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Ford’s CEO on the Essential Economy and Its Untapped Potential — Transcript

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0:00Please welcome to the stage Ford CEO Jim
0:03Farley.
0:04[Applause]
0:08Hi everyone and um thank you for
0:11welcoming back to Aspen. I love this
0:14gathering because a lot of ideas flying
0:16around but it seems like a lot of them
0:19also take root here. And that's what I
0:21wanted to say quickly before Walter and
0:23I have a a discussion. Um I I wanted to
0:27make a few comments to to everyone about
0:30the essential economy. Um and how I
0:33would define that is everything that
0:36kind of gets built or moved or fixed. Um
0:40it's about a 12 billion dollar economy
0:43in the US and involves almost a hundred
0:45million jobs. Um, and it's really the
0:47backbone of our society and it's
0:51important, but no, not not everyone
0:53notices it until it doesn't work. Um,
0:56I'm interested in this kind of uh work,
0:59this economy, because
1:02uh, like so many Americans, I had a
1:05paper out and I swept floors uh, in a in
1:10a car shop. I put myself through
1:12graduate school at a car restoration
1:14shop. Um, uh, I still love working on my
1:18cars no matter what my job is. Um, I
1:21would just say it's kind of who I am and
1:24my friends. And, um, when you spot a
1:27lineman in a bucket truck or a plumber
1:31on a service call, um, or an EMT racing
1:35to the emergency,
1:37um, odds are they're driving a Ford. And
1:41so these are our people at our company,
1:43too. Um, and yet the essential economy
1:46is in a world of hurt, maybe more than
1:49most people expect. We're short 600,000
1:54factory jobs uh, workers in the US.
1:58Okay. Almost a half a million
2:01construction workers,
2:03400,000 auto technicians that work in
2:06dealerships to fix the cars that we all
2:08drive.
2:10And um the white collar productivity in
2:14the last few years has jumped almost
2:1630%. Meanwhile, the productivity in this
2:19essential economy is actually fallen. Um
2:23so not only do we have a huge hole, the
2:26productivity is getting worse and we
2:28can't ignore it. Um, on a personal
2:31level, a cracked bridge or a blown
2:34transformer,
2:36uh, or an understaffed construction
2:38site, um, they have a huge impact on our
2:41daily lives. And, uh, with so few people
2:46for these jobs, um, this is going to be
2:48painfully expensive to fix when it all
2:51falls apart.
2:53Meanwhile, obviously AI, battery plants,
2:58you know, they all seem really exciting,
3:01but they all need HVAC installers, they
3:04need electricians,
3:06uh they need welders, and in many of
3:10these boom towns around the country, um
3:12half of the new jobs are these essential
3:15worker, essential economy workers. Um
3:18the Bureau of Labor Statistics sees up
3:21to 60% growth in skill trades.
3:26And if productivity in these sectors uh
3:29had simply matched our historical levels
3:31for the overall economy, our GDP would
3:34be 10% higher and the average worker
3:37would be making about $5,000 more. Um so
3:41what do we do about it? Well, I think um
3:43there's a couple pretty simple things.
3:46Um, but they're hard to do. Modernizing
3:49permitting in this country, it's very
3:52very difficult to permit and red tape is
3:55absolutely the bane of of this economy.
3:58Uh, rewiring our working our working
4:01people funding. Uh, we spend less on
4:03vocational let me say this really
4:05carefully. We spend less on vocational
4:08training in our country than every one
4:10of our peer countries.
4:13And we we aren't training for 2050. were
4:16training for 1950.
4:18Um, robotics,
4:21um, AR, this is what plumber, uh,
4:25productivity needs to focus on. Um, just
4:29think about how cloud transform coding,
4:33but we don't have the same plan for the
4:35essential economy.
4:38You know, we're I mean, my dad grew up
4:41on the GI bill. My grandfather was part
4:44of the WPA. Uh we had the Ford trade
4:47school, but these don't exist anymore.
4:51Um this is Ford. Henry Ford trained all
4:54of his workers like my grandfather. Um
4:58they didn't know anything, but they were
5:00skilled and they had a great future. And
5:03with all the Americanore, it would be
5:06great to have something for the
5:07essential economy in our country. Ford's
5:11doing what we can. We're funding trade
5:14school scholarships,
5:16uh, technician boot camps. We have
5:18financial support for people who want to
5:21go into the HVAC business if they're an
5:23HVAC professional, but we can't solve it
5:26this ourselves. And the idea festival is
5:30is is that and actually I'm here for a
5:33specific reason. Um,
5:36talk to the EMT,
5:39talk to the person in the booth, ask
5:42them what their life is like, how
5:44they're trained, what are they going to
5:45do, um, what is the opportunity.
