Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Yeah, I want to welcome our Bloomberg Television and Bloomberg
Speaker 2: Radio audiences to Michigan Central Station here in Detroit. I'm
Speaker 2: sitting down with Jim Farley, the CEO of Ford, as
Speaker 2: well as Laurent Meckis, who runs the Red Bull Racing team.
Speaker 3: It's a pleasure, gentlemen.
Speaker 2: I'm very excited as a fan of the brand and
Speaker 2: the league. And let me start Laurent with you, because
Speaker 2: you've said that this is the steepest hill f one
Speaker 2: has ever had to climb. New regulations this year are sweeping.
Speaker 2: It's not just a tweak here and there. And you're
Speaker 2: starting with the brand new partner with Ford, who is
Speaker 2: going to build the engine with you as a collaboration.
Speaker 2: Why choose Ford as a partner?
Speaker 4: You know, first, you're right, you know it's the biggest
Speaker 4: regulation pope in the Heast twel one, at least in
Speaker 4: the modern heastorield phone on one. It's also on that
Speaker 4: very same year that we chose the let me say
Speaker 4: crazy challenge to to go and build our mpoion it
Speaker 4: and if you.
Speaker 1: Do that, you want to part with the best.
Speaker 4: And we are in a lucky positions where we we
Speaker 4: have managed to strike these strategic technical partnership with Ford
Speaker 4: in this crazy advantage of building from absolutely zero our
Speaker 4: own POI in.
Speaker 1: It, and we go together and these in these new regulations.
Speaker 2: Jim, for you, this must be exciting because you've built
Speaker 2: honestly a new legacy for Ford in terms of racing.
Speaker 2: I mean, on the one hand, you've got the new
Speaker 2: industrialized America here. On the other hand, you're going back
Speaker 2: to Lamont with a hypercar in a couple of years.
Speaker 3: You're essentially doing DFV two point zero.
Speaker 1: Right, This is like the cause worth of old.
Speaker 2: Why do you when you're talking to Bill Ford, when
Speaker 2: you're talking to shareholders, how do you justify this, this
Speaker 2: spend and this you know drive to go racing?
Speaker 3: Well, a couple of things.
Speaker 5: First of all, the tech transfer, this sport that Laurent leads,
Speaker 5: this team that Laurent leads, you know, leader and aerodynamics,
Speaker 5: predictive failure components and software control of the hybrid system,
Speaker 5: high dis charge batteries. These are all core capabilities that
Speaker 5: we need for the next five to ten years as
Speaker 5: a company. So the tech transfer is very relevant for us.
Speaker 5: Like maybe four valves or overhead cams were in the sixties,
Speaker 5: you know, but the tech transfer is totally different today.
Speaker 5: Formula one is a complete digital sport and that's where
Speaker 5: we're going as a company.
Speaker 3: Number one. Number two is, you know, racing, especially in the.
Speaker 5: Off roll world, gives us credibility for customers that the
Speaker 5: product they buy has real capability that's been tested in
Speaker 5: a way that a brand who doesn't race can't say.
Speaker 5: And that's what portion Ferrari knew for a long time.
Speaker 5: Especially for us in the off.
Speaker 3: Road world, this is really important.
Speaker 5: Racing is a fundamental part of our company's business because
Speaker 5: to beat all the great off road brands and to
Speaker 5: establish ourselves now we're two ex cheep sales in the US,
Speaker 5: to keep that going and keep growing the off road brand,
Speaker 5: off road racing into car Baha is where our customers
Speaker 5: will say, hey, that forward has the real deal.
Speaker 3: It's the real deal, it's not a poser product.
Speaker 5: So racing is integral into our credibility as a company.
Speaker 2: And you've obviously got a deep, rich history there and
Speaker 2: you're bringing your software and battery technology those capabilities to
Speaker 2: red Bull racing. But for you, Laurn, this is a
Speaker 2: whole new thing right building the engine. I know you're
Speaker 2: getting a lot of help from Florida. What are they
Speaker 2: helping you with on the fuel side?
Speaker 4: That helping us on many different topics, and at least
Speaker 4: the Flipp's easy is expanding every day.
Speaker 1: But let me give you a couple of practical examples.
Speaker 4: Gym's team have unique advanced manufacturing capabilities that we use
Speaker 4: to produce some of the most critical parts of our engine.
