CEO Jim Farley tells industry analysts the automaker has ‘been stuck in a box’

Ford CEO Jim Farley climbed out of a Lincoln Navigator at 6:31 a.m. Monday and headed into the Ford Experience Center in Dearborn, where hundreds of industry analysts and reporters were gathering for his much-anticipated speech designed to inspire investors.

Ford executives provided highlights of what to expect from the 120-year-old automaker, ranging from where costs will be cut to how profits will be generated apart from car sales, in the first major in-person Capital Markets Day event since 2016. The program, also streamed live online for investors, ran nearly three hours, including Q&A from industry analysts.

Below is a snapshot from: Farley: Kumar Galhotra, Ford Blue president: Doug Field, advanced product development and technology officer: Lisa Drake, Ford vice president of EV Industrialization for Model e; Ted Cannis, CEO of the Ford Pro commercial business segment, and John Lawler, chief financial officer.

Big promise

“A seven-passenger SUV that’s like your own personal bullet train,” Farley said.

Changing dealership

Non-negotiated prices will be part of improving the customer experience for electric vehicle shoppers. Lower distribution costs for Ford means reduced physical inventories of electric vehicles, Farley said.

Different marketing view

“Focusing on loyalty, customer communication, building community rather than spending billions on TV advertising and broadcast media,” Farley said. “So we don’t have to spend $500 a vehicle on TV advertising.”

Getting unstuck

“Ford has been stuck in a box with thin margins, weak growth and low valuations. You’ve been in that box with all of us. It is now time to break out,” Farley said.

Ford CEO Jim Farley speaks to a packed room of industry analysts and media while standing in front of an image of company founder Henry Ford at the Ford Experience Center for Capital Markets Day in Dearborn on May 22, 2023.

Weaknesses targeted

A closely watched annual automotive industry study released Monday found Ford has sunk “significantly” over the past year with its supplier relations in areas including trust, integrity and long-term strategy.

Ford plans to lower warranty and recall costs while also addressing supply base instability and factory costs, Galhotra said.

Kumar Galhotra, president of Ford Blue, talks with John McElroy, host of "Autoline After Hours" webcast and podcast, prior to the Capital Markets Day at the Ford Experience Center on May 22, 2023.

What kind of cuts are being made now

Reducing the design complexity in the Explorer, for example, has reduced costs by about $7 million a year. “We’ve identified half a billion dollars in annualized savings,” Galhotra said. The F-150 and has also seen cuts to variations with design changes, allowing for more simplification and lower costs.

What the future looks like

“Badass,” Field said.

Doug Field, Ford chief advanced product development and technology officer, leads electric vehicles and digital systems within Ford Model e. He is seen here speaking on Capital Markets Day to investor analysts at the Ford Experience Center in Dearborn on May 22, 2023.

Battery size

“There’s a bit of an arms race to shove bigger and bigger batteries into large EVs to try and make them like ICE vehicles,” Field said. “But the real battleground in electrification is about efficiency. Efficiency is like God’s work. … This obsession in EVs is more than engineering. It’s like a religion,” Field said. Later, Farley said. “We’re trying to make the smallest possible battery for competitive range.”