5:49And my only comment really is that we're
5:53going to bring the best thinkers in this
5:55area to Detroit this fall and have a get
5:58together in Michigan Central Station,
6:01which if you haven't heard about, you
6:02should go do research on it. Um because
6:05we want to really rev up this part of
6:07the economy and we don't want to
6:08delegate it to someone else like the
6:10government or academia. We want to do
6:12something ourselves at Ford. Um
6:16my grandfather's Emma Tracy. That's a
6:18picture of him in 1918. He was a um he
6:23was a 389th employee at Ford. Uh he was
6:27an orphan. He didn't know his parents.
6:30He grew up in Dearbornne. He rose
6:32through the ranks as an hourly worker.
6:34He he had enough money to barely buy a
6:37dealership. And then he became a
6:39supplier for Ford. He worked until he
6:41was 95. and his for job put my mom
6:45through college and really changed our
6:47whole whole life. So look around the
6:51room at some point almost all of your
6:53families came from these kind of jobs.
6:57Maybe it's one of your parents or
6:59grandparents.
7:01Maybe um you worked a job like the
7:03essential economy like I did. Um,
7:08there's more than one way to the
7:09American dream, but our whole education
7:12system is focused on four-year
7:14education.
7:16Um, hiring an entry worker at a tech
7:19company has fallen 50% since 2019.
7:24Are are really is that really where we
7:26want all of our kids to go? Artificial
7:29intelligence going to replace literally
7:31half of all white collar workers in the
7:33US.
7:34Um, you know what job is?
7:38Well, I mean putting up that power line,
7:41building that factory, laying a new
7:43water system. Every day we see more and
7:45more stories in the news about people
7:48that are finding their own way into
7:50skilled trades. The new Harris poll even
7:53found that a third of Americans now
7:55would recommend trade school, prefer
7:58trade school over a traditional
8:00four-year college degree. We all sense
8:03that America can do better than we are
8:05doing. Um, we need a new mindset, one
8:09that recognizes the success, the
8:12importance of this essential economy,
8:15um, and the importance to our vibrancy
8:17and sustainability as a a country. So,
8:20with that, I'd like to invite Walter up
8:22on stage and we can have a conversation
8:24about this and some of the other things
8:26that's going on at Ford. Thank you,
8:28Walter. Great. Thank you.
8:33You know, we opened ideas festival this
8:35year uh Fared Zakaria and myself having
8:38a bit of a disagreement. I had said I
8:40came full circle from my original way of
8:43thinking about the global economy and
8:46that free trade was going to be a boon
8:48for everybody and free movement of
8:50people and I came to the conclusion that
8:53we had to rebuild manufacturing and the
8:56essential economy here and that even
8:58tariffs could be a part of that. How has
9:00your thinking evolved on things like
9:02that? I I would say similarly, you know,
9:06when I came into the business community,
9:07it was like free trade and now I look
9:10I've worked all over the world in the
9:13auto industry for multiple companies and
9:15I've seen so many countries put their
9:18foot on the scale of the economy and
9:21focus on local manufacturing. Japan,
9:24Germany, now China, and they created all
9:28these great jobs. But the argument is
9:29that well we don't want to be a
9:31manufacturing company. It's a country.
9:33It's only 8% of the economy. We'd rather
9:35do the services and the software. Tell
9:38me what's wrong with that argument.
9:40What happens if you have to defend
9:42yourself?
9:44What happens? What is Google going to
9:46make the tanks? Mhm. Um you know to be
9:50totally frank um we've forgotten a lot
9:52about that. And I think we've talked a
9:55lot about energy independence. We need
9:57to start talking about industrial
9:59independence. It's very very important.
