1 00:00:02,520 --> 00:00:08,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news, Bloomboxman Miller is standing 2 00:00:08,560 --> 00:00:11,440 Speaker 1: by with a special guest. Good morning, Matt, Good morning Jonathan. 3 00:00:11,600 --> 00:00:14,400 Speaker 1: I'm here with the CEO Ford, Jim Farley and Jim. 4 00:00:14,440 --> 00:00:17,239 Speaker 1: A lot to talk about here at Lamar with you. 5 00:00:17,239 --> 00:00:19,360 Speaker 1: You just got out of a race car. But before 6 00:00:19,400 --> 00:00:21,120 Speaker 1: we do that, I want to ask you about the 7 00:00:21,200 --> 00:00:25,720 Speaker 1: Israeli strike on Iran and the counter attack. Are all 8 00:00:25,760 --> 00:00:28,320 Speaker 1: of the Ford employees that you know of in safe places? 9 00:00:28,320 --> 00:00:30,200 Speaker 2: You do have operations in the Middle East? We do. 10 00:00:30,240 --> 00:00:33,720 Speaker 2: It's a really important region for us. We're watching Turkey 11 00:00:33,760 --> 00:00:37,120 Speaker 2: as well. We have a huge operation in Turkey. We 12 00:00:37,200 --> 00:00:40,400 Speaker 2: export all the way through Europe and the UK. So 13 00:00:40,400 --> 00:00:44,159 Speaker 2: so far, so good, but it's clearly a concern for 14 00:00:44,200 --> 00:00:45,159 Speaker 2: all of us in business. 15 00:00:45,200 --> 00:00:47,080 Speaker 1: One of the things we've seen as a result, obviously, 16 00:00:47,200 --> 00:00:50,440 Speaker 1: is the oil price rise five or six percent really 17 00:00:50,440 --> 00:00:54,200 Speaker 1: across the board. Has the low oil price been helpful 18 00:00:54,240 --> 00:00:59,240 Speaker 1: to you or has it not helped to encourage people 19 00:00:59,240 --> 00:00:59,960 Speaker 1: to buy electric car? 20 00:01:00,960 --> 00:01:03,440 Speaker 2: Yeah, it's interesting because it cuts both ways. At forward, 21 00:01:03,480 --> 00:01:06,800 Speaker 2: we're sixty percent almost of the commercial business in the US, 22 00:01:06,840 --> 00:01:08,440 Speaker 2: and a lot of that is energy. So you go 23 00:01:08,480 --> 00:01:11,600 Speaker 2: to Odessa, Texas. Everyone drives the forward zuper duty. So 24 00:01:12,319 --> 00:01:15,400 Speaker 2: you know, if oil isn't in that sixty five seventy 25 00:01:15,440 --> 00:01:20,000 Speaker 2: dollars range, our customer suffer. But you know, obviously, I 26 00:01:20,040 --> 00:01:21,959 Speaker 2: think for the economy and for everything, it needs to 27 00:01:21,959 --> 00:01:24,960 Speaker 2: be in that kind of range. That makes sense for everything. 28 00:01:25,319 --> 00:01:28,959 Speaker 2: Large spikes, big changes in oil prices and gas prices 29 00:01:29,160 --> 00:01:32,400 Speaker 2: have huge impacts on our demand. We see truck and 30 00:01:32,760 --> 00:01:35,600 Speaker 2: full sized SGUV demand go down when they're big spikes. 31 00:01:35,640 --> 00:01:38,959 Speaker 2: Happened in eight it happened many times. So no, I 32 00:01:39,000 --> 00:01:42,480 Speaker 2: don't think our business likes big changes. For the consumer, 33 00:01:42,640 --> 00:01:43,880 Speaker 2: it's very stressful for them. 34 00:01:44,000 --> 00:01:46,400 Speaker 1: The electric business, though, I would imagine, also is dependent 35 00:01:46,440 --> 00:01:49,400 Speaker 1: on kind in some sense higher gas prices. 36 00:01:49,560 --> 00:01:52,240 Speaker 2: I drove your Lightning. It was fantastic, spent a week 37 00:01:52,240 --> 00:01:52,440 Speaker 2: in it. 38 00:01:52,840 --> 00:01:56,320 Speaker 1: I've driven the Machi for a couple of weeks, and 39 00:01:56,560 --> 00:01:58,360 Speaker 1: one of the great pleasures is you don't ever have 40 00:01:58,440 --> 00:02:00,640 Speaker 1: to go to a gas station. Right How are those 41 00:02:00,680 --> 00:02:02,960 Speaker 1: businesses doing right now because you've taken such big losses 42 00:02:02,960 --> 00:02:06,320 Speaker 1: there and maybe slowed down in terms of your progress 43 00:02:06,360 --> 00:02:07,120 Speaker 1: into evs. 44 00:02:07,440 --> 00:02:10,160 Speaker 2: Yeah, we've really changed because we're thankful we've been number 45 00:02:10,240 --> 00:02:14,079 Speaker 2: two to Tesla for three years in the US because 46 00:02:14,120 --> 00:02:16,880 Speaker 2: we spent our capital like five six years ago and 47 00:02:16,919 --> 00:02:19,200 Speaker 2: all that product's been out for four years that you mentioned. 