I'm so excited to be in the car business now. The revenue pressure from the Chinese and Latin America, Southeast Asia, we have never had a fight like this and it will be a very exciting fight. I'm very proud to be from Argentina. I miss the food and the beef. Oh, it was a difficult story. My main job as a husband and a father. She said, I saw your interview in Argentina. You didn't speak so well.
Good afternoon, Mr. Farley. It's a great pleasure for me to have this opportunity.
Your father, James Duncan Farley, lived and worked during 15 years in Argentina. Actually, there is a sign on the local branch of Citibank with his name on it. How do you feel about this?
I'm very proud to be from Argentina. I'm very proud that he worked here, that he built a good business. And my father's heart once he came to Argentina never left for the rest of his life. This was the most important part of his life here. So how do I feel? I'm very happy today to be with you here in BA, in Pacheco, talking about Ford with my own path, different than his, in the land of my birthplace. This is a sign that's at Citibank.
Yes. And how was his experience and what did he tell you about his experience in Argentina?
He came here after World War II as a naval officer. He fought very hard in the war. He went to college after, learned Spanish. He came here knowing nothing and this was a garden of Eden for him. It was a different time. Peron's Argentina was quite different, or maybe the same as well, and he considered it a kind of beautiful period of his life. And I think we were all very proud to be from here. But after that things got more complicated and I couldn't come back.
And how many years did you live in Argentina?
Good. I have some very funny memories going to school on a donkey cart. And I remember the weather. I remember going by the pink house. I remember how beautiful the city was. I remember the lompos. Mate tea. Meeting the gauchos for the first time. Watching polo. Watching horse racing. It was a beautiful time.
That's really fascinating. I'd like to start with your personal history. This used to be your house when you were born. This is your church where you were baptized.
Yes. That's right. Yes. We lived in the same Santa Cedro, the same neighborhood. And we had a kind of idyllic life. Yes. When we moved back to the US, it was quite different. Cold and people not so nice and they had vegetables and I miss the food and the beef. Argentina is one of the most special places on the planet and once you live here it's hard to leave.
You also have Ford in your blood. Your grandfather also worked at the company. What did he tell you about it?
He said it was hard. He said, 'Go to college. You don't want my life. I was that factory worker. Jim, you don't want my life. Go to school. Get an education. You don't want to work as hard as I did. It's dangerous. The money's good, but it's not great. I worked hard for your mother to go to university. Make sure that you pay off my effort.' That's what he said.
There are also other Argentinian ties. For example nowadays you live in Detroit and what is your experience as a volunteer at the Pope Francis Center in Detroit?
Well, like all Argentinians who are Roman Catholic like me, Pope Francis was a... well, it was an unbelievable day to think of an Argentinian being a pope. And I think in our family, like most Catholic families, if you are lucky, like I'm lucky, you have to give back. Pope Francis is for homeless people in Detroit. Homeless people in Detroit do not sleep on the streets. They do it because they want to. And to solve their complicated life problems, mental health, addiction, you have to treat the whole person. So we created a transition center to treat drug addiction, faith, spirituality, mental health, to try to get the whole person right so they can re-enter society. And I think this is the spirit of Pope Francis. It's why we were all proud of him.
He also drove a Ford Focus.
Yes. Didn't know that. Yes. When he drove, he was quite a simple guy. He was the first person to appoint a woman as the head of the Vatican. He also drove his very simple Ford Focus in the Vatican. Of course, he could drive a Ferrari or fancy Pope mobile, but he preferred a simple Focus because he's like us, one of the people.
Speaking on your career path, before joining Ford in 2007, you were vice president of Lexus and also held an important position at Toyota. How different is it to work for an American company versus a Japanese one?
Completely different. Same business, different culture. Totally different. Toyota is a lean culture. Like if you're an executive, you know exactly how much more you make than the factory worker. Ford is a kind of more hierarchical, traditional Western company. It's not better or worse. It's just different. But there's a lot to learn from Toyota. There's a lot to learn from the Chinese, a lot to learn from all the global competitors. But for me, coming to Ford was like coming back to Argentina, coming home.
I know you are also involved with other iconic brands. Are you a fan of motorcycles? And how has your experience been as part of the board of directors at Harley-Davidson?
I think Harley is similar to Ford, going through a huge transformation. It's also a Midwestern company in the middle of the US. And I think it has the same ethos. Milwaukee and Detroit are tough, hardworking people. Harley-Davidson, like Ford, is a global icon, but they also have to change. They can't stay the same. They can't live in the past. They have to live in the future. Both companies have different transformations. But I found the experience of being a board member and being a CEO to be also very healthy as a leader to understand how does the board look at me as a CEO. It's a good experience.
Let's talk about Ford transformation. Did you imagine being in this position as the global CEO when you began?
No. Not at all. Well, my ambition was very simple when I began the business. I wanted to be head of product planning to work on great products. But for the last 20 years, it's not been about the product. Of course, it's always about the product, but it's about the people now. But when I joined the company, I had the very wholesome idea. I was not ambitious to get a position. I just wanted to make great cars. That's the only reason why I came to the car business. In fact, I was worried that my love of cars would make me not a good employee because I was too emotional. They'd say, 'Oh, you work on a minivan.' MPV. I don't want to work on MPV. But I was surprised myself. I like the MPV more than sports car, I think. But as time went on, we all change. And what I found is I liked more complex problems than I thought. And I did like getting in the middle of difficult situations.
