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Jim Farley Tries to Reinvent Ford and Catch Up to Elon Musk and Tesla in 2022

Ford’s CEO is set to unveil an electric F-150 pickup truck that will determine if the company can survive and thrive in a Tesla-dominated sector.

On a recent Tuesday afternoon, Jim Farley, the chief executive of Ford Motor, took a spin on what could become one of the most essential vehicles in the company’s 118-year history: an electric F-150 pickup truck.

Sitting at the wheel of a prototype at the company’s test track in Dearborn, Mr. Farley floored it. From a standing stop, the 6,000-pound truck surged forward. “Four seconds,” he shouted when it reached 60 miles per hour. That is unbelievable for a vehicle of this size.

“Let’s see if we can get some air,” he added as the truck sped off in a series of drops and climbed on the track, shouting “Yes!” when the wheels temporarily left the runway on a slope. On the final lap, he rounded a steep corner before landing immediately to hit 99mph, almost the track’s 100mph speed limit.

Mr. Farley muttered as he walked out, shaking his head, “I can’t wait.” “I can’t wait for customers to get their hands on this truck.”

For the car business, these are both tense and exhilarating times. Electric vehicle sales look to be on an inexorable upward trend, fueled by Tesla’s dizzying success. The transition from gasoline-powered automobiles and trucks to electric vehicles with no exhaust pollution will have far-reaching implications for the environment, climate change, public policy, and the economy.

Automakers are investing tens of billions of dollars in retooling plants and scrambling to retrain workers in preparation for what could be the industry’s most significant transformation since Henry Ford introduced the moving assembly line in 1913. They’re also trying to catch up to Tesla, a powerhouse in its own right.

The dilemma for Ford is whether a vehicle executive from the Detroit region can compete with Elon Musk, Tesla’s CEO, whose firm is fast expanding and valued at around 16 times what Ford is.

Ford Wants to Beat Tesla at Its Own Game - TheStreetLast year, Tesla sold nearly a million cars worldwide, nearly doubling from the previous year. Ford has produced more than four million vehicles, but sales have fallen 6% as the company struggles to get enough computer chips, batteries, and other parts. People equate the Tesla brand with luxury and technical expertise. Ford is considered a manufacturer of giant trucks and utility SUVs.

“The traditional auto industry is lagging behind Tesla,” said Earl J. Hesterberg, CEO of Group 1 Automotive, a major auto retailer that has known Farley for more than two decades. “It’s often assumed that if you go a few years later, the greats can catch up. Today, however, the pace of change is considerably faster.”

According to auto experts, if Ford is to prosper in the age of electric vehicles, the electric F-150, dubbed the Lightning, must be a hit. According to William C. Ford Jr., the executive chairman of the company and a great-grandson of Henry Ford, introducing this truck today is tantamount to betting the company. If this launch fails, the entire franchise might be tarnished.

Although the company has received roughly 200,000 bookings for the trucks, it may yet face difficulties. The global chip shortage, as well as rising costs of lithium, nickel, and other critical raw materials for batteries, might delay production. Ford’s truck software may be defective, a problem that hindered sales of a new electric Volkswagen in 2020.

Mr. Farley and Ford have a few things going for them. The F-150 Lightning, unlike many other electric vehicles, is reasonably priced, starting at $40,000. The tiny Model 3 sedan, which starts at more than $48,000, is Tesla’s most affordable vehicle. Families and corporations with large truck fleets will appreciate the Lightning’s ample storage, which includes a massive front trunk. It also helps that Tesla’s Cybertruck won’t be available until next year.

Jim Farley Tries to Reinvent Ford and Catch Up to Elon Musk and Tesla - The  New York TimesWith the Mustang Mach-E, an electric sport utility vehicle, Ford is already in the electric vehicle business. In its first year on the market, 2021, it sold over 27,000 units and received positive feedback.

The F-150 Lightning is set to go into production on Monday. Ford’s biggest truck rivals, General Motors, Stellantis, and Toyota, are all at least a year away from releasing competing models. Rivian, a newer company in which Ford has invested, has started selling an electric truck but is having difficulty increasing production.

Mr. Ford stated, “If the Lightning launch goes well, we have a great potential.”

‘Jimmy Car-Car’ is a fictional character.

Mr. Farley ticks most of the boxes when it comes to running a significant American carmaker in many ways. Mr. Farley comes from a family of automakers, like Mary T. Barra (the CEO of General Motors), whose father used to work on a Pontiac assembly line). His grandfather worked for Ford Motor Company. During his travels to his granddad, he would take tours of Ford facilities and other historical sites. He bought a Mustang as a 15-year-old while working in California one summer and drove it back to Michigan without a license. Jimmy Car-Car was his grandfather’s nickname for him.

Mr. Farley has had a varied career and has been involved in creating businesses like Mr. Musk, a South African native who founded PayPal and other companies. Mr. Farley, 59, was born in Argentina while his father worked as a banker there. He also grew up in Brazil and Canada. His career began at IBM, not in the auto sector. He worked at Toyota for a long time. He worked on the embryonic Lexus luxury brand, which is now a powerhouse, to assist the Japanese carmaker in overcoming its reputation for creating dull and affordable automobiles.

Jim Press, a former top executive at Toyota and Chrysler, described him as having “a restless mind.” “His intellect is never idle; it is always pondering. He has a bravado about him that allows him to push past what others think.

EHNIn 2007, Ford’s then-CEO, Alan R. Mulally, hired him to help turn the company around. He was in charge of the company’s European operations and refined the company’s marketing, which included early usage of Facebook and social media.

Some at Ford were irritated by his zeal. Mr. Hesterberg stated, “Worrying about hurting people’s feelings isn’t at the top of his priority.” “However, it’s probably what’s required these days.” Tesla has the support of the traditional auto industry, and business as usual isn’t going to cut it.”

