Exclusive: Ford CEO Jim Farley on remaking the Blue Oval

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AEX QA e1632904711220Exclusive – Ford CEO Jim Farley talks about his racing, Ford’s future and why Henry Ford wouldn’t want to be working with Volkswagen

There are few people in the automotive world that live and breathe cars as much as Jim Farley. He’s been CEO of Ford for a year, but as well as running one of the biggest car companies in the world, he’s a racer – and a proper racer at that, describing being behind the wheel as his ‘yoga’! Automotive Daily caught up with him at the recent Goodwood Revival to talk about his love of cars and the future of Ford.

Q. Tell us about your love of racing and tell us about the car.

A. It’s a GT40, and I’ve had it for, I don’t know, five or six years, maybe longer. To me it’s the ultimate Ford race car. I raced a Cobra for a long time, and I liked that. And then I got a Lola 289, like a late 70s sports racer, and I loved that. But the GT40 is the ultimate Ford, so when I had the resources, I bought it, at a stretch.

I race it pretty much whenever I can – places like Spa for the six hours – that’s my big race. And I usually race with Eric van de Poele; we’re a good team, we’re about the same age, but he’s won Spa a bunch of times. I’m not so terrible so we’re very competitive together, and it’s a lot of fun.

Q. How do you rate yourself as a driver?

A. It depends on the segment, but I’d say, yeah, I’m pretty competitive. I don’t know, top third of any race, sometimes. In the Cobras, I always pretty much finish first or second in the U.S., not so much over here. This [Goodwood] is a very difficult track if you don’t spend time on it.

Q. So racing is your passion and not part of the job?

A. Yeah, it’s my hobby. Definitely. I’d be doing this no matter what I do. Actually, being the head of the company makes it actually more difficult to do this. Timewise, for sure. But also I have to be careful. I don’t want to hurt myself. And also I don’t want to be that guy, the guy who passes someone on the straightaway because ‘he has a Ford special engine’, or that guy who drives too aggressively. So I have to be more careful on starts, especially, than others. I just don’t have the freedoms, but I’m still so thankful to do this. To me, it’s my yoga. It’s a little expensive, but I feel so much better tonight than I did when I got in that car.

Q. What’s special about Goodwood?

A. Goodwood is a very tough track. There’s no other racetrack in the world you can go to train at to be fast here. And the ambience is second to none. The diversity of the people and the cars here and the quality, it’s just quality. That’s what makes it, quality. It is the top quality event in the world.

Q. Let’s go back a year when you got that call asking you to become CEO of Ford. How did that go?

A. Actually, it’s a long process. With a public company like Ford, the board’s main job is to pick a CEO, so it’s a quite lengthy process; it takes several months. I don’t want to go into the details, but it’s a very thorough process – there are no surprises. It’s like dating for 10 years before you get married!

So I had a Zoom call and the whole board was there. And they’d just said, “Jim, we’re honoured to offer you the opportunity to be the president and CEO of Ford Motor Company.”

Q. Is it the job you always wanted?

A. I feel like I trained for this job my whole life, all the mistakes I’ve made in my life led up to this job.

My grandfather was an hourly worker for the company at the Rouge plant. I was at Toyota for a long time and I was not kind of allowed home because I worked for a Japanese company, and my dad was in the U.S. military. It was a tough choice to go to Toyota, and when I came back to Ford, my love of the company was up here, but I was an outsider. So it’s been quite an unusual experience for the last more than 10 years at the company, kind of integrating, but still being that challenger who disrupts things.

Q. Did your time at Toyota make you a better leader?

A. Oh, for sure. I could have never done my job well without working there. No way. I went to Toyota Europe when we were 100,000 units. When I left, we were 900,000 units. We bought every one of our distributors. We developed great cars. We had a plant in Valencia that we built. We developed a design studio in the south of France. We built the whole business in Europe, and we made lots of mistakes.

It’s the same with Lexus, there were only 10 of us when we started. And we were way behind Infiniti and Acura, five years behind. So we had to catch up.

I’ve always been into kind of challenger projects. If someone said, “Hey, this is a high-risk project. You probably won’t get ahead. You probably won’t get paid very much, but you could change the world,” I’m like, “I’m in. That’s me.” I volunteered for every one of those at Toyota.

Q. So you’ve the CEO at Ford at a great time both in terms of the challenges ahead and the change ahead. What’s your biggest challenge today?