You have lots of difficult situations to talk about. From the very beginning, you made a huge change in Ford with the Fiesta strategy. It was much more than the launch of a new model. What was the behind-the-scenes strategy?
Well, for many years in our home market in the US, Ford had never been successful with small cars. So when I came from Toyota, obviously the heart and soul of Toyota was Corolla and I also launched the Yaris in Europe. So I knew a lot about the small car business. And it was very exciting for us to bring the Fiesta, essentially engineered for Western Europe, to the US. It's a small B car that you see here in BA everywhere. It's kind of a strange car, but it was a spiritual moment for Ford to be a full-line manufacturer. But I learned so much from that, because maybe that was a mistake. And it wasn't a mistake to try, but our costs were not competitive with Toyota and Hyundai Kia. And in the end, we have to change to Broncos and pickup trucks. It's a very similar story here in Argentina. We had this ambition to be full line, like the Model T company, to have a very democratic product. But we also found that that made the business almost impossible because we didn't have a cost advantage. So similar to Argentina and Latin America, in the US we had to restructure the business. It's very difficult, and now we're very successful in Latin America. I'm very proud of Argentina, but it required a lot of pain, a lot of difficulty.
I think at your beginning at Ford, that campaign, the Fiesta campaign, although you changed the strategy afterwards, was really groundbreaking in terms of marketing.
Why did you choose YouTubers for the main ambassadors of that strategy?
I think we realized it was a little bit early for social media but it was coming. We thought, why doesn't other people market the company, not us? Get the ambassadors, which now in social is kind of the normal marketing model. But as you say back then 15 years ago, no one had brand ambassadors, maybe only for luxury cars. No one. But we had the entry car and we went to brand ambassadors and they sold the Fiesta for us. It was a very powerful moment for Ford. Also, we avoided bankruptcy. So many people were looking at Ford for the first time. And that ambassador program I think was a marketing breakthrough.
And do you still believe in influencers and social networks as game changers?
Yes. Yes. Why? Especially for our strategy with emotional products, because I like to say we don't make shampoo. We make emotional things, cars. And for emotion, when someone who you trust says you should look at the Ford Ranger Raptor, maybe you will more than if you see a TV commercial. Everyone is so skeptical now. Really skeptical. And for good reason maybe. But a brand ambassador you trust as a customer is more powerful than the company.
I also know you've been on the cover of Bloomberg Businessweek. You are driving this car and challenging Elon Musk. What do you think is Ford's competitive advantage versus Tesla?
Well, I think each company has its natural strength. When Ford wakes up in the morning, anywhere in the world, when the sun comes up in China or Argentina or the US, Ford can do a pickup truck better than anyone else in the world. And I think when Elon Musk had a good start with Tesla and we learned a lot from him, frankly, it was very humbling for our team. What I learned, what I respect about him is that he started from scratch. So we created similar to him a skunk works team on the west coast of the US to build an affordable EV. We also learned from him to take some risk. We also learned that we are better than him on things like pickup trucks. So, pick your customer, know them so well that you can innovate in ways they don't even know they need, and then you don't have to worry about Tesla. I know when the Cybertruck came out, everyone said, 'Oh, they will sell 1 million of those.' Still, we're the bestselling full-size electric truck in the US. Even with all his billions, they're not enough for that strategy.
Let's talk about your business style. Your approach to investigating competitors is also very interesting. It's known that you drove the Xiaomi SU7 electric and that you do this with most of your rival cars. How does this process work?
In the case of China, we go to China as a group, take the whole leadership team. We drive them, then we pick 50 cars that are the best ones. Then we pick the best five and then we fly them to Detroit and we all drive them every day. We put them on an airplane and fly them to America. And we try to find out what makes them so special. My experience was fantastic. I was so impressed with Xiaomi. No wonder they're doing so successfully. They're the Apple of China. They also make cars. The digital experience. You bring your phone in, you don't have to pair it. It automatically recognizes your phone. It has facial recognition. It has an AI assistant in the vehicle. The vehicle goes 0 to 60 in 3 seconds with the push of a button. It looks like a Porsche Taycan. It's a very good product. It's not perfect and we can beat it in the segments we compete. But for my team, Ford missed Japan. Ford missed South Korea. We can't miss China. So the message to my team is if the CEO respects the competition from China, everyone in the company should.
Looking ahead, what will be the future of Ford?
I think Ford's future is very bright. Not because I'm the CEO, but because I'm starting to see something change. The company is absolutely laser focused on the fundamentals of an industrial company: cost, quality, and safety. We now have fallen in love with cost and quality. The Pacheco plant here we're next to is the second highest quality factory for Ranger. But they're not happy with that. They want to be number one, to beat Thailand. They want to be the first one. Because that's the pride of Argentina. And so I think that's the most important thing in an industrial company. Also, we don't want to make cars for trucks for everyone. We want to make beautiful off-road machines and work vehicles.
More broadly, how do you imagine the mobility industry in the future?
