N/A Hi, I'm Jim Farley. We're here at Ford's Dearbornne campus. I'm so excited to do this show, Office Hours Business Edition with Monica Langley. How you doing? Good. How are you? Good to see you. You, too. All right, let's go. Okay. Thank you for that intro. Sure. Love that. And you are the CEO of Ford. N/A Yes. By the way, you just said we're at the Ford campus. Yes. This is amazing. Tell us exactly where we are and what's all around here. Well, when Henry Ford was he was born in Cork, Ireland. He came to Cork Town in Michigan and then his family settled on a farm uh not only a half mile from here. So, and my greatgrandfather also wasn't uh lived here in Dearbornne. Um and so when Henry started to build his plants, he built them in downtown Detroit, but his home was really Dearbornne. So when we became really successful with the Model T, he moved the company from Detroit to here and built a whole campus. So we have the Lions practice facility which is owned by his grandson William Clay Ford and my boss, the chairman um and his family. Uh we have right next to us is our test track that was used for the tri motor Ford airplanes. Across the street is the Greenfield Village uh and the Henry Ford Museum which was uh inaugurated by Thomas Edison. They built a whole campus for employees, children and employees to be educated about innovation. We have our global product development center here um and our famous headquarters which we're now moving to a brand new facility across the street. So, this is ground zero for uh America's, you know, car company um for over 120 years. That's fascinating. And I noticed the test track. I wanted to go get on it. Yes. But that's like a super sensitive site like Fort Knox and the walls are much taller than I could ever jump to look in. Well, we do our active testing of our new vehicles there and we have to camouflage them and uh but Monica, you know someone so we can get in there. N/A Okay. All right. Now, listen. This goes to Jim Farley. You're all about car culture. You're the head of a car company. You wrench on cars. You uh have a podcast about cars. You race cars. Yeah. I need to get out more. But and then we just drove up in the Ford um Darkhor Mustang. Darkhorse Mustang. Yep. Um you drove up in it and made a lot of verooming sound. That was good. But because you live and breathe car culture, what is a car to you? To me, um a a car is one of the most expensive consumer products a person will ever buy around the planet. Uh there are about 90 million sold around the world. In some countries, it's the most expensive thing that someone will ever buy in their lifetime. Um and so a car is certainly transportation, but it's changing a lot. In Asia, more than 20% of the time people spend in the cars, it's stationary, not in traffic. It's like a place. It's like a new third or second place for people, especially in a busy China. a a mom uh going back into a three generation home. It's her chance to watch a movie perhap per perhaps uh and and uh and rejuvenate. So car's changing, but it's a it's a place. It's a it's a third place in our lives. And with automation, it's going to really change. The trips are going to go from getting from point A to point B to being a different experience completely. Let's talk about that in a little bit. But one time I saw that you referred to N/A selling Ford as kind of emotional because Yes. You're not selling shampoo. You once said, "Yes, I do." Do you know what I mean? It can be an emotional thing for people. Ask Oh my god. We have We have the Raptor rally this weekend in Lake Havasu and it's completely sold out. People coming from all over the world with the Raptors to be around other people. Um I've seen people cry and laugh um because cars are really emotional for people. Um, and cars to us personally in my podcast, I found it doesn't matter if you're Tom Brady or, you know, it doesn't really matter. Everyone has a connection, a road trip, their first car, you know, an emotional event in their life. That's why people name their cars. Exactly. And as the Ford CEO, what is that to you? Well, it's changed a lot during my life. You know, I entered the industry. I was apprehensive because I loved cars. I thought it's a business. It could actually ruin my love of cars. Over time though, it really changed from cars to the people. Um, as I became as I got more responsibility, I've I've seen so many great cars and N/A now what really gets me excited is to watching people grow. That so that says a lot about kind of your transformation as a leader. Yes. Yes. And it's interesting you say that because I have older friends from college who still think of me as kind of one-dimensional car person. And and if they were to see my average day and what I'm like, I think they would be shocked actually because I'm not that person anymore. Of course, I love cars and it it's so important to me. Um especially when I have a bad day, you know, I I'm still in love with what we do. But to lead a company of 180,000 people, $200 billion public company, it's really not about the cars. I We have That is a shot. Wait just a minute. It's not about the cars. Well, of course it is about the best product and always will be. We're a consumer products company, but it's in my job as a CEO. I would not be successful if all I did is focus on the best vehicles. It's not that simple. I mean, the reality is we have to have competitive cost. We have to have competitive quality. We have to have, you know, great talent. We have to have great technology for the future of vehicles. And we'll have adjacent businesses like our finance business today or our software business. There'll be new adjacency. Who knows? For maybe making a a large-scale robot in the future that works at your house for you. Uh I I don't think my job affords me to just focus on the physical four walls of the product. Let's talk about you and cars before we N/A jump into other issues because you are an actual racer. Yes. Do you race cars? Yes, I do. Yes. What do you race? I race anything I can get my hands on. Uh, but you go to professional. Yes, I race at Lama this year uh in a Mustang with 50 other people. I race modern cars uh Mustangs. I race vintage cars like the Ford GT40 that I own that won uh Lama back in 1966. And you didn't win in it yet. Uh I Well, I have I've won a lot of races, but no, not my GT4. I think I came in second in Lal Classic. But um I know you've won a lot of races. I've followed you which when I first met you when you began as Ford CEO five years ago and I talked to you and you said I said surely now you're the big-time CEO of a Fortune 20 