48 00:02:19,360 --> 00:02:22,200 Speaker 2: So we've learned a ton now. We've changed our capital 49 00:02:22,280 --> 00:02:26,160 Speaker 2: allocation for evs. We've reduced the spending, changed the battery 50 00:02:26,200 --> 00:02:28,959 Speaker 2: chemistry a lot to focus on more profitability. We've gone 51 00:02:29,040 --> 00:02:31,720 Speaker 2: down market and mostly in commercial. Those are the only 52 00:02:31,760 --> 00:02:34,079 Speaker 2: markets where we think in the US, you know, an 53 00:02:34,120 --> 00:02:36,280 Speaker 2: age seven percent of the industry is going to make 54 00:02:36,360 --> 00:02:38,960 Speaker 2: sense for EV where you can actually make money. And 55 00:02:39,000 --> 00:02:42,560 Speaker 2: the EPA requirements have a big impact on the EV 56 00:02:42,680 --> 00:02:46,160 Speaker 2: investments by OEMs. During the last several years, you know, 57 00:02:46,240 --> 00:02:48,160 Speaker 2: we had to kind of sell like fifteen to twenty 58 00:02:48,160 --> 00:02:50,639 Speaker 2: percent of our mix to be EV's both for the 59 00:02:50,760 --> 00:02:54,680 Speaker 2: ZEB States California, Colorado, New York, but also you know, 60 00:02:54,760 --> 00:02:59,320 Speaker 2: to meet the national tailpipe emissions. And so what's happened. Interestingly, 61 00:03:00,080 --> 00:03:02,799 Speaker 2: the total number of evs in the US has grown, 62 00:03:03,600 --> 00:03:06,480 Speaker 2: but the total revenue has not changed in three years 63 00:03:06,639 --> 00:03:09,560 Speaker 2: because the prices have come down equal to the volume 64 00:03:09,600 --> 00:03:12,000 Speaker 2: going up. So the EV market has not been going 65 00:03:12,040 --> 00:03:14,160 Speaker 2: for three years. If you look at total revenue. Everyone 66 00:03:14,160 --> 00:03:16,400 Speaker 2: looks at unit volume, don't look at that, look at 67 00:03:16,400 --> 00:03:19,480 Speaker 2: the price and the volume, and I think we now 68 00:03:19,520 --> 00:03:21,600 Speaker 2: have a good strategy going forward. A lot of our 69 00:03:21,639 --> 00:03:25,000 Speaker 2: competitors are just investing for the first time, and good 70 00:03:25,080 --> 00:03:28,320 Speaker 2: luck if you're selling an eighty thousand dollars SUV electric vehicle. 71 00:03:28,600 --> 00:03:32,680 Speaker 2: We've invested a lot in hybrid. We are really successful 72 00:03:32,720 --> 00:03:35,720 Speaker 2: with our truck. Hybrid's twenty five the best selling vehicle 73 00:03:35,720 --> 00:03:37,280 Speaker 2: in the US for forty seven years, been in the 74 00:03:37,360 --> 00:03:40,400 Speaker 2: F one fifty. Twenty five percent of those customers now 75 00:03:40,440 --> 00:03:43,400 Speaker 2: by hybrid, and a lot of it is exportable power. 76 00:03:43,440 --> 00:03:45,560 Speaker 2: You can run your house for six days with an 77 00:03:45,640 --> 00:03:48,680 Speaker 2: F one fifty hybrid now and the others don't offer 78 00:03:48,680 --> 00:03:51,480 Speaker 2: that at all. So yeah, we think hybrid is really 79 00:03:51,680 --> 00:03:55,400 Speaker 2: the mainstream technology. We'll see erevs come to the US 80 00:03:55,440 --> 00:03:58,320 Speaker 2: soon as the next technology for partial ELECTRICI I want 81 00:03:58,320 --> 00:03:59,279 Speaker 2: to ask you about. 82 00:04:00,680 --> 00:04:03,240 Speaker 1: Race on Sunday, sell on Monday, since we're here at LAMA, 83 00:04:03,360 --> 00:04:05,720 Speaker 1: since you just got out of a Mustang race car, 84 00:04:06,720 --> 00:04:10,160 Speaker 1: how does this racing effort, and it's a big effort 85 00:04:10,520 --> 00:04:13,680 Speaker 1: trickle down to the bottom line for Ford shareholders. 