Speaker 4: And not only the able to manufacture this pass for us,
Speaker 4: but also they do it in less time than we
Speaker 4: will do otherwise, and that gives us a crucial You know,
Speaker 4: our businesses is the time to market business. We could
Speaker 4: it a time to raise business. And when we're able
Speaker 4: to manufacture complex components in a short amount of time
Speaker 4: at this incredible level of quality that we are looking for,
Speaker 4: that's a key competit competitive advantage, especially.
Speaker 2: Since I think you've said you gave up some time
Speaker 2: focused on last year's car, so you're in a hurry
Speaker 2: to make sure that this year, this new car, when
Speaker 2: Max gets in it in Bahrain right, that it's a
Speaker 2: winner and not a learning moment. How do you make
Speaker 2: sure that you're winning straight out.
Speaker 1: Of the game. You know you will have to be
Speaker 1: with us a little bit. The sky scale of the
Speaker 1: challenge is monumental.
Speaker 4: We are starting, we have started to design and build
Speaker 4: these engines in what was a field.
Speaker 1: You know.
Speaker 4: We we've made the factory, We've bought the dino, We've
Speaker 4: We've put together an unbelievable group of people and group
Speaker 4: of partners such as GIM.
Speaker 1: And Tys team.
Speaker 4: And it will be foolish a knife to think that
Speaker 4: from the first day you are going to be at
Speaker 4: the same level than people that have been doing it
Speaker 4: for nine years.
Speaker 1: So bear with us.
Speaker 4: It will It will give us a few sleepless nights,
Speaker 4: it will give us a few heads. We feel we
Speaker 4: have the right people, the right tools, the right spirit
Speaker 4: across what red Bull means and what Ford means. Will
Speaker 4: eventually come out off top, but the first few months
Speaker 4: will certainly be full of learnings.
Speaker 2: Jim, what can you bring back from this I guess
Speaker 2: laboratory if you will, to the forward customer here in America,
Speaker 2: because yesterday we saw figures from the Bureau of Labor
Speaker 2: and Statistics that showed prices for the average passenger car
Speaker 2: not forward. But you know, across the industry are up
Speaker 2: more than five hundred dollars. Prices for the average truck
Speaker 2: across the industry are up more than one thousand dollars.
Speaker 3: What can you bring back.
Speaker 2: That you know puts value into those price.
Speaker 6: Increases, Well, Matt, I think Lauren said it really well.
Speaker 6: If there was an initial premise of what those transfer
Speaker 6: technologies would be to help the company. But what we're
Speaker 6: learning working with him over the last several years is
Speaker 6: actually that list is growing and it's more diverse than
Speaker 6: we thought. Of course, we thought it was arrow and
Speaker 6: high discharge batteries.
Speaker 3: For performance hybrids.
Speaker 5: Well, now it turns out performance hybrids are really important
Speaker 5: for the company. Twenty f one fifty is now hybrid sales.
Speaker 5: People are buying it because of pro power on board,
Speaker 5: not just because of efficiency. And every day, honestly, the
Speaker 5: list of things that we can take from the effort
Speaker 5: with or on his team, because the sport is so
Speaker 5: hard and the time pressure is so high, that list
Speaker 5: is getting longer every day. I could give you a
Speaker 5: long list, and most of the value that we're seeing
Speaker 5: on the tech transfer side are things that we didn't
Speaker 5: even have on the list when we started four years ago.
Speaker 5: It's a long list but I would say that the
Speaker 5: real signature is for me is really the software, the
Speaker 5: control software for the hybrid system predictive failure components. These
Speaker 5: are the essence of the new software defined vehicle globally
Speaker 5: to beat China, and they are really good. We need
Speaker 5: these capabilities from Formula one and we can put them
Speaker 5: right into transit van. He can help us with the
Speaker 5: language models and the logic of predictive failure for a
Speaker 5: component on a Formula one race, where you can use
Speaker 5: that same know how hopefully to help our customers in
Speaker 5: a transit know that something's going to break way before
Speaker 5: it breaks.
Speaker 3: And that's the same capability he has to deliver Firmax.
Speaker 5: This is really the cool part of Formula one. It
Speaker 5: is such a high pressure, high tech sport that actually
Speaker 5: the list of value, like lubrication, it's just gonna.
Speaker 3: Keep getting longer.