10:02People do not realize how dependent we
10:04are as a country uh on making things on
10:07other countries. We we cannot get any
10:09high-powered magnets without China. We
10:12cannot get Is that hurting you? The high
10:13power magnet. shut down. We shut down um
10:17plants for the last 3 weeks because we
10:19cannot get um we cannot get high power
10:22magnets go into your speakers and the
10:25order system, your seats, motors, your
10:28wiper motors, your door motors. Um and
10:31we can't make that stuff. And so you
10:32think if we start putting at least
10:34moderate tariffs, we might rebuild an
10:37essential economy sector. And also other
10:40countries do it. So, we are fighting uh
10:43with our hands behind their back. In
10:46many cases, um our competitors have 5 to
10:50$6,000 of incentive that they're
10:52exporting. Today, China has a 20 million
10:56unit market domestically, but they have
10:5940 million units of capacity. They can
11:02export. Wait, there's capacity for
11:04electric vehicles or vehicles. Okay.
11:06they can make they don't have to build
11:09one more plant and they can serve all of
11:11North America and part of Europe without
11:13any more plan. Um so we are in a global
11:17competition and these jobs are really
11:20great jobs. A job at Ford is 150
11:23$200,000.
11:24It's a transformational job for people's
11:27lives and we have to really understand
11:30what it's going to take to not just have
11:33modest tears to to have a even playing
11:36field like you said, but also to
11:38recreate
11:40um
11:42critical minerals, battery raw
11:44materials, manufacturing grade
11:46semiconductors. Oh, it's so exciting. We
11:48have all these new semiconductor plants
11:50in Arizona. They're making advanced
11:52nodes for AI, but most of the silicon
11:57that goes into industrial products that
11:58we all buy are manufacturing grade.
12:00They're 10-year-old. That all comes from
12:03Taiwan and increasingly from China. We
12:06won't be able to make anything if we get
12:09in a series. How many trips to China
12:10have you made in the past year? Oh,
12:14I would say six to seven. Six to seven.
12:17Yes. And what are you seeing there that
12:19we should learn from? It's the most
12:22humbling thing I've ever seen. 70% of
12:24all EVs in the world, electric vehicles
12:27are made in China. Uh they have far
12:30superior invehicle technology. Huawei
12:33and Xiaomi are in every car. They have
12:36facial meaning cell phone technology.
12:39Yes. Connected to their cell phones.
12:40Yes. You get in, you don't have to pair
12:42your phone automatically. Your whole
12:44digital life comes is mirrored in the
12:46car. You have an AI companion that you
12:49can talk to chat chat GBT equivalent in
12:52China to your all the automatic payment
12:54is already there. You can buy movie
12:57tickets. It has facial recognition so it
12:59knows who's in which seat and which
13:01which media you like. Wait, why don't
13:03Ford cars have that? Would you need to
13:05deal with Apple or Yeah, because Google
13:07and Apple decided not to go in the car
13:09business. and and even beyond that um
13:12their cost their quality of their
13:15vehicles is far superior um to what I
13:18see in the west. I mean we are we are we
13:22are in a global competition with China
13:25and it's not just EVs and if we lose
13:27this we do not have a future Ford. Well,
13:30you did talk about EVs and how much
13:32they're doing there. To some extent, it
13:34seems that Ford is at least taking its
13:38foot off the accelerator for electric
13:40vehicles. Is that right? I would say
13:42we're just changing our profile in line
13:44with demand. We've been number two to
13:46Tesla for three years, but we're also
13:48number three to hybrids to Toyota and
13:50Honda, which people don't know. We're
13:5280% market share on hybrids for trucks.
13:55The F-150, which is the bestselling
13:57vehicle in the United States for 47
13:59years, 25% of all of them have a hybrid
14:02system. And why are buying why are
14:03people buying F-150 hybrid? Well,
14:06because Pro Power on board with a hybrid
14:09F-150, you can power your house for 6
14:11days when the grid goes down. Mhm.
14:13People are really interested in in
14:15energy independent in in Texas, in
14:18Florida, and California. So, I would say
14:22we're putting more energy and more
14:24investment in in hybrid and we're
14:26redirecting our capital because we saw
14:28what happened in this first inning of
14:30EVs. We're going super affordable and
14:33commercial. Um, we're not going to be
14:35investing in 50 to $60,000 SUVs, $30,000
14:40EVs and commercial EVs cuz that's where
14:43we think the market's going. So, super
14:44affordable. There aren't that many of
14:46them here in America. No, no, there
14:48aren't. There's actually really none.