86 00:04:14,040 --> 00:04:16,840 Speaker 2: Well, for us, the biggest is off road market. You know, 87 00:04:16,880 --> 00:04:19,480 Speaker 2: we have you know almost twenty percent of a global 88 00:04:19,520 --> 00:04:22,200 Speaker 2: profit coming from our enthusiasts off road products, and we 89 00:04:22,320 --> 00:04:24,560 Speaker 2: race it to car. We said Baja, we have said 90 00:04:24,600 --> 00:04:26,880 Speaker 2: King and the Hammers. That's a big thing, you know. 91 00:04:27,120 --> 00:04:29,279 Speaker 2: I don't think there's a better way to promote your brand. 92 00:04:29,279 --> 00:04:32,159 Speaker 2: Look what Ford winning in sixty six at Lama did 93 00:04:32,200 --> 00:04:34,960 Speaker 2: for Ford Motor Company. It made us a global company. 94 00:04:35,000 --> 00:04:39,080 Speaker 2: We're American company, but that moment changed us completely, and 95 00:04:39,120 --> 00:04:42,640 Speaker 2: that's why we're going back in twenty seven to take 96 00:04:42,680 --> 00:04:45,000 Speaker 2: on Ferrari and take on Porsche. We think we have 97 00:04:45,040 --> 00:04:50,000 Speaker 2: the technology, but also the tech transfer, software, battery, tech, 98 00:04:50,200 --> 00:04:53,520 Speaker 2: error dynamics. It's different than the seventies, but the tech 99 00:04:53,520 --> 00:04:56,560 Speaker 2: transfer over to our road cars is immediate. You'll see 100 00:04:56,640 --> 00:05:00,479 Speaker 2: hundreds of Ford engineers here who will be working on 101 00:05:00,560 --> 00:05:05,120 Speaker 2: Monday on our road cars. And it's really important tech transfer, 102 00:05:05,440 --> 00:05:08,920 Speaker 2: but we do it, I think as smart as we can. 103 00:05:09,040 --> 00:05:11,880 Speaker 2: And maybe as a racer I'm more sensitive about wasting 104 00:05:11,920 --> 00:05:16,120 Speaker 2: money on racing, and we challenge ourselves to be really smart. 105 00:05:16,320 --> 00:05:18,400 Speaker 2: I think we've done a great job with the off road, 106 00:05:18,440 --> 00:05:22,680 Speaker 2: the raptors, the tremors, you know, all the broncos. I 107 00:05:22,720 --> 00:05:25,880 Speaker 2: think that's been frankly some of the smartest investment we 108 00:05:26,000 --> 00:05:27,440 Speaker 2: had in racing. 109 00:05:28,240 --> 00:05:30,240 Speaker 1: You say you're an American company, You've outed yourself as 110 00:05:30,279 --> 00:05:32,680 Speaker 1: literally the most American car maker. Eighty percent of the 111 00:05:32,680 --> 00:05:34,480 Speaker 1: cars that you sell in America are made there. 112 00:05:34,680 --> 00:05:37,239 Speaker 2: Donald Trump was out overnight saying maybe he's. 113 00:05:37,040 --> 00:05:40,080 Speaker 1: Going to go after even higher auto tariffs. While you've 114 00:05:40,080 --> 00:05:42,960 Speaker 1: said in the past that causes costs and chaos, does 115 00:05:42,960 --> 00:05:45,400 Speaker 1: it also kind of help you because no one else 116 00:05:45,440 --> 00:05:47,400 Speaker 1: makes as many cars as you do in America. 117 00:05:47,480 --> 00:05:50,120 Speaker 2: Well, for Forward, this is a moment for us. You know, 118 00:05:50,160 --> 00:05:53,000 Speaker 2: we have employee pricing out there. We gained a couple 119 00:05:53,080 --> 00:05:55,160 Speaker 2: points a share year over year. A lot of Americans 120 00:05:55,160 --> 00:05:57,880 Speaker 2: are shopping Forward because now they're starting to think, hey, 121 00:05:58,400 --> 00:06:02,080 Speaker 2: half the cars in the US are imports, and if 122 00:06:02,320 --> 00:06:05,280 Speaker 2: all the car companies were like Ford, there'd be fifteen 123 00:06:05,279 --> 00:06:08,159 Speaker 2: new factories in the US, a million new jobs. You know. 124 00:06:08,200 --> 00:06:09,840 Speaker 2: I