Speaker 2: Laurent the President of the United States, was with Jim
Speaker 2: a couple of days ago here touring their plants. As
Speaker 2: the US turns more inward, it's interesting that you're participating
Speaker 2: in this sort of global sport, right. We just learned
Speaker 2: of new visa restrictions on people from many nations, including Brazil,
Speaker 2: do you find it harder to get people in to Miami,
Speaker 2: to Las Vegas to Austin. I know there have been
Speaker 2: problems already holding up gear at the border.
Speaker 1: Really, you know, it's not an issue today.
Speaker 4: We are global spot as you have said, we are
Speaker 4: enjoying racing in pretty much every part of the world,
Speaker 4: on nearly every part of the world.
Speaker 1: We have incredible.
Speaker 4: Logistic capabilities, which is also some things that we have
Speaker 4: brunstorming and exchanging with with with Jim and his steam
Speaker 4: and and these teams together with the help of Formula one,
Speaker 4: makes it very, very smooth to go wrong. And we
Speaker 4: were back to back races from the US to the
Speaker 4: opposite side of the globe without without any issue. So
Speaker 4: you know, uh, it's it's a privilege of the sports
Speaker 4: have as a global sport to be able to move
Speaker 4: around very freely.
Speaker 2: Jim, how are your discussions with President Trump? I know
Speaker 2: that you have pointed out in the past that the
Speaker 2: tariffs as they're set up now, as they're designed to
Speaker 2: put you at a disadvantage to somebody, even an American
Speaker 2: auto manufacturer that produces in South.
Speaker 1: Korea or Japan.
Speaker 2: For sure, I know you're going to meet with jameson
Speaker 2: Greer tomorrow in the great state of Ohio.
Speaker 3: Have you had a chance to talking to the President.
Speaker 2: Have you made any progress in getting many carve.
Speaker 3: Outs or really encouraged.
Speaker 5: I mean, look, Ford is the most American car company.
Speaker 5: We produce the most, most hourly workers, we export the most,
Speaker 5: and so the administration has been great to work with.
Speaker 5: They always answer the phone. But there is a long
Speaker 5: list of things we got to work through. I think
Speaker 5: we've made progress on mitigating some of the tariffs, but
Speaker 5: we have more work to do. For US, we have
Speaker 5: a high exposure aluminum, for example. The EPA changes are
Speaker 5: really welcome, frankly, and we're seeing that play out really
Speaker 5: in our business. Part of the reasons why our valuation
Speaker 5: is increasing is because people understand we can build more
Speaker 5: profitable vehicles now and that's more employment in the US.
Speaker 3: But there's a long list.
Speaker 5: We got the USMCA coming up, very important negotiation for Ford.
Speaker 3: We need to change USMCA. But we built our entire vehicle.
Speaker 5: Business as an industry between Canada and Mexico and the US.
Speaker 3: We have to get this revised, but it will be
Speaker 3: very important.
Speaker 5: I think continue to work with administration tariffs, How we
Speaker 5: handle the China. You know, if you look at what's
Speaker 5: happening in Europe right now in the UK, the Chinese
Speaker 5: are now quickly almost ten percent of the marketplace, and
Speaker 5: electric cars even higher. They pose a lot of threat
Speaker 5: to labor locally. They have huge subsidies from the government
Speaker 5: that they're exporting. As a country, we need to decide
Speaker 5: how what is a fair playing field from a cost
Speaker 5: how do we handle you know, these vehicles. If we're
Speaker 5: scared of a balloon, you can imagine a car with
Speaker 5: ten cameras that can drive itself. You know, these are
Speaker 5: incredibly sophisticated technologies, and when we deploy that in China,
Speaker 5: it has to be approved by their defense department because
Speaker 5: you know, those vehicles can be guided into all sorts
Speaker 5: of things.
Speaker 3: Well, we need the same. You know.
Speaker 5: We have a good starting point for that philosophy of
Speaker 5: the ITC of the vehicle, the digital footprint. Now we
Speaker 5: have to, you know, make sense of that for the
Speaker 5: China threat. I know that the President talked about that
Speaker 5: during his visit at the Economic Club.
Speaker 3: How do we handle Chinese cars? Now? His personal opinion
Speaker 3: was we should let them into the US.
Speaker 5: But but maybe you know, I think we need to
Speaker 5: work through that as a as a company and as
Speaker 5: as a country. I think there's always a lot of
Speaker 5: big topics for the car industry because it's so important
Speaker 5: for our for our country.
Speaker 2: Well, we'll be covering all of those here uh in
Speaker 2: Detroit with you Jim and you Laurent. Thank you so
Speaker 2: much for joining us.