company. You're not going to keep driving, are you? It's a pretty dangerous activity, Jim Farley. And what did you say? I said it's my yoga. I'm not giving it up, which is I talked to Bill Ford and I talked to the board and um also flew gliders, so I can't do both. But they said, "Look, you know, we trust you, Jim." And uh I know where I know the FIA tracks where there's a lot of runoff, and I don't take, you know, I don't take unreasonable risk, but racing is filled N/A with risk. But I I find it to be look, I'm around car people, but what I love about racing is it requires like piloting an airplane 100% focus. You can't think of anything else while you're driving. And uh I love that because it gives mental vacation. For last weekend, I was at Walking Glenn. Three hours I thought about nothing other than the next turn, the person next to me, beating them for three hours. nothing else. There was nothing else. And it really refreshes me when I'm done. I feel completely rejuvenated and I'm around car people and they ground me. It takes a team to win. I'm talking to the mechanics. I'm working at the car late at night, you know, and it grounds me as a leader. I I'm not Jim Farley the CEO. I'm Jim Farley the teammate. And I think that's N/A essential for for us as leaders to have a place where you can fill up your bucket. And it happens that this is in your industry. And when you were appointed CEO, people loved they had an actual car guide. Yeah. Yeah. Do you know what I mean? Because not the previous ones had been. Yes. There are two sides of that though that um as a car person well first there's like the stereot type of a car person in the 50s you know cigar chomping you know old uh you know person who's an engineer who points at the design studio and says I like that one I don't like that one. I'm not that kind of car person. I'm actually the opposite of that. Um but I do orient my life around cars. This year I took a long trip with my daughter and my 1928 car uh all the way through Colorado for 800 miles and we loved it with similar people. That's my life. I love the people around cars. Now you have obviously a need for speed. Does that are you injecting that in your leadership? I mean I'd like to talk to you about what are your leadership hallmarks. Speed seems to be one and that's in the transformation of this company. Yes. I think all traditional OEMs are are really far behind but Ford had even more catchup to do. This was a very humbling journey we've been on um on quality and cost. These are basic things for an industrial company as you know and we had a lot of progress to make. In addition to that, we have this transformation of our industry, both electrification as well as softwaredefined vehicles. All of those three things had to be addressed at Ford. All three things. Get the industrial system fit, get the technology for your EV strategy right, N/A and there was no playbook, and it keep continues to change. Uh, as well as we needed to get serious about treating our vehicles like digital devices. and wrap more services around our business. So, it was a huge transformation the last five years and I would say we're about in the middle of things. Okay. Now, um you have always been in the car business basically. Yes. Now, what was your first job? Oh my gosh. I I would say my first job job I was I was I was a newspaper boy in Connecticut and I'm from newspaper newspaper girl. It was great. Um, I loved it. Um, actually the original, um, President Bush's mom, Prescott Bush, who was a politician in Connecticut, she was on my paper route. Um, and then when I got paid on the weekend, I would take my Schwin Stingray and go downtown in my town was the Ferrari distributorship for all of America. And of course, me being me, I fell in love with the Italian mechanics in the bottom floor. And at 13, 14 years old, we were talking about cars mostly in English/Italian with all those beautiful Ferraris. You know, that's how I kind of started. But my first breakthrough job was I was a interior upholstery person at a car restoration shop in Santa Monica. Yeah. In California. And it that's how I put myself through graduate school at UCLA was getting my MBA. and I worked for our first American N/A Formula 1 champion, Phil Hill, who was a race a race car driver Ferrari. He was my boss. And I was a janitor. And then I got upgraded to working on interiors. And we worked on very special cars that won Pebble Beach. So I worked on ostrich hide, frog interiors. I worked on, you know, fancy like Sylvester Stallone's cars, you know, and that was really a breakthrough. I kind of got my PhD sitting around the break room with these artisans who taught me what a beautiful car looks like. I remember the body person, because I was interior, the body guy goes, "Come over here, Farley. Tell me if this panel's straight." I said, "Okay." So, I put a couple fingers on it and he looks at me, he goes, "Is that how you hold your girlfriend?" And I said, "Okay." I used my whole hand. He goes, "Don't you feel a lot more information there?" I said, "Oh, yeah. Yeah. This is not flat." Uh, I kind I had a thousand experiences like that. And so when I look at a car, I go back to that moment when a 70-year-old paint guy, you know, who painted cars with no respirator. He taught me what beauty was and it was a it was my first more most important job. That's very special. But then a little bit later, you joined Toyota. I did. Yes. What did you do at Toyota? Uh I joined I think I was the first class of MBA in the US to be hired. There's one other person and I was hired to be in product planning which was my dream job when I entered the industry. I wanted to work with engineers and to make cars like the concept of the car and make sure it was executed right for the customer and that was a breakthrough moment for me. I had offers from Ford and General Motors and Chrysler. My family is from Detroit. My my grandfather was an hourly worker here at Ford. And so when I called my grandfather said, "I have a great job." Um, I I had actually worked for JP Morgan in corporate finance over the summer between my two graduate schools. And I I loved it, but it wasn't for me. And so I decided to follow my dream to go into the car business. And when I joined Toyota, I let's put it this way, I don't think my family was super, they N/A were proud of me, but they were c certainly not proud I was working for a Japanese company. My father was a naval officer in World War II. Uh my grandfather worked at Ford. It was a tough conversation to be honest. And you know, I had to stay on the West Coast. But I did my research. I I knew that