14:50And the ones that are here are kind of
14:52compliance vehicles. The manufacturer
14:54creates them to kind of create EV
14:56credits so they can sell trucks. They're
14:58not great cars and they lose a lot of
14:59money. So, we're we have a Challenger
15:02project in the company which hopefully
15:04we'll talk about publicly soon where
15:07we're going to build the Model T of EVs
15:11with a small group of skunk works team
15:14in California. Wow. So, that's what
15:16Henry Ford would have had you do. He
15:18did. When Henry Ford decided to
15:20democratize the V8 in 1932, he took 10
15:24people and they quit the company. He put
15:26him in Greenfield Village and they
15:28developed 20 or 30 different versions of
15:31V8 until they settled on the one. They
15:33had to quit the company. Then when he
15:35got the design right, he threw it back
15:37into an industrial system at Ford and we
15:39were the first one to industrialize the
15:40V8. So if you have Skunk Works, they
15:42could do a really affordable car. Would
15:44you keep that in America? Yes, we'll
15:47build it in America. It's been
15:48engineered in America. Um our supply
15:50chain though, you know, this is one of
15:52the big debates about the the tariffs.
15:55Look, I mean, it's $800 a month for an
15:57F-150 now. And you know, if we built
16:01every part here, not sure we could even
16:03a wiring harness, fasteners, there's no
16:06suppliers in the US. But even if we did,
16:08it'd be $900 a month. So, the tension on
16:12tariffs are how do you how do you find
16:14the right fair playing field, but still
16:17make your vehicles affordable with uh
16:19import parts? So, what I like to say is,
16:22hey, you know, let's create a um a fair
16:25playing field for the finished vehicle
16:27for parts. Let us import parts from
16:30around the world. Let let us keep Mexico
16:33stable in other countries. And that's
16:35what we're working through the
16:36administration on. And when you say
16:38working through the administration on,
16:40how do you deal with them on
16:42understanding how tariffs should and
16:44could work and how supply chains and
16:47dealing with China and Mexico should
16:49work? It's been an interesting process,
16:51a very intense one, uh, with a lot of
16:54dialogue. I would say the president's
16:57priorities are very much in line with
16:59Ford. You know, people don't realize
17:02half the cars in the United States are
17:03imported through a port or through a
17:06train or a truck. Half. About 20 years
17:10ago, it was 80%.
17:12Um, and Ford makes 85% of all of our
17:15vehicles in the US. The biggest importer
17:18in the US is our domestic competitor.
17:20When they went bankrupt, they moved.
17:23They fired more than 20,000 people in
17:26the US. We hired 15,000 since 2007. Now
17:30we have the most UAW workers. So, uh,
17:33yes, we are an outsized company and and
17:36Wall Street criticized us for building
17:38so much in the US. They said you you
17:40make more money. You make a billion
17:41dollars more if you build more plants.
17:44But in Mexico, but we didn't really we
17:47we didn't really think that was the
17:48right thing for our country. And and now
17:50we're in a better position than the
17:52others because we don't import and and
17:55we're also the number one exporter. Um
17:58but you think you can compete on the
17:59affordability field against BYD and
18:02China. The key is innovation. Um to your
18:06point, you know, we took a we we did our
18:09homework on BYD. They're the global
18:11leader in EV volume and we found a lot
18:15of opportunities. Let's say it like
18:17that. I'll give you one example. You
18:19know, um American electric vehicles do
18:21not use LP batteries. They're 30%
18:24cheaper. They they can cycle twice. You
18:26can charge them twice as long in many
18:28cycles without deteriorating. Um but
18:31they are less energy dense, but there's
18:32almost no fire risk. They're really in
18:35and in and China bet on LFP. The West
18:37bet on these lithium batteries and they
18:39have fire risk and they're very
18:41expensive but they are more energy
18:43dense. So one of the things we bet on is
18:46to move to LFP for this affordable
18:48vehicle. But the IP is in China. So we
18:52had we had to localize the IP in
18:54Michigan and that's very difficult. A
18:56lot of lot of politicians focused on
18:58that. But we think that's the best thing
19:00for America. If you do LFP batteries,
19:02sorry to get so geeky on this. Uh I
19:05think of what Elon Musk is doing. It's
19:07not just for cars. You might use it. Go
19:10ahead. Yeah, I would say you're
19:12absolutely right cuz you know we have a
19:14lot of renewable energy now in our
19:16country, wind and solar, but they work
19:18sometimes and they don't work others.
