Speaker 1: Bloomberg Audio Studios, podcasts, radio news, Bloomboxman Miller is standing
Speaker 1: by with a special guest. Good morning, Matt, Good morning Jonathan.
Speaker 1: I'm here with the CEO Ford, Jim Farley and Jim.
Speaker 1: A lot to talk about here at Lamar with you.
Speaker 1: You just got out of a race car. But before
Speaker 1: we do that, I want to ask you about the
Speaker 1: Israeli strike on Iran and the counter attack. Are all
Speaker 1: of the Ford employees that you know of in safe places?
Speaker 2: You do have operations in the Middle East? We do.
Speaker 2: It's a really important region for us. We're watching Turkey
Speaker 2: as well. We have a huge operation in Turkey. We
Speaker 2: export all the way through Europe and the UK. So
Speaker 2: so far, so good, but it's clearly a concern for
Speaker 2: all of us in business.
Speaker 1: One of the things we've seen as a result, obviously,
Speaker 1: is the oil price rise five or six percent really
Speaker 1: across the board. Has the low oil price been helpful
Speaker 1: to you or has it not helped to encourage people
Speaker 1: to buy electric car?
Speaker 2: Yeah, it's interesting because it cuts both ways. At forward,
Speaker 2: we're sixty percent almost of the commercial business in the US,
Speaker 2: and a lot of that is energy. So you go
Speaker 2: to Odessa, Texas. Everyone drives the forward zuper duty. So
Speaker 2: you know, if oil isn't in that sixty five seventy
Speaker 2: dollars range, our customer suffer. But you know, obviously, I
Speaker 2: think for the economy and for everything, it needs to
Speaker 2: be in that kind of range. That makes sense for everything.
Speaker 2: Large spikes, big changes in oil prices and gas prices
Speaker 2: have huge impacts on our demand. We see truck and
Speaker 2: full sized SGUV demand go down when they're big spikes.
Speaker 2: Happened in eight it happened many times. So no, I
Speaker 2: don't think our business likes big changes. For the consumer,
Speaker 2: it's very stressful for them.
Speaker 1: The electric business, though, I would imagine, also is dependent
Speaker 1: on kind in some sense higher gas prices.
Speaker 2: I drove your Lightning. It was fantastic, spent a week
Speaker 2: in it.
Speaker 1: I've driven the Machi for a couple of weeks, and
Speaker 1: one of the great pleasures is you don't ever have
Speaker 1: to go to a gas station. Right How are those
Speaker 1: businesses doing right now because you've taken such big losses
Speaker 1: there and maybe slowed down in terms of your progress
Speaker 1: into evs.
Speaker 2: Yeah, we've really changed because we're thankful we've been number
Speaker 2: two to Tesla for three years in the US because
Speaker 2: we spent our capital like five six years ago and
Speaker 2: all that product's been out for four years that you mentioned.
Speaker 2: So we've learned a ton now. We've changed our capital
Speaker 2: allocation for evs. We've reduced the spending, changed the battery
Speaker 2: chemistry a lot to focus on more profitability. We've gone
Speaker 2: down market and mostly in commercial. Those are the only
Speaker 2: markets where we think in the US, you know, an
Speaker 2: age seven percent of the industry is going to make
Speaker 2: sense for EV where you can actually make money. And
Speaker 2: the EPA requirements have a big impact on the EV
Speaker 2: investments by OEMs. During the last several years, you know,
Speaker 2: we had to kind of sell like fifteen to twenty
Speaker 2: percent of our mix to be EV's both for the
Speaker 2: ZEB States California, Colorado, New York, but also you know,
Speaker 2: to meet the national tailpipe emissions. And so what's happened. Interestingly,
Speaker 2: the total number of evs in the US has grown,
Speaker 2: but the total revenue has not changed in three years
Speaker 2: because the prices have come down equal to the volume
Speaker 2: going up. So the EV market has not been going
Speaker 2: for three years. If you look at total revenue. Everyone
Speaker 2: looks at unit volume, don't look at that, look at
Speaker 2: the price and the volume, and I think we now
Speaker 2: have a good strategy going forward. A lot of our
Speaker 2: competitors are just investing for the first time, and good
Speaker 2: luck if you're selling an eighty thousand dollars SUV electric vehicle.
Speaker 2: We've invested a lot in hybrid. We are really successful
Speaker 2: with our truck. Hybrid's twenty five the best selling vehicle
Speaker 2: in the US for forty seven years, been in the
Speaker 2: F one fifty. Twenty five percent of those customers now
Speaker 2: by hybrid, and a lot of it is exportable power.
Speaker 2: You can run your house for six days with an
Speaker 2: F one fifty hybrid now and the others don't offer
Speaker 2: that at all. So yeah, we think hybrid is really
Speaker 2: the mainstream technology. We'll see erevs come to the US
Speaker 2: soon as the next technology for partial ELECTRICI I want
Speaker 2: to ask you about.