Toyota was going to be a force to be reckoned with. And I knew it was Yes. And and I knew that working on Lexus could be a moment for me to learn a lot. So it was a big risk. And I guess that's the thread through my whole career. I kept taking risks, but I knew what I was doing. They So they were calculated risk. They weren't just crazy risk risk takingaking. Yeah. Now at then you were came to Ford. I'm sure everybody's super proud. And fortunately, your grandfather didn't get to see you as Ford CEO, but do you It's a 122 year old company. Yes. It's an icon. An American icon. Do you every day feel the pressure of having to preserve this legacy at the same time making it profitm, innovative, future forward? Absolutely. That is that is why I took the job. I had another offer to go to another job which I won't talk about and you can my wife my wife and I talked about it and she was and and I said to her Leah these will be big problems. These will be important problems for a lot of people. I I want to help the company um be the best of Ford because Ford deserves the best. And I'm an American kid. Yeah. And my grandfather worked here. Like his job at Ford put my mom through college. It was a it was a moment where everything came together and every day I walk into that office. I have no idea what's going to happen. Um, certainly I haven't know exactly what I want to do, but there's always a surprise around the corner, as you know better than I, but I am extremely connected to the mission of N/A making this American icon relevant through this transition. I think the next CEO will have a completely different complexion to me. Uh, I believe each of these eras requires specific kind of um leader and I think the board recognized the moment we were in and when I'm done um we'll all know and I I I know that this will be looked on as one of the most critical periods, maybe one of the most awkward periods for that 122 year history. Now mentioned your successor and you said we'll all know when it I mean what are you thinking? How much longer are you going to be the CEO of Ford? That is a great question. Um I think I think it's like professional sports. Um thankfully our minds get better and we have more wisdom with age and business. I think there's just a moment when you know I'll go back to cars. Sorry, but um I once uh saw an interview of Johnny Rutherford who won the Indy500 many times and it was fascinating to me as a CEO um because we're performanceoriented and we're competitive and so we all recognize that we don't want to um you know lead when we're not the best person to lead if we're right-minded. So Johnny said that he knew that he was done with his racing career six months before he retired because he came into the garage and he didn't sweat all the little details he had previous race and everyone else thought on the outside that he quit because he had a bad accident. He said that was nothing to do with it. He was upside down, methanol dripping on him. He never caught on fire but it was a very scary moment. He said that had nothing to do with my retirement. I knew that when I stopped sweating those details, I was not going to be the best in the world. So, are you still sweating those details? Oh, absolutely. I do. I mean, this was because this is in your blood that your grandfather worked on the Model T, I think. Yes, you did. You did. And um because it is in your blood. When you became CEO, I think that was a dream come true job. Has it become a nightmare yet with all the problems going on? I mean from, you know, I mean, I I would say a lot of my true friends, you know, friends that are with you in good times and bad, they'll say, "Holy cow." Yeah. Yeah. Or worse. Bring on the Locust. You know, it's like, um, but I think that's how all the car companies, you know, are are facing now. N/A And it's an industrial company in the middle of geopolitic tariff war with China emerging going after directly every job in the automotive industry outside of China. It's just our lot in life. Yeah. And what do they say? God gives you what you can take. You know, I think I I think, you know, it's all happening and it's all okay. And I feel like I do have the right skills and every year I get better and you're still getting better. So you'll be around for a while. Absolutely. But that's the board and Bill Ford's decision. Um that's how it works and that's how it should work and I respect that completely. But congrats your recent Q3 earnings. Yes. You beat all the Wall Street estimates. It was a great quarter. It was. Yes. So long time in coming. So you are are you turning the corner? Are you I think so actually if you were to ask me two years ago I would probably say yes but I would say in retrospect this corner is a bigger corner. It feels not like a corner. It feels like cresting a hill. I feel like we just crested a hill. Not because we had a good quarter because I can as a leader we all have a six sense about where we are in the journey and when when do you get critical mass critical mass in your team how they work together which is you can't predict actually you can get the best talented athletes but how they work together as a team very influenced by you as a leader but it just kind of happens or it doesn't happen but our strategies ies are starting to play, you know, play out now in the marketplace and we have lots of headwinds which which I think we've done a good job thinking ahead. So I I feel like we're cresting a hill now in the sense that we're far enough down the execution of our plan that it feels more exciting than it was yesterday. That's that's great. Yeah. Okay. So now one thing that you have become very vocal on is the essential economy. Yes. And I think given your background with your grandfather being on the assembly line and now managing all these people that work for Ford, um you have a great deal of respect for the bluecollar worker. I do. I do. Tell me what's on your mind with that. It I mean in my humble opinion those N/A jobs made our country what it is. those hardworking jobs, a whole generation and generations, generations today that that go to work every day. I was in Kansas City yesterday, you know, in the summer it's 120 degrees. Do you want to be putting Raptor bump bumpers on F-150s with 120 degrees? It's hard. You and I would leave that job and we would be sore for a week. They do it every day, eight to 10 hours a day. It is not easy work. It is really hard. It's tedious. Um, and it's important and the essential economy, we are in trouble in our country. We are not talking about this enough. Um, we have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians, and