19:20And there's a lot of energy storage that
19:22you need with this renewable, you know,
19:24grid now. And so Ford could get into the
19:27energy storage. We could we could we
19:29could repurpose our facilities, take LFP
19:33technology and make, you know, energy
19:35storage batteries, not just EV
19:37batteries. Um, and that's actually what
19:39Ford does. In COVID, we were one of the
19:41largest PPE producers. No one asked the
19:44engineers at Ford to do that. We just
19:46started making it within a week. We
19:48started making ventilators in World War
19:50II. You know, look what we did for our
19:52country. This is what we do at Ford.
19:55because they great Henry Ford line when
19:57he talked about, you know, giving the
19:59raise to the workers and he said they
20:01said that would be bad for the company.
20:02He said, "No, these are our customers,
20:04too." That's right. He's he was the
20:06first one to um pay everyone $5 a day
20:10and it completely changed the
20:11immigration of our country. Uh Detroit's
20:14a city it is now because of that $5
20:16wage. And it transformed people's lives
20:19like Henry Ford, my grandfather. But he
20:21said to your point, he said, "I'm doing
20:23it because I want my factory workers to
20:26buy my cars." If they make enough money,
20:29they'll buy my own product. It's a
20:32self-fulfilling prophecy in a way. Yeah.
20:35I'm going to pay twice what someone else
20:38um makes, but I want to have the best
20:41people and I want them to be able to
20:43afford a house, a car. That's not a
20:46reality for um during the union
20:48negotiation, I did a lot of gamma just
20:50going to our plants and listening and
20:52the older workers who've been at the
20:55company said, "None of the young people
20:56want to work here, Jim. You pay $17 uh
20:59an hour and they they are so stressed
21:02they got to work at Amazon for eight
21:04hours, then they come over to Ford for
21:06work for 7 hours and then they sleep for
21:08three or four hours and then they go
21:10back and they're barely getting by. So
21:12we we we took every temporary worker and
21:15made them full-time. It wasn't easy to
21:17do. It was expensive, but I think that's
21:19the kind of changes we need to make uh
21:22in our country. And it's it's not easy
21:24because there's a lot of pressure uh
21:26from the financial community. Um but
21:28talk about that because one of the
21:30things that's happened in the past 20 to
21:3230 years has been that the definition of
21:35the economy is to get more wealth and
21:37growth and it's fin you get the
21:39financial community, Wall Street, the
21:41funds all pushing you just for that.
21:44Does Ford have a higher mission than
21:46just you know creating profits and what
21:49would those be? Absolutely. The Ford
21:52family is in their sixth generation.
21:55They don't toot their own horn, but you
21:57know, Ford would not be Ford without the
21:59Ford family. You know, in ' 07 when our
22:02two competitors went bankrupt, we
22:04didn't. The employees said over and over
22:07again, I'm not going to let the Ford
22:08family down. Mhm. Uh I'll come in, you
22:11know, I'll buy my my own um they bought
22:15their own uh supplies. Uh we burn the
22:19furniture to avoid bankruptcy. Um and
22:23and part of that is because our mission
22:25is really I mean every company really
22:28believes in its mission but I guess at
22:30Ford
22:31our mission is more about what we do and
22:34not what we say. Le let's move into AI
22:37for a second since it's been such and
22:39start with real world AI which is
22:42basically autonomous driving. Yes. ADAS
22:45and you were aiming at one point for
22:47level four I think you scaled back a
22:49bit. explain why you're moving away a
22:53bit from autonomous driving and are you
22:55going to do like you did with the
22:57affordable vehicle and surprises by
22:59leapfrogging and going ahead maybe
23:01making a deal with Whimo or Tesla? Good
23:06question. You know, autonomy is a really
23:09um sexy and hard problem as you know.
23:11You've written about it a lot. Um but if
23:14Ford when Doug um Fields came over from
23:18Apple and Tesla, he and I had a series
23:21of honest conversations about where do
23:23we want to make our bet? We don't have
23:25unlimited funds. And we decided as a
23:28company that a cooler problem than full
23:31autonomy in a in an urban setting was
23:34high-speed eyes off. Push a button and
23:38read a book in your car. Get 45 minutes.
23:41That's only on highways. Yes. And the
23:45highway is a hard problem, but not as
23:48hard as what you would say Whimo or
23:50Tesla are trying to do in the urban
23:52environment. But more than more most
23:55Americans spend 20 to 20 to 30 minutes a
23:58day on the highway and a lot of it is
24:01very dangerous and a lot of people are
24:03distracted with their phones. And to
24:06make it safer and to free up time in the
24:09short term, we did student body left. We
24:12took all of our level four funding and
24:14we really focused on this problem and
24:16we're excited to come out with that
24:18technology. At the same token though, we
24:21are really excited about level four. Um
24:24level four meaning what you'd call full
24:26self-drive. Full self-driving with some
24:28kind of geoence. Um and uh I think it's
24:33something that we're looking at really
24:35carefully. You talked to my friend Elon.
