker 1: And I also want to. 129 00:06:02,920 --> 00:06:05,560 Speaker 4: Talk about some of your other models, specifically your gas 130 00:06:05,680 --> 00:06:08,520 Speaker 4: powered models. I'm thinking about the Bronco for example. I'm 131 00:06:08,560 --> 00:06:11,080 Speaker 4: thinking about the Maverick in addition to the. 132 00:06:11,040 --> 00:06:11,719 Speaker 1: F one fifties. 133 00:06:11,720 --> 00:06:14,000 Speaker 4: But I feel like I've seen so many Broncos on 134 00:06:14,040 --> 00:06:17,280 Speaker 4: the road. How are you thinking about output levels in 135 00:06:17,320 --> 00:06:20,680 Speaker 4: those areas. Again, those gas powered vehicles. 136 00:06:20,760 --> 00:06:26,320 Speaker 3: Well, we have incredible brands across our company between F Series, Bronco, Mustang, 137 00:06:26,360 --> 00:06:29,679 Speaker 3: you name it, and demand's very strong. Demand's very strong 138 00:06:29,720 --> 00:06:32,679 Speaker 3: for all of those vehicles. So we're meeting that demand. 139 00:06:32,800 --> 00:06:35,760 Speaker 3: We're continuing to produce. We're working on, you know, getting 140 00:06:35,800 --> 00:06:37,840 Speaker 3: as much out of our factors as we can, and 141 00:06:37,960 --> 00:06:40,240 Speaker 3: you see that in our results. We just launched the 142 00:06:40,240 --> 00:06:43,240 Speaker 3: brand new F one fifty in the first quarter here. 143 00:06:43,279 --> 00:06:45,640 Speaker 3: It's now selling very well, so there's a lot of 144 00:06:45,680 --> 00:06:47,480 Speaker 3: upside there in the blue business through the rest of 145 00:06:47,520 --> 00:06:47,839 Speaker 3: the year. 146 00:06:48,040 --> 00:06:51,080 Speaker 4: All right, John, really appreciate your time today. On the 147 00:06:51,120 --> 00:06:53,520 Speaker 4: heels of that earnings release are thanks of course. 148 00:06:53,360 --> 00:06:56,560 Speaker 1: To John Lawler. He is Ford's chief financial officer.