WEBVTT - Keith Naughton on Ford (Radio)

0:00:00.040 --> 0:00:02.800
<v Speaker 1>As we've been reporting today, Ford is said to be

0:00:02.840 --> 0:00:05.760
<v Speaker 1>preparing to cut as many as eight thousand jobs in

0:00:05.760 --> 0:00:08.440
<v Speaker 1>the coming weeks. We told the automakers trying to boost

0:00:08.440 --> 0:00:12.000
<v Speaker 1>profits to fund its investments in electric vehicles. Joining us

0:00:12.000 --> 0:00:15.080
<v Speaker 1>now with more is Keith Norton. He's Bloomberg Auto reported

0:00:15.160 --> 0:00:18.480
<v Speaker 1>in Detroit. So, Keith, where is the acts going to

0:00:18.560 --> 0:00:23.439
<v Speaker 1>fall for Ford? Well, it will be broadly with salaried workers,

0:00:23.520 --> 0:00:27.880
<v Speaker 1>not the factory workers, but the white color folks, and

0:00:27.960 --> 0:00:30.040
<v Speaker 1>much of it will come from this new division that

0:00:30.760 --> 0:00:34.160
<v Speaker 1>Ford created called Ford Blue, which is their internal combustion

0:00:34.200 --> 0:00:39.559
<v Speaker 1>engine vehicles, the traditional gas burners. UM CEO Jim Farley

0:00:39.600 --> 0:00:44.440
<v Speaker 1>wants to lower costs by three billion, and he wants

0:00:45.040 --> 0:00:48.000
<v Speaker 1>his traditional vehicles to make more money so they can

0:00:48.040 --> 0:00:52.720
<v Speaker 1>fund their very large electric vehicle ambitions. So, Keith, if

0:00:52.760 --> 0:00:54.880
<v Speaker 1>you look at eight thousand jobs, do we know how

0:00:54.920 --> 0:00:57.600
<v Speaker 1>that may translate into a dollar amount of me what

0:00:57.640 --> 0:01:00.920
<v Speaker 1>would the cost savings be on a job reduction of

0:01:00.960 --> 0:01:04.200
<v Speaker 1>that magnitude? You know, it'll be a big chunk of

0:01:04.200 --> 0:01:06.920
<v Speaker 1>that three billion that they're going after for sure. That

0:01:07.080 --> 0:01:09.800
<v Speaker 1>is the quickest way to you know, hit a cost

0:01:10.680 --> 0:01:14.520
<v Speaker 1>target that large is to eliminate people and just you know,

0:01:14.600 --> 0:01:19.399
<v Speaker 1>to put it in context, Ford has US salary workers.

0:01:19.400 --> 0:01:23.240
<v Speaker 1>It has over salary workers in North America. This is

0:01:23.240 --> 0:01:25.360
<v Speaker 1>where most of these cuts will be coming. That's a

0:01:25.360 --> 0:01:29.880
<v Speaker 1>big chunk of the salary workforce. So has for progressing

0:01:29.880 --> 0:01:33.560
<v Speaker 1>in this pivot from internal combustion engines to electric vehicles.

0:01:34.760 --> 0:01:37.399
<v Speaker 1>So far, its first couple of models have been very promising.

0:01:37.680 --> 0:01:40.080
<v Speaker 1>The first one that came out last year was the

0:01:40.120 --> 0:01:44.080
<v Speaker 1>electric Mustang Mache, which is kind of a crossover sport

0:01:44.160 --> 0:01:48.400
<v Speaker 1>utility vehicle that has sold very well. UM. It put

0:01:48.680 --> 0:01:52.520
<v Speaker 1>forward second a distant second behind Tesla in the United

0:01:52.560 --> 0:01:55.680
<v Speaker 1>States last year, where they remain through the first half

0:01:55.680 --> 0:01:58.920
<v Speaker 1>of this year. UM. And then the second big e

0:01:59.040 --> 0:02:02.880
<v Speaker 1>V they have is uh F one fifty lightning pickup truck,

0:02:02.960 --> 0:02:07.800
<v Speaker 1>which just debuted in May. They had two hundred thousand

0:02:07.880 --> 0:02:11.840
<v Speaker 1>pre reservations for that. UM they have very high demand.