24:38Yeah. Yes. I I won't go any further than
24:40that. But uh yeah, I think I think the
24:44progress that Whimo and By way, I didn't
24:46mean to call him my friend. I just wrote
24:48a book about him. Not I'm not his pal.
24:52Um I would say
24:55uh I would say um we recognize that both
24:59of them have made a lot of progress and
25:01this is now a meaning Whimo as well as
25:03Tesla. Yes, both of them. Which one
25:05makes more sense to you? to us Whimo
25:09because it is lidar. Yes. We we really
25:12feel for our brand our people trust
25:15Ford. Um and when you have a brand like
25:19Ford when there's a new technology you
25:21have to be really careful and we want to
25:24have a trusted brand just like Mercedes
25:26and Volvo in the early days of crash and
25:29this is another wave of safety
25:31technology. So we really believe that
25:34Aliar is missionritical. That's a LAR
25:37for people don't know. It's sort of a
25:40light and radar system, not just a
25:42camera system. It sends over a hundred
25:44beams of light that bounces back and you
25:47can see things. For example, a
25:49reflection on the back of a truck or the
25:52sun in the camera's eyes where the
25:54camera will be completely blinded, but
25:56the LAR system will see exactly. You
25:58think you will get to full self-driving
26:00in the foreseeable future somehow? Yes,
26:03I do. Um, but I think it'll for us it'll
26:06be a partnership model. What we're
26:08really focused on, we just finished I
26:10think 40 million miles of hands-free and
26:13it's kind of like a heated steering
26:15wheel. When you first use a heating
26:16steering, you're like, "Well, that won't
26:18be a big deal." And then you're on a
26:19cold day, you're like, "Wow, that really
26:21that's that's like pretty amazing. I
26:24feel warm." Uh, hands-free driving is
26:26kind of the same thing. If you ever have
26:28you never tried Blue Cruise, go to a
26:30Ford dealer. When you let go of your
26:32hands on a highway, you're just like,
26:34"Oh my god, this is a lot more relaxing
26:36than cruise control." But you race cars.
26:40Yes. You're taking your son, you told
26:42me, who's what, 18, 17 years old to
26:44North Carolina in a few days, so he can
26:47be a car driver, do sort of a NASCAR
26:49thing. What do you feel about do people
26:52want to give up the experience of
26:53driving? Is there a moment? That is a
26:55great question. I I kind of think of
26:58driving as one of those things in our
27:00daily lives that you can master
27:03and and it's a very human thing to want
27:06to master something. Maybe walking, it
27:09may be painting, it may be reading. Um
27:12but driving to me is something that a
27:16lot of us take great pride in mastery
27:20and it is a skill. And I I actually
27:23worry about how much autonomy
27:26um how much autonomy is the right level
27:28of autonomy before we start losing the
27:31basic skills of awareness in a car. Um
27:34wow that's very interesting because it
27:36just connects to one of the panels that
27:37just with AI making students lose the
27:41awareness of how to think through things
27:43and so you worry that could happen with
27:45real world AI deeply deeply worry. I
27:48think um driving cars is is um is a life
27:53or death scenario. It is and um we you
27:59know we have to be careful in this
28:01transition period and I don't know how
28:03long it lasts. It could last decades and
28:06decades and we we have to be very
28:08careful. I believe very strongly in
28:12driving a car is a mastery event and
28:15autonomy is fantastic. It can supplement
28:18a lot of the boring miles where people
28:20get distracted, but it can't substitute
28:24good driving. And we have a very serious
28:26driver monitoring system. Uh, and we
28:29struggle with this uh very problem. It's
28:32a very interesting and important design
28:34problem. How do you disengage and engage
28:37as the autonomy comes in and out of a
28:40driving experience? and will it, you
28:44know, reduce the um the mastery of
28:48driving? It's something that as a car
28:50company with our reputation, we have to
28:53be very careful about. You know, one of
28:54the things on your slide that just hit
28:56me was the productivity gains in white
29:00columns, if I'm doing it correctly, went
29:02up 40 some odd percent. And that's
29:04largely due to technology. I mean, I
29:06think technology is defined by things
29:08that increase productivity. But for
29:11essential workers, it's declined. Yes.