Speaker 1: Race on Sunday, sell on Monday, since we're here at LAMA,
Speaker 1: since you just got out of a Mustang race car,
Speaker 1: how does this racing effort, and it's a big effort
Speaker 1: trickle down to the bottom line for Ford shareholders.
Speaker 2: Well, for us, the biggest is off road market. You know,
Speaker 2: we have you know almost twenty percent of a global
Speaker 2: profit coming from our enthusiasts off road products, and we
Speaker 2: race it to car. We said Baja, we have said
Speaker 2: King and the Hammers. That's a big thing, you know.
Speaker 2: I don't think there's a better way to promote your brand.
Speaker 2: Look what Ford winning in sixty six at Lama did
Speaker 2: for Ford Motor Company. It made us a global company.
Speaker 2: We're American company, but that moment changed us completely, and
Speaker 2: that's why we're going back in twenty seven to take
Speaker 2: on Ferrari and take on Porsche. We think we have
Speaker 2: the technology, but also the tech transfer, software, battery, tech,
Speaker 2: error dynamics. It's different than the seventies, but the tech
Speaker 2: transfer over to our road cars is immediate. You'll see
Speaker 2: hundreds of Ford engineers here who will be working on
Speaker 2: Monday on our road cars. And it's really important tech transfer,
Speaker 2: but we do it, I think as smart as we can.
Speaker 2: And maybe as a racer I'm more sensitive about wasting
Speaker 2: money on racing, and we challenge ourselves to be really smart.
Speaker 2: I think we've done a great job with the off road,
Speaker 2: the raptors, the tremors, you know, all the broncos. I
Speaker 2: think that's been frankly some of the smartest investment we
Speaker 2: had in racing.
Speaker 1: You say you're an American company, You've outed yourself as
Speaker 1: literally the most American car maker. Eighty percent of the
Speaker 1: cars that you sell in America are made there.
Speaker 2: Donald Trump was out overnight saying maybe he's.
Speaker 1: Going to go after even higher auto tariffs. While you've
Speaker 1: said in the past that causes costs and chaos, does
Speaker 1: it also kind of help you because no one else
Speaker 1: makes as many cars as you do in America.
Speaker 2: Well, for Forward, this is a moment for us. You know,
Speaker 2: we have employee pricing out there. We gained a couple
Speaker 2: points a share year over year. A lot of Americans
Speaker 2: are shopping Forward because now they're starting to think, hey,
Speaker 2: half the cars in the US are imports, and if
Speaker 2: all the car companies were like Ford, there'd be fifteen
Speaker 2: new factories in the US, a million new jobs. You know.
Speaker 2: I think a lot of Americans are starting to pay
Speaker 2: attention to where these where these cars come from. And
Speaker 2: for us, yes, I think Donald Trump's policies, especially around
Speaker 2: the Asian countries where you know they've supported with substies
Speaker 2: direct or indirect for their automobile industry. You know, this
Speaker 2: is a great thing. We have to sort out as
Speaker 2: Mexico Canada thing because we need to keep the vehicles
Speaker 2: affordable in the US and there's actually a lot of
Speaker 2: parts we can't even make in the US, Matt as
Speaker 2: you know, and so we have to kind of sort
Speaker 2: out what it ruled does Mexico and Canada have in
Speaker 2: our North America market from supply chain and manufacturing keep
Speaker 2: the vehicles affordable. And that's something that we're talking the administration.
Speaker 2: We found the administration to be very positive to work with.
Speaker 2: They want to help companies like Ford that did the
Speaker 2: right thing for Americans. But we have more work to
Speaker 2: do in.
Speaker 1: Terms of what the administration has been trying to do
Speaker 1: with China. Are you satisfied with the rare earth minerals
Speaker 1: that you have access to? I know that you had
Speaker 1: to slow down production in the past. Yes, Have you
Speaker 1: been able to secure the amount of magnets.
Speaker 2: That you need? It's stay to day. It's stay to day.
Speaker 2: These high payern magnets, the raw materials for them only
Speaker 2: come from certain places in the world. They're all processed
Speaker 2: in China and they go in your speakers and your autosystem.
Speaker 2: They go in your motors, for your wipers and your seats.
Speaker 2: They're all over our F one fifty for example. We
Speaker 2: have applications in them offcom. They're getting approved one at
Speaker 2: a time. You know, we're educating the administration, we're educating
Speaker 2: the Chinese leadership about how important these jobs in the
Speaker 2: Midwest are. There dependent. We have had to shut down factories.
Speaker 2: It's hand to mouth right now, and I'm reading the
Speaker 2: paper like everyone else. I was very happy to read
Speaker 2: about London and having a good meeting there because it
Speaker 2: has a direct impact and our jobs in Michigan, Ohio.
Speaker 2: So we'll see. It's hand and mouth right now.
Speaker 1: Jim, thanks so much, really appreciate your time and congratulations
Speaker 1: on the race.
Speaker 2: Thank you this morning. Look forward to you and the
Speaker 2: challenge tomorrow.