0:02:11.960 --> 0:02:15.560
<v Speaker 1>Their their EV sales were up year over year in

0:02:15.639 --> 0:02:19.520
<v Speaker 1>June by seventy six percent. Admittedly, ak lood base, you know,

0:02:19.600 --> 0:02:23.600
<v Speaker 1>it's it's a different UM magnitude altogether than where test

0:02:23.760 --> 0:02:27.200
<v Speaker 1>was at right now. But Jim Farley, the CEO, says

0:02:27.240 --> 0:02:29.839
<v Speaker 1>he wants to catch them and surpass them. Yeah. When

0:02:29.840 --> 0:02:32.799
<v Speaker 1>I think of Ford Trucks, I think the commercial division two.

0:02:32.840 --> 0:02:35.040
<v Speaker 1>I mean, that's a pretty big part of their business.

0:02:35.360 --> 0:02:37.680
<v Speaker 1>Do you think can we see a path for Ford

0:02:37.720 --> 0:02:40.440
<v Speaker 1>to kind of move into e V trucks in the

0:02:40.480 --> 0:02:43.120
<v Speaker 1>near term, so it's not just focused on kind of

0:02:43.120 --> 0:02:48.359
<v Speaker 1>the consumer. Absolutely, that's a big part of their strategy

0:02:48.360 --> 0:02:53.560
<v Speaker 1>because Ford is a leader in commercial vehicles far and away,

0:02:53.639 --> 0:02:57.000
<v Speaker 1>leader in things like pickup trucks and vans, and that's

0:02:57.040 --> 0:03:00.720
<v Speaker 1>its third electric vehicle. It's transit van also now comes

0:03:00.760 --> 0:03:05.080
<v Speaker 1>in an electrified version. The ideas they're electrifying the vehicles

0:03:05.320 --> 0:03:10.040
<v Speaker 1>are already strong sellers for them and um and they

0:03:10.080 --> 0:03:11.920
<v Speaker 1>feel that gives them a built in market as they

0:03:12.000 --> 0:03:14.560
<v Speaker 1>roll them out. We have from a tast a little

0:03:14.560 --> 0:03:17.560
<v Speaker 1>earlier today, and one of the points that was made

0:03:17.600 --> 0:03:20.320
<v Speaker 1>on that coal was that it's done okay navigating round

0:03:20.360 --> 0:03:24.600
<v Speaker 1>supply chain difficulties. Has Ford been coping with the supply

0:03:24.680 --> 0:03:28.280
<v Speaker 1>chain issues? You know, it has waxed and wayne for them.

0:03:28.520 --> 0:03:30.720
<v Speaker 1>They were hit very hard last year and then the

0:03:30.760 --> 0:03:34.760
<v Speaker 1>first quarter of this year, particularly in their cash cow,

0:03:34.920 --> 0:03:37.560
<v Speaker 1>the F series pickup truck, which makes them most of

0:03:37.600 --> 0:03:41.480
<v Speaker 1>their money. But then they did better in the second quarter.

0:03:41.560 --> 0:03:44.440
<v Speaker 1>In the United States. They actually had a small one

0:03:44.480 --> 0:03:47.680
<v Speaker 1>point eight percent sales improvement in the second quarter and

0:03:47.760 --> 0:03:51.800
<v Speaker 1>a very strong June. So um, they seem to be

0:03:51.960 --> 0:03:55.240
<v Speaker 1>improving the situation, but like the rest of the industry,

0:03:55.280 --> 0:03:57.840
<v Speaker 1>they won't be out of this supply shortage for a

0:03:57.880 --> 0:03:59.840
<v Speaker 1>long time to come. Yeah, and that's really been showing

0:04:00.040 --> 0:04:02.680
<v Speaker 1>up mostly on the semiconductor side, but I'm curious on

0:04:02.720 --> 0:04:06.760
<v Speaker 1>the battery side. Is Forward partnering with anyone to make

0:04:06.920 --> 0:04:11.360
<v Speaker 1>lithium batteries that would be used in these evs? Yeah,

0:04:11.400 --> 0:04:14.000
<v Speaker 1>so they are. They have a partnership with sk Innovation

0:04:14.240 --> 0:04:18.200
<v Speaker 1>of South Korea. They're building three battery plants in Tennessee

0:04:18.200 --> 0:04:22.920
<v Speaker 1>and Kentucky and the new Electric Vehicle fuck factory in Tennessee,

0:04:23.360 --> 0:04:26.000
<v Speaker 1>and that's an eleven point four billion dollar project, those

0:04:26.040 --> 0:04:29.520
<v Speaker 1>four factories. So that that's the way they've been doing it.

