The global CEO of Ford, Jim Farley, was in Australia recently doing a whole bunch of things. Not only catching up with the Red Bull F1 team, which Ford's now involved in, but also suppliers, customers, checking out a Bunnings, going to a supermarket, a whole bunch of different things. And I was lucky enough to spend a few hours with him, including half an hour one-on-one in a range of Superduty where I could ask him pretty much anything. We talked about a whole bunch of things, including V8s like this thing, performance off-roaders, which he's a huge fan of, wants Ford to dominate the world on, and of course EVs. There's a whole bunch in there. He's very frank, very open, very honest, as you'll see. Very much a straight shooter. Here are the highlights. Hope you enjoy it.
So, looking at I guess the global automotive market, Australia is a minnow, a relative minnow. I know. No, you're a Ford Strong here.
Maybe a No, it's not a minnow. It's disproportionately one of the most important markets in the world because there's no tariffs and your government gave up on local manufacturing of automobiles several years ago and we have a development team here. We're the only one left with the engineering group here in Melbourne for the Ranger and the Everest, the T6 platform globally. So they do all the engineering for our global Rangers around the globe. So for us at Ford, this is one of the only three development places in the world. Number one. Number two, all the Chinese and South Koreans are all coming with utes and pickup trucks and because there's no tariffs. So there's a completely open market. But why is it interesting? Well, people use their vehicles here in Australia like they use in the US. You go to South Africa or you go to Thailand or you go to the US or Canada, people drive long distances. They use pickup trucks, they have a huge group of work vehicles and so Ford bet on pro or you know the pressures of electrification and work this is ground zero actually. So it may be small in numbers but it is mighty mighty in terms of importance.
So this is one of your prime proving grounds if you look to work out how to tackle the Chinese.
Yeah, absolutely. I would say the the not a the
And how do you do it? What are you learning? You've only been here two days, but what what have you learned?
Well, I've done years of research in advance. So, I'm just coming here to kind of confirm my prejudice or disrupt it. That's why I'm here. I'm confirming something. I'm not coming here with like an open mind at all. 99% of the decisions are clear in my mind, but they're all on paper, so I can change them all, not spending any money.
So, that's why I come here.
So, I assumed you were coming here to work out largely how to tackle Toyota and how to try no muscle limp. That's not part of it at all.
Well, I mean, Toyota's a juggernaut here. They always have. I worked for Toyota. I mean, John Economou and the Aussie team were famous globally, Toyota, but no, I don't think they're I think Toyota has a very solid reputation here. They don't really have to invest a lot. Quality is really, you know, their reputation. They're kind of in every four corners of the industry. But the new movers and shakers who are going to disrupt Ford's you know acceleration in Southeast Asia not just here are definitely the Chinese and the South Koreans. I see Sam Young and Great Wall especially, less extent BYD. You know these are all companies incredibly ambitious globally, their local market is really struggling, they don't make any money locally in China. Places like Australia, Thailand, Indonesia, Vietnam, these are all kind of like core markets for them and they are going to change the competitive landscape for all of us and I don't want to get ahead of that. I don't want to be a victim. We can't afford to miss this one.
No, not at all. Not at all. They are far from perfect. They are ambitious. You're going to see an MG. You're going to see like 20 new utes from every Chinese brand. They're very ambitious and they're very good at engineering partially electric vehicles. But when it comes to real-world work vehicles and off-road vehicles, you know, they are a long way from being competitive yet. Don't compete everywhere like the past. Focus on work and passion products, especially off-road. There is no Porsche off-road here in Australia. As close as you get is Toyota with Land Cruiser 70s and Prados and you know, but they came from the off-road space from a work standpoint. But passionate off-roaders that I met like the Rangerettes who go off-grid and camp, they're not looking for just a functional vehicle. They want a lifestyle vehicle. And Ranger with Raptor has done a great job. But we can do a lot more. Tremor Everest is coming out now where you can come out with a whole Porsche-like lineup for off-road enthusiast trackers.
In America, you seriously wound back the CO2 emissions regulations. Europe, yes, big chunks of Asia and so on are going the other way. They're extremely strict. How do you manage that the company walk forward?
It's very difficult. Our investment cycles are 5 to 10 years on a platform, could be 20 years like the new UEV small electric, that's a 20-year investment we're making on the platform and the governments change every four years sometimes faster. So how do we manage the best we can? And I think the most important thing for me as a CEO is focus on the customer because in the end, all the customers are voters. And if the regulators go too fast, the voters tell them, 'We're not going to vote for you if you put on these requirements that we can't afford.' And we've seen that in Europe. We've seen in the US. Politics really have changed in a lot of those places because the regulations went too far. I have faith in the democratic process that if these electrification initiatives go too fast, even if they're right-minded in terms of their social intent, then you know the voters are going to vote and the regulations are going to change. So the most important thing for Ford that we can control is what is the duty cycle and the customer going to want.
What are they willing to pay for?
Actually, part of it is also a message to the government here, you know, like you sure you want this? You sure you want all this electrification? Because the customers are going to they're not going to be able to afford it. So, either you write a big check or it's not going to happen as fast as you think. One of those two things are going to happen.
Aren't the Chinese proving that it can happen at affordable prices?
Well, I think they're subsidizing it now. I mean, how much is BYD making on a Shark right now?
So, yeah. I don't think you can say that. Personally, I think when we see the cost of the vehicle, I think they're subsidizing it. Yeah.
I think they're here because it's an important market. They want to get a head start. They sell a BYD Shark at a, you know, they pass on their subsidies from the Chinese government to the Aussie customers and, you know, and it's just a way to get started.
It's essentially buying market share.
Yeah. Yeah. And Ford's done it too in the past.
At this point in time, I don't think you could say they're wildly profitable with these electrification.
And your government is not easing off.
So coming back to I guess the compromises that can be made in vehicle design and as you said starting from a I guess an ICE architecture or an ICE thinking, yes, you potentially make compromises if you're doing E-Rev and BEV utes pickup trucks. Might they inevitably be compromised rather than starting as a BEV design?
