Ford CEO Hackett on restructuring at the automaker, how tariffs impact business
Ford CEO Hackett on restructuring at the automaker, how tariffs impact business Begin Auto Show coverage with the CEO of the Ford Motor Company, Jim Hackett, who’s been on the job for this is this is a challenge for you. That would be a challenge for a guy that worked in the Auto industry is whole life, and you have worked in the Auto industry for the CEO for 19 months, but not long beyond that. Even on the border 4 Vision, some people question for division that you have the vision for where this company goes in 5 years. Where is Ford and to articulate that decision for us right here now, people that have known Jim Hackett in his business career with a right knee constantly when they read the people are questioning that we have one. It’S it’s my history to take sometime, not too much time to be very thoughtful about a very powerful way to Ford’s going to win. We are through that phase. This is the year of that we start execution series of announcements or staged in time for when they need to come out and that together forms. What we believe is the vehicles in the future. If ever more intelligent, ever more fun to drive so intelligent, they could drive themselves and they relate to a world that, in itself, is. In Moore collagen for the listeners is called Edge. Computing, for others is called The Internet of Things. All it means is your vehicle, and the things that interact with Will suddenly be talking to each other and the brain that are inside the vehicle itself. Now what this means is there’s a. Here, where all this is evolving. Are you getting out of the car business changes? What the vehicle painting can do until we’ve been hard at work laughing all that out thinking all that through and this year you’re starting to see some pieces of that come forth anytime. You know you’re trying to run a company make money together, and you know that the complexity of this seems almost areas of the business he like the F-150. Today we release that surpassed a million units of that Vehicles. The number one vehicle of any vehicle in the world are price realizations, the highest. It’S ever been, so people love this product a lot about our Target, but in addition, the restructuring that we now announce in other parts of the world sits in front of us. We have plenty of cash to be able to address that we’re working with people really intimately they’re part of the solution, the requirements for that and then the requirements to invest for the future. When you add that all with Bill – and I and the board believe, is there’s ways to hedge some of the risk of that so weird talking about potential partners and investing some of the new ideas together for that’s going to come out soon to show is that Very thing, which is potential well there’s not more to share today, but but I can tell you that the underpinnings of what’s driving us is funding restructuring, + funding the new. We don’t want to risk our balance. Do you want to keep a high credit rating? We want to continue to pay the dividend. These are all objectives that we clearly can’t kiss and the market has begun to see these new technologies as attracting outside investors. As there’s news in the lab three days of people buying into artificially intelligent Drive systems of people putting money inside other car companies, but it’s all about them. Investing in this new technology board is probably even more attract the people like that, because of how well-run the company is, how well architected the vehicles are, there’s not as much risk in that part faster than that and part of the reason for taking the time. Is it you know the Great Recession when some companies had to go bankrupt? Nowhere near that situation, we aren’t looking at that kind of issue at all we’re sitting on 23 + billion in cash right now and and the companies in really good shape, with the news that we’re going to restructure other parts of the world. It’S even going to be in better shape in the first future, because we know those have been some of the things. They’Ve been dragging down her knees both in Europe and here in the US, and why are restructuring that generally Means Jobs get moved around if not eliminated. In some ways you had a reputation of steel case for making tough decisions and eliminating jobs. Silver GM make some proposals on that the White House came down on them. Are you afraid that whatever you’re going to hear from Washington, my restructuring issues are not the people working on the shop floor? We’Ve really got that in pretty good shape are plant utilization? Is some of the highest in the world and when we made what we call a silhouette change where we went with the dance to SUVs, nobody lost their job. In that regard, we will transfer people around. So that’s the promise to the folks. In the factory floor, man, what the design of the business isn’t threatening that at all that’s different in some of the other markets that you’ve been reading about where we have to get the industrial system the right size, white colors are blue, colors or no colors. Are you worried that you can push back on that? I’M confirming that there’s not blue collar Cuts in the office and our president is really manufacturing jobs, and you can see the sincerity in that in these policies, and so Ford is probably a poster child. The other way, which is it’s, been able to work through the nap to shift the sedan to SUV, and here we are, our people have employment that this isn’t threatened. We think that the trend is clear: people, one bigger more powerful. Well, if people know me will think about problems like this, philosophically is II draw in a Black Pencil around the Model. T pull the vehicle out from the outline outline today and we still have those customers what happened over time as he Silhouettes mutate because of customer preference, so low fuel prices, fuel efficiency taught us. The people want different silhouette so who’s this, but you haven’t seen all this from us with the Silhouettes in the future. You might say well that looks a lot like a sedan that I used to sit in, but the performance features of these vehicles have to do a lot more and they have to be profitable. Some of those vehicles that you talked about – weren’t, meaning our cost of capital, gold, Lakeshore, going to have lower fuel prices going forward and the people at some point. If we get a something of an oil shock, Don’t Say Hey, I want that Ford Fiesta. The great question and that’s why the synchronization of the please at Silhouettes, the people believe or a hedge, when fuel prices go high, do not Sunset until they have optionality and power trains that are ever more fuel efficient place like, for example, the new Explorer has a Hybrid auction in it it will make that vehicle more fuel efficient than the fusion that they might have opted for. If things got tough in the past last week, Racine next activity on Wall Street we hear of problems in China. Are you obviously Trey tensions? Where does it all global economy as well as us? You know the thing about the Auto industry that has a lot of resilience. When things are changing, we can have inflation. You know there could be things interrupt: one’s business with a fire. Last year, African and Wanda factories we recovered from all that. What is difficult is when there’s no equilibrium in trade structures like you’re, not sure where to build things, because you don’t know what might be changing, but I believe the world has gone to whatever face. It. Was too kind of rough rust that a ruffle that up and now they’re in the state of trying to settle at all? So we know that NAFTA has been restructured in a way, I believe, leave it Works wraps there was given taken that you know. I don’t want to be shy about telling you that both Ambassador lighthizer and Ford work do you know closely to find a win-win. I was proud of the way they I’m hopeful, that the same tone and tenor is now with Asian, just a quick inside for you down some of the demands, so a tariff works both ways and probably I think it’s a gesture to get to a better end Game which we hope is much more amenable to every everybody. We hope you’re right, Jim Hackett, always a pleasure to talk to you at your insights. If the North American International, Auto Show Ford CEO Jim Hackett discusses the future of the automaker, the decision behind ending production of some vehicles and how tariffs impact the company.