Ford Motor Co.
6670b16bca87d73e01568732 F Jim Farley

Ford CEO on Clearer EV Priorities, Supplier Changes and a ‘New Global Standard of Fitness’

June 19, 2024
Jim Farley spoke recently with two Bernstein analysts about cost controls and how Ford’s skunkworks’ need to do things differently ‘was actually not something to celebrate.’

Ford Motor Co. President and CEO Jim Farley hasn’t been shy about his team’s need to discard old ways and fundamentally reshape its design and manufacturing processes so that it can effectively compete in a world where electric vehicles will be the norm. He has talked about a California-based skunkworks team that’s designing Ford’s next-generation platforms, outlined plans to roll out more (relatively) small vehicles and set a one-year profitability hurdle for new models.

With those ideas as a backdrop, Farley recently went to Bernstein’s 40th Annual Strategic Decisions Conference for a conversation with analysts Toni Sacconaghi and Daniel Roeska. What emerged in the early part of that discussion provided as concise a summary of the state of the EV market in 2024 as we’ve seen as well as Farley’s strategic reactions to how the market has developed.

Excerpted (and lightly edited) here are parts of the chat that focused on Ford’s industrial fitness and its relationships—now and in the future—with suppliers as well as the role of Chinese car makers and the growing importance of software in automotive manufacturing. Farley’s thoughts here help put into context some of the forces Ford, General Motors Corp. and market leader Tesla Inc. are confronting as well as the struggles of smaller automotive manufacturers still looking to make a definitive breakthrough.

On what has changed over the past year in Farley’s approach to running Ford

"I come here at this moment in time […] much clearer about our executional priorities and the way we need to make our way through this successfully to be a great company. […] A natural law is emerging in attached technology, like the software and attached services that comes from tech, which was new to us—the natural law […] of cost. You're going to hear every CEO talk about the EV transition and all they’re going to talk to you about is cost—or that’s what they should talk about. So strategically, that requires a legacy company like Ford to completely disrupt the engineering, supply chain and manufacturing standards.

And so it turns out we were maybe smarter than we actually intended to be with our skunkworks because the way they’re working is completely foreign to the standard operating procedures of Ford. That was actually not something to celebrate. It was actually required for fitness, for cost, to use a completely different supply chain, to totally change the design standards for our EV components, to go vertically integrate and make the sourcing decisions to a lower part of the supply chain.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas JournalT&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.

With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.

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