tradesmen. It's a very serious thing. We do not have trade schools. We are not investing in educating a next generation um of people like my grandfather who had nothing, who built a middle class life and a future for his family. Those jobs are out there. Mechanics in a Ford dealership. As of this morning, we had 5,000 openings. A bay with a lift and tools and no one to work in it. Are you kidding me? Nope. $120,000 a job a year, but it takes you five years to learn it. Take a diesel out of a Superduty, it takes a lot of skill. You need to know what you're doing. And God forbid we ever get in a war, Google's not going to be able to make make, you know, the tanks and the planes. So, this is a a self-defense for a country issue. But how I think about it is if we work together like we always have in America, we shine a light on the problem and we start getting people together like we did at Accelerate here in Detroit, like-minded people with similar problems, Roger Pencey, lots of other CEOs, and we get after this with the government, with education. I think we can solve this. But we have a lot of work to do. And I'm very humbled. I'm late in my life. these jobs gave me the ability to go through graduate school. N/A Um, and we are we are in deep trouble when you compare us to China. Now, you've made moves at Ford to kind of follow the Henry Ford model, I think, from 1914. Yes. Which was when he suddenly paid the factory workers a lot of money. $5 a day. Mhm. Which was big back then. Yes, it was. And what are you doing now? You're actually trying to show we value this work. Oh, yes. We I'm so proud of us. I'm always proud of us. But there are certain moments, Monica, where it comes like into into focus. We were the first company to ratify a union agreement with the UAW and the Canadian unions negotiations. The last time that came up, there were three companies and they were all trying to do this at the same time. And Ford was the first in both cases. totally different countries, different workforce. Um I I believe that we learned during COVID that a two-tier wage system where we pay some people, you know, $17 an hour and other people $25 an hour is just not going to work. We saw huge turnover. Many of those people I did skip levels, went to the plants, they're like, "Mr. Farley, I work three jobs. don't expect me to be on time at Ford when I have two other jobs to work. And I said, we got to do something here. So, we got rid of the lower tier, paid everyone the same. Now, those people have a career at Ford like my grandfather. Um, and if you go into special trades, you know, you know, fully fringed, $100,000 plus, you know, with great benefits, you know, that's that's the kind of America we want. Now, it'd be cheaper for us to make more stuff in Mexico, but we think it's smarter over a long term for our country to do what we do at Ford, which is make 80% in the US. Speaking of bluecollar jobs, your son, who's with you today, Jameson, he had a bluecollar job this summer. What did he do? He worked on a NASCAR team and in his spare time, he worked on a modified race team at night. He learned how to weld, N/A fabricate. Uh he loves wrenching with me. We were under my Bronco this morning working uh working on it. Um and I'm really proud of him. He likes working with his hands. He's got a a job at a dealership on the weekend. Um and it and I think I'm proud that he is learning how to work with his hands no matter what he does. That's cool. I mean, he's could go to college next year. Yes. And um but he also knows how to work on a car. Yes, he does. And do those things. Yeah. A lot of people his age have no idea what to do exactly. And I'm I'm really proud of him that, you know, he gets up in the morning on Saturday and goes to work. And that's what I did and that's what my grandfather did and his father. Let's talk about something big in Tennessee. You know, this is produced by the Hasslam College of Business, University of Tennessee. Big news. when Ford announced the Blue Oval City in West Tennessee. Tell us a little bit about that. Why did you invest in? What a great question. I'm so glad you brought this up because this is such a Ford story. Yeah. Everyone kind of thinks of our country as one country, but it isn't. As we all know, in West Tennessee, the unemployment is double digits. Small farm plot farms tough. It's a tough place to make a living. And when we thought about building a plant for our new electric vehicles and a battery plant, we looked around the country. We looked at five or 10 states that we knew they had an available piece of property. They had, you know, the N/A infrastructure uh ready to go. We wouldn't have to wait. And in the end, we picked Tennessee because it's businessfriendly. They the development team had done an amazing job finding just the right industrial property for us. The workforce was keen there and we would transform the community. Literally those people's lives would change forever because their job at Ford and it all came together uh with the governor and and the local politicians. We put together a deal. We've been working on the factory. We'll be launching the vehicle in the next couple years. are really excited about that and the battery plan and uh this is our first facilities in Tennessee. Cool. The you're going to do the EV vehicles and batteries and let's talk about electrification. Sure. Because you have done a lot. Yes. In that area since you've been CEO. One of the first things you did is you split Ford. Yes. How has that changed the company? because you did an EV vision. You called it what? Ford E. Model E. Yep. Model E. Sorry. Okay. And And then you have the regular. Yep. We have our pro business and our blue business, which is our retail vehicles like F-150. And And we did that, Monica, because I believe that I was very humbled when we took apart the uh first Model 3 Tesla and started to take apart the Chinese vehicles. Uh when we took them apart, it was shocking what we found. Uh on the on the Model E, on the Mache, for example, which at the time was number two bestselling EV in the country, our wiring loom, just the wiring in the vehicle was 1.6 kilometers longer than the Tesla wiring loom. It was 70 pounds heavier. And just the battery, the the cost of the battery to to haul around the wiring in the car was $200 a battery. And and I know how our system works. A combustion um engineer looks at a wiring loom and say, "Well, they're all kind of the same, so we bid it out to wiring company." But when when a EV has a really expensive battery, weight, the N/A weight of the vehicle is monetized