A. I believe, that this period of time at Ford, we haven’t had the chance to transform the company since Henry Ford scaled the Model T. We could literally remake the entire company and five years from now, it won’t look much like the one that you and I grew up with. And so, when you ask me that question, I think about so many things. In the short term, for sure, it’s supply, but everyone’s dealing with the supply shock, the COVID-related Southeast Asia component restrictions.

So for me, the biggest challenge isn’t the most immediate challenge. The biggest challenge, for me, is educating myself about the transformation we have to make so that I can direct the company precisely and specifically. So this is a good example. You’re recording on this phone. In 2007, Motorola, Nokia, and Blackberry owned 95% of the mobile devices. Customers used the phone to make phone calls. Well, Samsung and Apple came along, and they invested in an embedded system with a camera, a gyro, a speaker, all sorts of things. They invested in that embedded system, and the software that controls that embedded system, that was their competitive advantage.

Our vehicles are used to get from point A to point B mostly. That’s similar to making a phone call in 2007. The cars now will have embedded systems that will allow you to precondition your house before you get there, with your light and your heating. You may be able to sit in the back and go to sleep with the level three autonomy system. They’re going to be used for completely different things than point A to point B. To do that, you need lots of new talent, embedded systems, software talent, customer experience, design people from Disney, who are going to paint those experiences. And so I have to learn before the company about that transition and enable it through talent, money, resources, and a specific plan. That’s my biggest challenge.

REVIVAL2021 NickDungan 3659Q. How much of a challenge is it to let your customers know what’s coming because your customers still see you as an A to B company?

A. Customers are completely rational, and they completely make sense. For me, it’s on us to change it. And then the customers will figure it out. You build the device. You start over-the-air updating with daily experiences. Oh, my horn can now sound like Rodney Dangerfield. Oh, when I back up, I can sound like the Jetsons. And you change the car every day. People go, “Wow. I didn’t even think I needed that.”

When we did Pro Power on Board with the F-150 Lightning, we said: “This is an electric truck, but you can power your house for three days.” The people in Texas, who have been out of power for two weeks, they’re like: “Are you kidding me? That truck could run my house. Oh yeah, I’m in.”

Q. One of your predecessors questioned whether Ford is actually a car company anymore, whether it’s a mobility company.

A. What am I doing here [at Goodwood]? I’m a car guy. We’re a car company. Yes. We’re in the devices business. It’s just that devices are changing: probably, some people will rent a ride. We’re going to be in the car business, but it’s going to feel like the car and services business, not just the cars.

I tell people at the company, “You will look back, and you will say, ‘I can’t believe I was so lucky to be involved in leading the company during this time’.” “Because I think Henry Ford would have been totally bored for the last 50 years. He is going to be like, “this is unbelievable, what’s happening”.

Q. You’ve got a lot of personal credit for one particular hire in the press, Doug Field. What’s he bringing to Ford?

A. Doug is a very, very, very special person in our industry. You should talk to him. He went to Segway and engineered the Segway at 22 years old. Then he went to Apple and engineered the whole iOS software system for all their devices, including Mac. Then he went from there to become the chief engineer at Tesla. Worked for five years for Elon. Engineered the whole new electric architecture, the model three, in-sourced it all. He wrote all the software to completely control the vehicle, every aspect of the vehicle. And then, three years ago he went to Apple.

So when I look at what we have to do as a company, I needed a technical person who could bridge what we do really well, large scale manufacturing and traditional component sourcing. I needed a technical leader, who could bring this into our amazing vehicles.

We aren’t interested in just being a point A to point B Prius, Tesla company. That’s not us. We make Transits. We make RSs. We make Broncos, Mustangs, Pumas. That’s what we do, passion products. So I needed someone to bring that technology to the passion products so we can blow people’s minds.

As soon as I started talking to Doug, I was like: “What do I have to do? What do I have to do? I don’t care. If I need to pick you up every Monday in California, and fly you to Detroit myself, I will do that, Doug.” And he tracks a GT3 Porsche and works on a 1926 Packard himself – this is a car guy but he is also a technologist.

And so we need people like Doug, and we need consumer-facing software people. We need to go into e-commerce, sell our parts on e-commerce, present our vehicles through direct e-commerce. For some customers, they’ll want that. So we need e-commerce specialists. That’s why I went to get Mike from Home Depot and Lowe’s. He built the best e-commerce platform in the U.S., in a traditional company. I don’t want to get technology people who think that car people don’t know what they’re doing.