think a lot of Americans are starting to pay 125 00:06:09,880 --> 00:06:13,240 Speaker 2: attention to where these where these cars come from. And 126 00:06:13,400 --> 00:06:18,280 Speaker 2: for us, yes, I think Donald Trump's policies, especially around 127 00:06:18,279 --> 00:06:22,440 Speaker 2: the Asian countries where you know they've supported with substies 128 00:06:22,520 --> 00:06:25,920 Speaker 2: direct or indirect for their automobile industry. You know, this 129 00:06:25,960 --> 00:06:28,400 Speaker 2: is a great thing. We have to sort out as 130 00:06:28,520 --> 00:06:31,880 Speaker 2: Mexico Canada thing because we need to keep the vehicles 131 00:06:31,920 --> 00:06:34,240 Speaker 2: affordable in the US and there's actually a lot of 132 00:06:34,240 --> 00:06:36,400 Speaker 2: parts we can't even make in the US, Matt as 133 00:06:36,400 --> 00:06:38,760 Speaker 2: you know, and so we have to kind of sort 134 00:06:38,839 --> 00:06:42,000 Speaker 2: out what it ruled does Mexico and Canada have in 135 00:06:42,040 --> 00:06:45,560 Speaker 2: our North America market from supply chain and manufacturing keep 136 00:06:45,560 --> 00:06:49,120 Speaker 2: the vehicles affordable. And that's something that we're talking the administration. 137 00:06:49,560 --> 00:06:53,240 Speaker 2: We found the administration to be very positive to work with. 138 00:06:53,600 --> 00:06:55,919 Speaker 2: They want to help companies like Ford that did the 139 00:06:55,960 --> 00:06:58,960 Speaker 2: right thing for Americans. But we have more work to 140 00:06:58,960 --> 00:06:59,560 Speaker 2: do in. 141 00:06:59,640 --> 00:07:02,360 Speaker 1: Terms of what the administration has been trying to do 142 00:07:02,480 --> 00:07:06,200 Speaker 1: with China. Are you satisfied with the rare earth minerals 143 00:07:06,200 --> 00:07:08,400 Speaker 1: that you have access to? I know that you had 144 00:07:08,400 --> 00:07:11,680 Speaker 1: to slow down production in the past. Yes, Have you 145 00:07:11,720 --> 00:07:14,840 Speaker 1: been able to secure the amount of magnets. 146 00:07:14,480 --> 00:07:17,800 Speaker 2: That you need? It's stay to day. It's stay to day. 147 00:07:18,720 --> 00:07:21,600 Speaker 2: These high payern magnets, the raw materials for them only 148 00:07:21,640 --> 00:07:24,040 Speaker 2: come from certain places in the world. They're all processed 149 00:07:24,040 --> 00:07:27,240 Speaker 2: in China and they go in your speakers and your autosystem. 150 00:07:27,280 --> 00:07:30,880 Speaker 2: They go in your motors, for your wipers and your seats. 151 00:07:31,080 --> 00:07:34,480 Speaker 2: They're all over our F one fifty for example. We 152 00:07:34,520 --> 00:07:37,440 Speaker 2: have applications in them offcom. They're getting approved one at 153 00:07:37,480 --> 00:07:41,520 Speaker 2: a time. You know, we're educating the administration, we're educating 154 00:07:42,200 --> 00:07:45,600 Speaker 2: the Chinese leadership about how important these jobs in the 155 00:07:45,840 --> 00:07:49,400 Speaker 2: Midwest are. There dependent. We have had to shut down factories. 156 00:07:50,120 --> 00:07:54,200 Speaker 2: It's hand to mouth right now, and I'm reading the 157 00:07:54,200 --> 00:07:56,600 Speaker 2: paper like everyone else. I was very happy to read 158 00:07:56,640 --> 00:07:59,440 Speaker 2: about London and having a good meeting there because it 159 00:07:59,440 --> 00:08:02,160 Speaker 2: has a direct impact and our jobs in Michigan, Ohio. 160 00:08:03,320 --> 00:08:05,600 Speaker 2: So we'll see. It's hand and mouth right now. 161 00:08:05,920 --> 00:08:08,800 Speaker 1: Jim, thanks so much, really appreciate your time and congratulations 162 00:08:08,840 --> 00:08:09,280 Speaker 1: on the race. 163 00:08:09,320 --> 00:08:11,440 Speaker 2: Thank you this morning. Look forward to you and the 164 00:08:11,520 --> 00:08:12,200 Speaker 2: challenge tomorrow.