through the size of the battery. So if you can invest more in a lightweight, shorter wiring loom, which costs more, we can save money on the battery. We don't do that systemwise system way of looking at the cost in an internal combustion engine. All the math changes with an EV with that huge expensive battery. And you needed a new division. We did. We not only needed a new division, we needed uh we needed a new way of governing the company and the business because it's fundamentally different. These cars are also softwaredefined. So software becomes a key part of the customer's experience. This is also a different orientation and as well I knew it was going to be brutal business-wise. And so I wanted my team to not have it stuck inside the company where F-150 sales would offset it and everyone would go, "It's okay, required by law or, you know, but I wanted to be public." And I guess that's my ethos. My ethos is take on the hardest problems as fast as you can and do it sometimes in public. Um because you'll solve them quicker that way. And I believe Model E was a big decision for the company because it put our EV losses $5 billion a year in the public investors eyes and they hold us accountable as man managers to solve that problem now to make EVs. Do they hold other companies accountable? Yes. But will they have the visibility? No. Will inside the company you have the visibility? No. If you break it out, everyone knows. It's no secret. On the other hand, your commercial vehicles and your internal combustion ones are Yes. going gang busters right now. Especially our pro business. It's amazing. I didn't know, Monica, when N/A this software low CO2 transition would happen with the company, with our industry. I really didn't realize, but now I do, that the business customers would push us into the future way, way earlier than a Explore F-150 customer because, well, they use their vehicle as a tool. Their vehicle literally is a hammer. And so they are totally focused on efficiency, cost of ownership, the and efficiency of what that vehicle does. So if they can get software to predict something's going to fail before it fails, they'll buy the software. If the software teaches their driver to be easier on the brakes to make to have lower maintenance cost because the vehicle utilization's higher than a retail customer like an Explorer maybe gets used 10% of the day, a commercial vehicle 70 80% of the day, then that's cost. That's money. And so we found that the services business on Pro took off in the business. It's kind of like PCs. It was It's not a surprise to me that Microsoft B2B that wing a really good bet by Microsoft to go into the B2B software business for computing versus Apple that came later B to C. Same thing that we're finding with this new transformation in the auto industry. So of all the businesses, if anyone wants to know what's happening in the auto business technology-wise, customer adoption of software, electrification, go ask a business customer. They will tell you they're more intense user and so they are tougher customer. And the the transit vans run the country in a way, right? That's big to you. I think we have 80% market share of electric vans in our country and I think we have 60% market share in vans. We have we have about 40 to 50% share of commercial pickup trucks in our country. So when you see an ambulance, when you see a construction site, when you see someone working on a road in your community, you look at those vehicles, it'll be a white superduty or a white transit. That's and we love that business. I I know you've talked about it a lot. It seems like kind of an unsexy thing, but it's an actual workplace to run America. Boy, you're right. uh our communities run on these vehicles and to tie up to what we talked about before the essential economy. If you're a plumber, electrician, your name's on the side of that truck and you're doing a job that a lot of people don't thank you for. But without you, your community doesn't work. You N/A drive an ambulance, you're an, you know, a first responder, a police, you know, we all take them for granted until we need them. That's Ford. Ford is their partner. We take so much pride that we're the number one vehicle for emermergency services, first responders, police, number one in electrician, plumbers, and those vocations. I I think it's the ethos of our company. It's like that's what the Model T was. Um, and I remember walking down San Francisco with one of my colleagues, finance colleague, nothing against finance, but I said, uh, they said, "Isn't it a shame that our market share in downtown San Francisco is so low?" And I said, "What do what do you mean?" I said, "I've been we've been walking here for the last 10 minutes, Jim, and there's hardly any Fords down here. They're all BMWs, Mercedes, blah blah blah. I said, "I think our market share is about 10%." And he said, "What are you talking about?" I said, "Look at all the work vehicles, the transit vans, the superduties working on the uh uh elevator services." He goes, "Well, they don't count." I said, "They count to us." He goes, "But they're kind of invisible, Jim." I said, "Not to us. Not to me." And coming from Toyota where we were a retail brand, maybe I appreciate our pro business more than others. But I'm sure glad it's showing us the future on EVs, which everyone thought was going to be the future. Yes. You just said on your last earnings call that you expected to only be 5% of the US market. That's not so good, is it? I mean, are you upset that the N/A market seems to be stalling for EVs when at first we thought it was going to be unstoppable? Well, I know in business we all want a lot of certainty. The reality is when a technology change happens like this or softwaredefined vehicles, we always get surprised. I always say to my team, those customers are pretty pesky. Pesky in a positive way. Like they always just surprising us. though. Don't tell me what they're going to be like cuz they're going to surprise us. And it turns out that Americans are really smart. It turns out that Americans don't want a 70 or $80,000 electric vehicle just because it's electric. They want a $30,000 electric vehicle because that's the price point and the duty cycle like the way driving a commuter type vehicle that fits an EV at this mo moment in its technology. um $70,000 vehicles. People drive long distances in the US. You have to plug in. A lot of people just think that's a pain. Yeah. And they don't want to go through it. But if you just drive a 100 miles a day, an electric vehicle is cheaper to own than a combustion Ford Maverick. And so we are, let's