0:04:29.600 --> 0:04:33.000
<v Speaker 1>Bloom Bigger is also reported that they might begin receiving

0:04:33.000 --> 0:04:38.839
<v Speaker 1>batteries from atl the Chinese battery suppliers, So that's a

0:04:38.960 --> 0:04:41.640
<v Speaker 1>that's a big part of the e V emerging e

0:04:41.760 --> 0:04:44.599
<v Speaker 1>V races who can lay their hands on the most

0:04:44.640 --> 0:04:47.960
<v Speaker 1>battery supply, So how's the outlook looking for forward for

0:04:47.960 --> 0:04:52.080
<v Speaker 1>the second half? You know, pretty good. As I said,

0:04:52.120 --> 0:04:57.000
<v Speaker 1>the chip supply situation is improving. They still have very

0:04:57.120 --> 0:05:01.719
<v Speaker 1>strong selling traditional U internal combustion engine vehicles like the

0:05:01.760 --> 0:05:05.400
<v Speaker 1>Bronco SUV UH and they have waiting lists for those

0:05:05.440 --> 0:05:08.600
<v Speaker 1>models so um and they have focused to their efforts

0:05:08.720 --> 0:05:12.279
<v Speaker 1>on the higher profit vehicles SUVs and trucks, and that

0:05:12.480 --> 0:05:14.520
<v Speaker 1>is turning out to be a good strategy for them.

0:05:14.520 --> 0:05:16.440
<v Speaker 1>What do we know about the way that Ford thinks

0:05:16.480 --> 0:05:20.200
<v Speaker 1>about incentive programs that may be sponsored by the government,

0:05:20.279 --> 0:05:23.200
<v Speaker 1>is that does that get baked into their projections? I mean,

0:05:23.240 --> 0:05:26.000
<v Speaker 1>are they looking at what Washington is doing to try

0:05:26.000 --> 0:05:30.039
<v Speaker 1>to encourage the adoption of more electric vehicles? For sure?

0:05:30.160 --> 0:05:35.600
<v Speaker 1>And they definitely support things like the tax credit that

0:05:35.680 --> 0:05:38.200
<v Speaker 1>you get pro buying an e V so so absolutely

0:05:38.240 --> 0:05:40.760
<v Speaker 1>they support that. They feel the government has to play

0:05:40.760 --> 0:05:43.640
<v Speaker 1>a role in trying to nurture the market and also

0:05:44.120 --> 0:05:48.320
<v Speaker 1>in trying to establish a charging infrastructure in this country.

0:05:48.800 --> 0:05:50.400
<v Speaker 1>You know, if you look at a five year chat

0:05:50.720 --> 0:05:55.200
<v Speaker 1>of folds US, it's going sideways or really it's up

0:05:55.240 --> 0:05:57.800
<v Speaker 1>eight percent in the past five years. I mean, what

0:05:57.920 --> 0:05:59.640
<v Speaker 1>needs to happen to break it out of this trading

0:05:59.720 --> 0:06:04.320
<v Speaker 1>range is e vs. The onst to this. Yeah, if

0:06:04.320 --> 0:06:07.680
<v Speaker 1>you look at a more narrow range. Since Jim Farley

0:06:07.800 --> 0:06:12.720
<v Speaker 1>became CEO in October of the stock has has been

0:06:12.800 --> 0:06:14.600
<v Speaker 1>up that more than doubled last year. It was the

0:06:14.640 --> 0:06:18.320
<v Speaker 1>biggest gainer among all automakers last year. This year it

0:06:18.400 --> 0:06:23.359
<v Speaker 1>has been down you know, almost um as, which is

0:06:23.360 --> 0:06:26.520
<v Speaker 1>more than the s course, but it's also part of

0:06:26.560 --> 0:06:30.560
<v Speaker 1>the whole sector being down, including players like Tesla, because

0:06:30.600 --> 0:06:35.840
<v Speaker 1>of concerns over inflation and the supply snarls that have really,

0:06:36.120 --> 0:06:39.839
<v Speaker 1>um you know, bedeviled the industry. So it kind of

0:06:39.880 --> 0:06:43.159
<v Speaker 1>waxes in Waynes. It certainly is down at the moment.

0:06:44.320 --> 0:06:46.320
<v Speaker 1>Keith cud stuff, thank you so much for being with us.

0:06:46.600 --> 0:06:49.960
<v Speaker 1>Keith not in Bloomberg Auto reporter in Detroit talking about

0:06:50.000 --> 0:06:52.400
<v Speaker 1>the news has broke today. Ford Motor preparing to cut

0:06:52.400 --> 0:06:54.600
<v Speaker 1>as many as eight thousand jobs in the coming week.

0:06:54.640 --> 0:06:58.480
<v Speaker 1>They're trying to raise some money, uh well, to basically

0:06:58.560 --> 0:07:01.160
<v Speaker 1>fund their investment in the electric vehicles