Mr. Farley re-evaluated Ford’s approach in recent years, visiting technology businesses in California, and came to a conclusion: “They’re chasing our customers.”

Ford’s top executives realized in 2018 that the business was in grave danger of falling behind Tesla, General Motors, and Rivian in the electric vehicle and pickup truck markets. Ford chose to modify an existing F-150 and purchase batteries designed by a supplier rather than build a new electric truck and its batteries from the ground up, as other automakers had done. The move has been dangerous since changing traditional automobiles to battery-powered vehicles is challenging because batteries are heavier than engines and are stored beneath the floor rather than under the hood.

Mr. Farley explained, “We did not know how this would turn out, but we knew there would be a big penalty if we didn’t swing for the fences.”

Despite this, the Ford truck team’s initial estimate of how many Lightnings it might sell per year was a pitiful 20,000. Tesla was experiencing sales growth of around 50% per year and planned to build two massive facilities. Thus the forecast was unusually low.

All about software in automobiles

Mr. Farley, who became CEO in December 2020, said he was more convinced that Ford needed to restructure itself, in part because of his team’s lowball projection for lightning sales.

Elon Musk offers to buy Twitter, says company 'needs to be transformed'According to many auto executives, one of the key advantages of Tesla is that it goes beyond conventional automakers in developing software for engine control, battery management, notifications, and entertainment, driver and passenger. As a result, Tesla, founded in Silicon Valley, has produced cars that go further on a single charge than most other automakers.

Tesla can also update the software in all of its cars remotely, a feature Ford and other established automakers have only recently begun to use. Even simple modifications or repairs on most cars built by recognizing manufacturers must be taken to dealers.

It’s no surprise, then, that Mr. Farley is most concerned about Lightning’s millions of lines of code having software problems.

We were trained as an auto company to release cars only when they were perfect,” he explains. “With software, though, you can upgrade it over the air.” This software orientation is uncharted territory for our quality system.”

Mr. Farley said it was so crucial for Ford to improve its software capabilities that he spent months recruiting Doug Field, a prominent figure in auto technology who has worked at Tesla and Apple.

Mr. Field, who began his career at Ford, said he was lured to the opportunity to develop a technology team at a firm with a century of engineering and manufacturing knowledge in an interview. “If we can combine those, we’ll be a force to be reckoned with,” he stated.

As Ford Exits India, Modi Govt Urged To Roll Out Dealer Protection Act |  MintFord stated in March that it would split into two divisions: one, Ford Blue, will continue to make internal combustion engines, while the other, Model E, led by Mr. Farley and Mr. Field, will focus on electric vehicles.

Investors have thus far backed Mr. Farley’s strategy. Ford stock reached a high of $25 before Russia invaded Ukraine, up more than 300 per cent since Mr. Farley took the helm, but it has since plunged to around $15. Nonetheless, Ford’s market value has surpassed General Motors, which has long been the leading carmaker in the United States.

Yet Wall Street continues to believe that Tesla, with a market capitalization of more than $1 trillion, would dominate the industry. In contrast, Ford, with a market capitalization of $62 billion, and General Motors, with a market capitalization of $58 billion, will be relative minnows.

It’s no surprise that Mr. Farley spends most of his time on the Lightning. He pulled out his phone over supper at his home in Birmingham, Michigan, north of Detroit, and went through a long email he gets every evening with updates on every aspect of the launch. He read through the subheadings and said, “Software, manufacturing, batteries, chips, body assembly.”

One night recently, Mr. Ford was in California when he received an email late in the evening from Mr. Farley, who was nine time zones distant in Germany. Mr. Ford stated, “Jim had four or five topics he wanted to talk to me about.” “He sends me at least two updates a day.”

Computer chips are a significant source of concern. For more than a year, a shortage has disrupted auto production all over the world. Outside the Dearborn Truck Plant, a few hundred gasoline-powered F-150 trucks are parked and waiting for a minor but critical component. This device controls their automatic windshield wipers is delayed due to a shortage of chips.

Before his test drive, Mr. Farley had an hour-long tour of the Lightning assembly line to see how much work remains.

CodeRed =Tokens FET&VRA/PROOF.OF.VIEW ADVOCATE (@composite9) / TwitterHe was shown new robotic, self-guided skids that transport the Lightning’s steel bed, or box, from one work station to the next at a portion of the production line. A pricey and intricate overhead conveyor system is no longer required, thanks to the skids.

Mr. Farley was informed by Bill Dorley, the box team leader, that his crew was almost ready to go. “All we need now are parts,” he explained.

Heavy earth-moving equipment was dismantling the concrete walls and flooring of a structure built in the 1930s to produce the Ford Model A just outside that area of the facility. The corporation will be able to expand Lightning production in that location.

Workers waved and screamed welcomes as Mr. Farley walked along the manufacturing line, seeking photographs with the boss.

Mr. Farley approached a group of workers and inquired how they were doing and what they required.

Michael Johnson, who will be installing Lightning’s suspension, has outlined one of the main electric vehicle concerns many industrial workers have: job security. Electric vehicles don’t require a lot of people to build because they have fewer parts than traditional trucks. Mr.

Johnson is particularly concerned about a trucking facility Ford is building in Tennessee, a state historically hostile to unions like the one that represents workers in Dearborn.

Mr. Johnson inquired, “Is this plant going to be safe?”
Mr. Farley responded that a different truck would be built at the Tennessee plant. He went on to say that instead of purchasing motors along with axles from vendors, Ford wanted to start manufacturing them.
“As a result, our plants will be very busy,” he said.

That is crucial for Ford’s long-term success.

Edited by Prakriti Arora



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