put it this way, I think everyone in business want thinks that when a new technology happens like AI or EVs, they all think that we're in the ninth inning of the game. No, we're in the first inning. You've seen this through your whole career. The second and third innings can look completely different than the first. And the most important skill as a leader in the company is your speed and your flexibility. We now know that the EV market in the US is totally different than we thought. We moved three, four years ago with the EV business, with the Lightning, the F-150 electric, and the Mache and the Etransit. We wanted to move fast because we didn't know what would happen. Thank God we moved fast, but then we were surprised by the customers. So two about a year ago we said let's reshoot our capital over here in a totally different direction and everyone will learn more about our EV strategy in the US. The same token twothirds of our industry on the vehicle side is outside the US which is good for Ford as a global company. Yes, exactly. We're a global company. So you want Ford to succeed all around the world not just the US. In those parts of the world, the other twothirds, EVs are exploding. In China, the biggest car market in the world, almost 27,000, so 10 27 million. So 10 million more than the US. Half of the vehicles are EVs. Half. Wow. The government is completely bet on that technology. They put their foot on the economic scale for the customer. So if Ford's going to be successful, we can't walk away from EVs. Not just for the US, but if we want to be a global company, I'm not going to just see that to the Chinese. I think Ford learned a lot from the Japanese and the South Koreans, like hardworking young people like me, and I don't think we want to make that mistake a third time. Let's talk about autonomous um driving. That remains one of the most exciting future aspects of mobility. Do you think so? And what what do you feel at Ford about that? I love this topic because everyone everyone visualize an autonomous vehicle as our company did for a long time. Uh a robo taxi, a robotic taxi. You go down to San Francisco or Austin, you see these cars and it's fascinating for people to see, oh, a car drives itself because we all grew up kind of taking driving lessons and having a machine do that. I remember talking to my grandfather N/A and he told me about the first automated uh device in his life, an elevator. And he said, I asked my grandfather, "What would be the worst job you can think of?" And he said, "A freight elevator operator where you would in there, the elevator is doing its job. You're there just put pulling the gate and all you have to do is look at that freight all day. You have no other person to talk to." and he said, "Automation is a scary thing, Jim. Autonomy is a scary thing." This was a conversation I had with him 50 years ago. I I think about that story a lot because at Ford, our ethos with the Model T is democratizing technology. It's not to go in the high-end or be the first mover. It's to spread across technology to as many customers as possible. And I think there's an alternative view of an exciting automated future for cars. And that's Ford's view, which is you push a button on the highway and your car drives for you. Wait, I know we talked we kind of have hands-free cars now. You can do that. Yes. Um, but are you saying your goal is to have like eyes not involved in the driving? Yes. Yes. Unless we really need you, we'll drive the car for you. Ford will drive the car for you. Not just handsree. In fact, hands fee winds up being a gateway to eyes off. But you know, the average American spends 20 or 30 minutes a day in their car on a highway. I never thought I could say this in my life, but what if Ford Motor Company gives most Americans 20 minutes back in their life every day? Because now in the car, we can do other things. Whatever you want. Whatever you want. That's going to be interesting, right? Yeah. to see what everyone where when is that going to happen at Ford and where are you on eyes off driving so we were investing in robbo taxis and one of one of the early decisions I made is to say let's stop that take all those people and put them on this eyes off the road uh you know level we call it level three autonomy highway driving high speed now that's a tough problem you could do it at low speed in traffic because there's a car in front of you so we can use all the sensors today and but high speed when there's no one in front of you, but then someone's got a parked car in the slow lane. You know, that's a hard harder problem to solve, but it's N/A much easier problem to solve than urban self-driving. Um, and there are more miles driven on the highway every day in America than in the cities in every every day in America. So, there's a bigger unlock for customers and that's Ford. Where are you in that process? When will I be able to get one of those? I need my eyes off. I want some other things to do. Just over two years. Yep. Is there anybody else close? I think we'll all be I think there'll be a few companies close. Elon's been working hard, but he isn't there yet. Um to the level of safety that we hold ourselves accountable for. Um I think General Motors and US and a few other companies are going to be right around the same zone. If I look at their press their press reviews or the press clippings, but I would say Ford's been working on this problem longer. So, you want to be first. I think we want to be the best. I don't want to be the first and be okay. I'd rather be six months later and be the best. And what that means is natural. If you do hands-free today, the lane centering is very different between different companies. Uh, you can press blue cruise at Ford and that vehicle, that F-150 goes right down the center. You take, you do the same thing as someone else's hands-free system. It's bouncing between lane, big truck goes by you, you're going by a big truck, it gets really close, it feels really uncomfortable. Um, so I think the way the system is going to be executed, changing lanes, slowing down, going through inter going through interchanges on the highway. I think as well as the way that uh UX works with consuming media and streaming and doing video conferencing and all the other things you're going to do, I want to do that. N/A All all of that together. Uh, you want to be the best, not the first. What about um supply chain? Okay, that has been that's a sexy topic believe it or not. Yes. And it's become the bane of your existence sometimes, right? But that's okay. Um you know at Hasslam College of Business where