00:00Let's kick it off, Jim. I mean, it is such an incredible feat, not only coming back from
00:08the slide that you were in to take number one, the number one spot. I mean, number two or number
00:13three would have been impressive. But beating Toyota, beating Honda, they're legendary for
00:17quality. How did you actually achieve that? Well, it took us four years of hard work to
00:23be an overnight success story. You know, it's been just an amazing culture change at Ford.
00:30Literally, Matt, every one of our engineers has been in the plant. Every one of our supply
00:35chain teams are in our suppliers. We are paying attention to every detail. It has taken a few
00:42years to get there. But I think it's really about the culture of putting quality before
00:48profits, before anything else. And that really is what's exciting about this, because now what
00:54I'm seeing is the team really focusing on long-term durability.
00:59So was it your team? Was it an employee, a labor issue? Was it, you know, technology? Did
01:07you use AI? Was it factory processes? Like, can you get into specifics of how you did it?
01:14Yeah. If you were to visit today the Rouge plant where we make the F-150, Matt, what you would
01:20see is a whole control center around data and quality data. So we measure the torque of every
01:27one of our fasteners. We have AI tools, revision systems. But most of all, it's just old-fashioned
01:34hard work of our team members all working together to pay attention to the very small details that will
01:43make a difference between a perfectly built Ford and an okay-built Toyota. It's just an incredible
01:50attention to every single detail.
01:54So, I mean, it's interesting now that we're in the age of AI and we're talking about this
01:58technology killing jobs. But it seems like, in your case, it's really experienced human workers that
02:05made the big difference.
02:07It did. I have to say, the process coaches, the area coaches, you know, they get up every
02:12morning. They look at the last shift's quality data. We look at how many vehicles are repaired.
02:18And we work that process every moment of every day. Every employee walks into any one of our plants.
02:25They know exactly, are we winning or are we losing yesterday and today? Everyone is fully aware
02:31of where we stand. We know exactly where Toyota is. We knew exactly how to, you know, where we need
02:37to
02:37get to beat Tundra and Super Duty better than any of the other domestic competitors. And so everyone
02:45is aware exactly the quality that's coming out of our plant in any particular shift every 50 seconds.
02:53And that is that human motivation to pay attention to everyone. Everything is amazing. Look, we make
03:0085 percent of our vehicles in the U.S., Matt. That means these are U.S. factory workers versus even
03:08our
03:08domestic competitors. They're some of the biggest importers in the U.S. We're not building these
03:13vehicles in South Korea or Japan. These are American workers beating Toyota and Hyundai and our
03:19domestics who import their vehicles. We beat them all with American workers with the attention to
03:27detail. It's an incredibly compelling narrative. I agree. Of course, being at Bloomberg, we're focused
03:32on the numbers and quality issues, recalls and the like had dragged down profits and margins to some
03:39extent over the past few years. Can you quantify in dollar terms how much this will contribute to your
03:45recovery this year? Hundreds of millions of improvement. We're seeing our warranty coverages
03:52come down. We're seeing our recall costs come down. These are all contributing to literally hundreds
03:58and hundreds of millions of dollars of a tailwind for Ford on cost. But we didn't stop there. We also
04:04negotiated our parts costs with our suppliers. We've looked at all of our billed material and even our
04:10manufacturing inventory in our plants and all our manufacturing logistics costs. Imagine for Ford Pro
04:15it's the most important. You've got incredible growth there. You've got double digit margins. You've
04:19got 30 percent subscription growth. Correct me if I'm wrong on any of those numbers. How important
04:24is this for Ford Pro and does it change the picture at all? Good question. I would say for Ford
04:31Pro
04:31really what this means, bill Ford Tough really means something to our pro customers on the vehicle side.
04:37But what we're really seeing there is an obsession with long-term powertrain durability. We're testing
04:44every every engine two to three hundred thousand miles with transmissions, axles, everything. So
04:50those pro customers use their vehicles literally 90 percent of the day to run their business. They
04:55can not only be happy with 90 day quality but also five to ten year quality. That's what it means
05:01for
05:02our pro customers. In the pro business I'm really interested in the subscription
05:07growth that you've seen. Can you give us targets there? Are you looking at even stronger growth as
05:14that business grows? We are seeing quarter over quarter, as you said, between 30 and 40 percent
05:21growth. The margins are over 80 percent on our gross margin side. Here's what people are buying.
05:26They're buying productivity. These vehicles, you know, they run their business. Plumbers, electricians,
05:32ambulance, police. You know, these customers, they use the data off the vehicles. They teach the drivers
05:38how to be easier on the brakes, to accelerate better, not to go past the speed limit. You know,
05:44to do telematics and route the vehicles efficiently to their next job. All these productivity software tools
05:51that we offer customers allows them to reduce their cost and improve their uptime so the vehicle is never
05:57off the road. We're now able able to send them prognostics or predictive failure of vehicle components
06:04so that their vehicles are never off the road. They can do that predictive maintenance, you know,
06:08before a problem happens. And they absolutely love we're approaching a million subscriptions now for pro.