REVIVAL2021 NickDungan 1256Q. You mentioned Henry Ford a while ago. What would Henry Ford say about you guys using technology from Volkswagen?

A. I think he would say, “why don’t we do that ourselves?” And I think he would say, “by the way, you should do it by yourself, and you need to move at ten times the speed you are”.

He’d have a lot of skunk works going on and he’d have all sorts of weird prototypes going on. He would love that, but he would not like us working with someone else.

On the other hand, in Europe, for passenger cars, our center of gravity for our new passion products are bigger. They’re Broncos. They’re Explorers. They’re Transits. So Europe can take the lead for our global battery electric platform for vans. The U.S. can take it for pickups. But we’re not a French or a German company or a Chinese company, maybe more like a Chinese company. The center of gravity of our electric platform is going to be two to three row passion products, more like an Audi kind of dimensionally. So we need an electric platform that’s smaller.

Q. Is Volkswagen’s MEB platform small enough to replace the Fiesta?

A. I think, yes. Overall length wise, yes. But interior space wise, it’ll be more like a C+ car, a Focus to an even Mondeo size car. I’m not going to get into our specifics, but our brand is…  think about RSs. Think about what are the iconic passion car name plates for Ford? The ones that people have tattoos of. What are they? RS, ST… those are the kinds of products that we’re going to do. That’s us.

Q. Are you a fan of electric cars?

A. I was hesitant, I would say, but it’s a better car, especially for commercial customers. They can’t afford any downtime. It’s got 40% less moving parts. It takes 80% of the man hours to make. You have a whole interior upgrade, in terms of size, because of the re-engineering of the front of the car. The tyres and wheels can be as big as they need to be. You can put them at the corners, which I think humans just like. So I think all those things can be facilitated with electric. The problem is electric cars came out as sewing machines. They’re rational, affordable. And we haven’t really seen the passion projects yet, but they’re coming, like Rivian. They’re coming.

Q. Was there a time when Ford thought, we just can’t stay Europe, it’s just not for us?

A. Yeah. There were lots of times when we had to consciously decide to stay in Europe. The financial markets would have applauded us to do what GM did, and I don’t mind shrinking around stuff that doesn’t make money, but why would we ever give up the Transit business? We would be insane. We had to sort out the passenger cars. And we needed to put more resource behind the commercial vehicles – they were kind of selling themselves. And with the Ranger and Transit, the last version, we really kind of woke up again and fell in love with the commercial vehicle business, like we did in the 70s – now it’s really serious. We all looked at it and said, “there’s a really profitable Ford inside this company that’s not healthy”. So Stewart [Rowley, Ford of Europe boss] and the team got serious, and we bet on Europe. We bet to stay here. And was me, as an American, being head of Ford of Europe a factor in that? Yeah. Why? Because the people walking around this paddock, they have more sensibility of excellence in automotive engineering than almost any other market. And I don’t want to leave a market, where the customers are the hardest to please.

Q. We all talk about ACES, Autonomous Connected Electric and Sharing. Is autonomous and sharing being kicked down the road a little bit now due to COVID?

A. I think COVID changed the math for customers – a lot. I think the brutality of the middle class’s financial situation, the brutality of owning an automobile that you only use 5% of the time, the brutality of the new emissions requirements of electric being so expensive, it’s just the math is getting harder for a lot of people. And so it’s up to us to design a vehicle and an experience that really does well. And I think our commercial excellence is a huge advantage to that kind of rent-by-the-mile business because those vehicles are very much commercial vehicles.

They happen to be not carrying boxes or plumbing equipment. They’re carrying people. But the vehicle with 300,000-mile (480,000-kilometre) durability, a hundred percent uptime, making them still aspirational but incredibly functional and upgradable… Those vehicles probably may get remade three times in their life, like a 737. And our excellence in commercial, with a lot of old Transit vans that have been remade three or four times, will help. So I actually think the market’s big and moving into our commercial model, that A to B business.

You meet someone who has five vans and is in the HVAC business and goes into London every day with the Transit, that Transit might as well be a Ford GT: it’s their business, they have their whole brand on the side. They’re not thinking about being a plumber or whatever, they’re thinking about helping their community, making the community run. They have a very noble view of their occupation. And that van is their advertising.

Q. Last question, Jim. When you finish racing here, what are you going to watch?

A. Oh, Minis. No doubt. The Mini race: you got Martin Brundle You got Andy Priaulx. There are so many professional guys in that race. I mean, I can’t wait for this interview to end so I can go watch it.

Steve Fowler

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