I am now um that we have the number one major supply chain is the number one major in the nation for graduates and number two in the nation for undergraduate. Wow. Congratulations of public universities. Congratulations. So that's a big deal to us and I know we're going to have lots of students that want to come learn from you at Ford. Yeah. I would say of all the the seuite jobs that people should aspire to if you want to make a difference in our society, I would pick one. Supply chain. Now what what was your major undergrad and what would you do? General business. I would go right into supply chain. Look you you got to think about it. Think about it. Especially in a company like Ford, our thousands of parts are coming from all over the world. A supply chain expert has to know about all the geopolitics. They have to know about technology. They have to know the rare earths and the things that that where you have concentrated risk for your supply chain. And it's no surprise to me that Tim Cook N/A and many of the CEOs in great companies today come from a supply chain background. No surprise at all to me because the the the leadership required to be world class as supply chain is the same capability you need to run a company. And so supply chain is big to how you run this company. It's integral to your company. Yes. Is it also important to our country? essential. I mean, I don't I when I talk about the essential economy, this is adjacent to that. I don't think most Americans have any idea how scary our dependency is on certain countries if we were to get into war. Let's just take that extreme situation. I I saw your interview with Jamie. That's something Jamie always brings up is war because it's a reality of our modern life. Well, we don't have any battery raw materials processed in our country. We can mine lithium, we can mine, you know, nickel, we can mine cobalt, but every all the processing goes back to China. All of it and so risky. It is. It's incredibly risky. I mean, our whole society runs on batteries now. The whole grid is backed up by batteries. People don't realize that, but they will if something goes wrong. And to get the raw materials that go in batteries, you got to go to China. That's just the beginning. Semiconductors. Well, we're getting serious about on uh onshoring semiconductors, but they run our whole society. Mature node. Um so older semiconductors, transistors or um diodes that run our wiper system or your door regulator for your window or your vacuum cleaner, your coffee maker or anything in your life. That all comes from overseas. And we found out in the chip crisis how dangerous even a week of interruption can be to our industrial companies. Um and and magnets, rare earths, we realize magnets go into a car. We have magnets in every motor. Your wiper motor, your door motor, your window motor, your car. Yeah. Yeah. Sorry. Everything there. There are hundreds hundreds of magnets in that car. And if we want high power magnets that take don't take up a lot of space, you know, pretty old technology, we have to get a 100% of that rare earth from the U from China today. Those are all basic things. How are we going to deal with that as a country? Do I work with the DoD and the government and academia to solve that problem like the essential economy? What are we going to do to change things? Now, Ford, thankfully, is N/A a company that isn't going to just sit on the sideline. We're going to make change. We're big buyers of all those content. We hire lots of factory workers. We're going to do our part, but even Ford can't do the whole job here. Um, so supply chain is really the essence of our modern society today. and all the devices we depend on, all the products we love, someone in supply chain made that happen. I can't think of a more exciting part of business functionally to go in. When I was growing up, it was finance. It was, you know, the revenues are marketing. Yeah. No, supply chain. You know, remember the graduate plastics are the future. I would just say supply chain is the future. That's funny. We like that. At Hasslam College of Business, you have been reinventing Ford almost since you've been here. Yes. What do you want the Jim Farley era to symbolize? I know it's still going. Yeah. We're not looking back, but what is what's important to you for the Jim Farley era? I I want um I want to restore the company's dignity globally. I want Ford to be the most respected industrial company in the country. Um, and the most important mission statement for us is those people in Tennessee that we give them the life that my grandfather had that Ford gave my whole family. That's poignant about your family. Let's bring up another family member who you know I can't let you go without talking about your cousin Chris Farley. Oh, Christopher. Yes, Christopher you called him. Okay. So, um he's the late actor and comedian. Yes. Who caused who brought so much fun? Yes, he did. To watch. Yes. And you had a strong relationship with him. Yeah. I wound up being on the West Coast and as Chris got more famous, he wound up being I mean, we grew up together. We were a large Catholic family. We had a lot of family reunions and they didn't always end well. But, you know, we like most families, you know, we did a lot to together and our family, we moved around a lot, but our family is my mom was from Michigan, my dad was from Wisconsin. And so, we'd get together in the summer uh somewhere in the Midwest. And, you know, I adored his family. His mom and dad um you know, they were a big part of my growing up and my ethos as a person. And you know, Chris was always a a bit of a puzzle. Um, he was younger to me and you know, I I kind of was always working, bit boring guy, but he he would he always had uh a great story. And uh so um but when Chris became really successful in Saturday Night Live, he would come to the West Coast and you know, we would spend a lot of time together. I remember going to Jay Leno's first appearance on Jay Leno. Um he N/A said, "Yeah, Jim, could you come with me?" And a couple movie openings um with his family and um there were times when you know had to look after him a little bit because he struggled with the duck addiction. Of course. Yes. Yes. Many people in my family have and you know so many families and uh I mean who hasn't been touched with that? So, you know, Christopher, um, yeah, I'm kind of I I think there's so much to say. Um, I think people are always kind of surprised that, you know, we're we're related because, you know, even though you could see facial features that are similar, I'm not funny at all. And um, you might have