06:14So and at a time when we see, you know, eight hundred billion dollars of hyperscaler capex this year alone
06:21to build out
06:22U.S. Infrastructure. Tell us what kind of opportunity this is for Ford and how much you're able to participate
06:29in that in that data center build out. Well, I have to say in the old days we used to
06:34look at housing.
06:35Today what we look at is construction. The construction trades are booming. Super duty, transit, exportable
06:43power to the job site. This is what customers want. They want new vehicles that are efficient
06:48with software, but also what they want is storage batteries. We're now going to be one of the biggest
06:54domestic makers of energy storage batteries. Now we're scaling up that plant. We actually have two
07:01plants. We'll have 20 gigawatt hours of energy storage and not only for the sustainable grid and the grid
07:07reliance, but also hyperscalers. They're you. They're going to use our battery electric storage batteries
07:14to run to really run our country, help run our country. And between pro and best, our energy
07:21storage business, we're very well positioned. Have you got contracts with any of these big
07:28hyperscalers, Microsoft, Amazon, Google meta that you can tell us about, Jim? Yeah, good question. Well,
07:35we're in the middle of building out and converting these batteries from from vehicle batteries to energy
07:41storage batteries, which are actually very different chemistry wise format wise. Matt, to your point,
07:46we've had literally hundreds of customers now in the contracting phase. We announced one large one,
07:53EDF, and they've committed about five gigawatt hours over the course of several years now. And we're in the
08:01process of contracting many, many customers. It's a mix, Matt. We see sustainable grid, you know, wind and
08:08solar. We also see hyperscalers building out. They want that 100 percent uptime on their facility.
08:14The Ford batteries are really useful for that. So it's a mix of customers so far. If I mean, since
08:21we're on Bloomberg, you're talking to every single investor on the planet. So you can share financial
08:26information with us. That's material. Is this the right time to boost your EBIT target for the year?
08:33A great question, because we're right about right about a quarter to earnings. I don't want to give
08:39a preview. I would love to love to get everyone insight into to where we're running. But I would say,
08:45you know, good, solid progress at Ford in our base business, but also our non vehicle business.
08:50We're just seeing growth across the board. Boy, I got to tell you, I love American consumers. They
08:56absolutely love our Ford trucks. So, you know, on the sales side, you've seen two months of sales,
09:03very strong results so far. We got out of the escape business, but still our sales are growing.
09:09And actually, I really believe June could be a breakthrough year, a month for Ford sales. So
09:15we'll see how it ends. I have to say that I love watching Max Verstappen. And it's been frustrating
09:21in some races, but he's been incredible to watch. So I'm rooting for you. And Hadjar getting a podium
09:27was amazing. Can you confirm that they're going to drive for you next year as well?
09:32Well, Max has, I think, Isaac, we're in good shape. Max does have a specific in his contract
09:38around around the car being competitive. But I think, you know, he's world champ, multiple world
09:43champion. As you said, Matt, he'll have the option to choose that. What I'm most confident,
09:49and it's a bit of a dilemma for us. But the FIA and the Formula One said that the Red
09:54Bull Ford
09:55powertrain was the most powerful powertrain in the paddock. Unfortunately, that doesn't allow us to,
10:01you know, make as many changes as our competitors who are behind us. But I am really proud of the
10:06Ford team, that a brand new powertrain that all the competitors are struggling with,
10:12that we at Ford were able to partner with Red Bull and give Max, multiple world champion,
10:17such a great powertrain. But we got to put the whole package together. We got a big race coming
10:22up this weekend. And we're going to do everything we can to give Max a world championship caliber
10:28powertrain, power unit. And then the rest of the team has to do the work. Boy, if we give it
10:33to Max,
10:33he will definitely deliver. How about some of those qualifying efforts this year?
10:37He is just amazing. He is amazing. And, you know, I was with you in Le Mans last year when
10:42you
10:42announced you're coming back to the Hypersport class in 2027. Will you get Max behind the wheel
10:48of that car? Well, yeah, Max has been driving a Mercedes at the ring. And, you know, it sure would
10:55be great to see him in a Ford. You know, look, we won four years in a row. We're the
11:01first American
11:01company win Le Mans. We're the only Ford American company that had a chassis driver and an engine by
11:09an American company win Le Mans. We're still the only one. And we're going back next year to win.
11:15It would be great to have Max in the Ford hypercar. You know, I'm going to have to really put
11:22on my charm
11:22school act to get him in that car, though. I think you can do it, Jim. I think you're capable.
11:27You can pull that one off. If anybody can, it's you.
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