a little bit of humor there. Come on. We all kind of grew up in the same Irish family, so we're a little cheeky. And uh we always like to get get away with something. And I was really happy for Chris um when he became successful, but for a lot of people, another reminder for me, uh success can be a burden as well. And you have to handle it the right way and you have to remain true north. And I think that was something that Chris tried to do to be that every man uh with his comedy. But um when the lights came down, you know, there were there was there were lots of distractions for him as we we all can imagine. But and I think I don't know this for sure, but sometimes comedy can come from complex people. You know, John Candy, I mean there there were really funny people, but the humor comes from a place and a dark place potentially. And Chris was so talented, you know. I mean, in our family, yeah, I I just had so many experiences where I laughed so hard. I'm sure, you know, harder than you can even imagine. Now, you recent you recently opened um an addiction N/A center or something. And I know that's one of your favorite Yes. My my number when I my number one charity my grandfather and my uncle actually brought me to downtown Detroit when I came here on holiday in Christmas. We work in a old soup kitchen. Remember when they were called soup kitchens and they were homeless people? This is in the 70s and we're Catholic so that's part of you know the holidays is you go and work in a soup kitchen. Well, who would have ever imagined that I'd come back to Ford and on the weekend I want to go into the same soup kitchen that I went to when I was 16 as a visitor with my grandfather who he he and and my uncle would go there all the time. And not just when on vacation, but all the time. So, I fell in love with this place, Pope Francis Center, run by Jesuit. I went to Georgetown as a Jesuit. I love the Jesuits. They're very curious and um it was interesting because you know the food is like a band-aid. Yes, people need food, but really the way Pope Francis Center thought about the homeless problem is we got to address the whole person, addiction, um legal advice, um you know, everything, cleanliness, um medical issues, mental illness, and you know, our society can't deal with that. So in and if you're homeless in Detroit, you choose to live on the street. And and the aha moment for me was I met a person that they were put inside and they slept outside. Because they chose to live on the streets. They didn't want to be inside. N/A I say that because I believe we we've created here the first transition center to really solve homelessness, which is you take someone for six months or a year and you deal with all those root causes. They're a long way down range on their life. Those problems have been there for a long time. You got to unpack each of them and they're all intertwined. And then we give people, you can you can um sleep on the heated sidewalks, but you won't get beat up because it's on our property. Or you can stay inside, but you're going to get com every resource you can imagine, hundreds of thousands of dollars worth of resources. And then we'll see how it goes. And if you do your part in six months, and we'll do our part, maybe we can solve each of these people's issues. And um in that um in that uh transition center is the Chris Farley room where everyone who goes through addiction um can look up and think about his struggles just like their struggles. We've talked a lot about all the things that could keep you up at night. What gets you up in the morning? uh working at Ford, my family, um my life. I lost a friend like most of N/A us my age. I lost a friend and and he he died slowly and I remember asking him, "What will you miss?" You know, it's interesting when you talk to someone who's alive that knows they're not going to make it late in his life. I asked him that question. He looked at me, he goes, "Jim, I'm going to miss the simplest things you can't imagine. I'll just miss my life." That's that's what I get up so blessed to lead Ford, to be here with you, to talk about Ford's journey, to be a father, a husband. Um, that's what gets me up in the morning. I can't imagine doing anything else. I can't imagine you doing anything else. Um, this show is called Office Hours Business Edition. So, I have to ask you, if you could have office hours with anyone, N/A be in a closed room talking to anyone, who would that be? Yeah, that's interesting question. Um, boy, you got me on that one. That's a good one. With my current life, it probably Jamie Jamie Diamond. Y'all already know each other, though. I know, but I haven't had office hours with him. I talk to him as much as I can. I had office hours with you did. The The reason why I say that is um Jaime's been through so much. He's he's led in so many different circumstances and he's had so many different challenges in his life and he just sails through it. And I think I would learn a lot from him. But of all the people, yeah, I'd like to have my grandfather back. Wouldn't you? Yeah. I mean, it's where it all began with you and Ford. Yeah. I have his um I have his ID, his employee ID, his factory ID. It's very Ford story. When I joined the company, I N/A said, "My grandfather worked here." And and they said, "Well, tell me more about him." I gave name and all that stuff. And they they said, "You know, your father's a your grandfather's the 389th employee we've ever hired. He's one." And now you have 180,000. Yes. No, but he was employee 389 from the beginning. From the beginning. We've had millions and millions. And they said he's one of the earliest employees we have records on. And uh you know, he had nothing. And this picture of him when he was probably 15, I'd never seen him that young. He was always an old man. And I put that's on my desk today. Oh yeah. And um and the simple reason is because he went through the depression. Um and he whistled through life. He whistled his whole time. Like I never saw him upset, never saw him mad a few times, but more than less than most. Um, and I wish he could see um what we've become as a company and what you've become as his grandson. Well, for me, he'd probably just say get back to work. Well, I'm going to let you get back to work. Thank you, Monica. So, thank you so much for joining me. Thank you so much. It's such a treat. I'm so proud of everything you're doing now for our country. Um, I'm I'm so excited to hear about this supply chain. Um, you know, the business school's really got something there, I think. And, um, I appreciate the time together. Thank you. Thank you.