29:13To what extent can AI increase the
29:17productivity of essential workers or
29:20will it just wipe out those type of I
29:24think it will help a lot.
29:27But if I could take everyone here on a
29:30run with one of our politi one of our um
29:32plumbers or electricians, you would have
29:35no idea how difficult their job is. Or
29:38if I took you into a Kansas City plant
29:40where it's 120 degrees today, putting on
29:43bumpers and and you have to do it
29:46perfectly every time. We only have six
29:47hours to build a forward. It is a tough
29:50job. Um so AI will certainly help with
29:54you know um billing with lots of menial
29:58tasks that distract. What about
29:59robotics? What about hands- on task or I
30:03think robotics will will substitute
30:06quite a few jobs but that will not um
30:10fill the gap in what we're talking
30:12about. We're talking about millions and
30:15millions of people uh openings for these
30:18jobs. A factory job is complicated. It's
30:21difficult. And so far maybe 10% of our
30:25operations can be roboticized. With a
30:27humanoid robot, maybe it's 20, but it's
30:30not going to be 80. Um, and it will take
30:33a long time to get that kind of um
30:35because the cost of robotics is
30:37expensive. And humans are amazing. I see
30:40humans do things uh in our plant that a
30:44robot can't do. I remember at one of our
30:46plants in Germany, um, we had to figure
30:49out how to close the tailgate and one of
30:52the workers said, one of the workers on
30:54their weekend went out and bought a
30:56bicycle tire and wheel with a wooden
30:58slat and with the kinetic force of the
31:01car going down the uh, line, uh, they
31:04just used the tire to close the rear uh,
31:07tailgate. We could do that with a robot,
31:10but the creativity of someone, I'm not
31:13sure. That gets to the essential
31:16question of our age when it comes to AI,
31:18which is whether it's going to be
31:20symbiotic, meaning humans and machines
31:22working together.
31:24uh the Ada love lace you know 150 years
31:27ago it was the notion that there'll
31:29always be human creativity and its
31:31productivity will be increased by
31:34robotics and technology or in her case
31:37automated looms in the 1840s and then
31:40the other school which is that the
31:42robots will just replace us if you're
31:45dedicated to your vision of the future
31:48how do you take Doug Field and all your
31:50great people that have been at Apple and
31:52Tesla before and We want to use robotics
31:56to increase the creativity and
31:58productivity of our workers, not replace
32:01our workers. I think it's it's really
32:04the essential question and and why I'm
32:07here and why we want to do this in
32:08Detroit. Um I believe that AI and new
32:12technologies have an asymmetric impact
32:15on our economy. That means a lot of
32:17things are helped a lot and a lot of
32:19things are hurt. And when you look at
32:22these openings in our economy, you know,
32:25it is very clear that all the technology
32:27we've seen has left a lot of people
32:29behind. AI will leave a lot of white
32:32collar people behind. And we have to
32:35acknowledge that these new technologies
32:38are great. They'll make a lot of
32:40people's lives better, even people in
32:42the essential economy. But what are we
32:44going to do as a society for the people
32:47that it leaves behind that are valuable
32:50humans that require that for our society
32:54we have to have a plan for sustainment
32:57and we don't have that plan today answer
33:00the question
33:02uh well first what do we do first I'm
33:04always amazed at what can happen when
33:08you retrain someone I I'll go to Van Djk
33:11our transmission plant that's now making
33:13electric motors. You know those people
33:16went from my colleagues went from making
33:18automatic transmissions to complete
33:22digital motors. It took a lot of
33:24training and a lot of technology and
33:26they are so excited about the future but
33:29it required the company to invest
33:30heavily and it's not just you know
33:33enabling them with AI it's making
33:36different things. Um, so you have to
33:39have a plan to transition the team. And
33:42we transformed our education system
33:44every time we go through an economic
33:47change like this like the 1890s when
33:49your man Henry Ford invented the car but
33:52Edison inventing the light bulb. And so
33:54we made high school universal and free.
33:56So we were talking to Mike Johnson about
33:59what should we do to transform our
34:02training and education. Good question. I
34:04think we need to go back to the basics
34:06to trade schools and we need to have a
34:08society that doesn't look down on people
34:10like that. I have a podcast and I
34:12interviewed a woman who has a sheic like
34:15only women can because we have these
34:18hundreds of thousands of gap and she's
34:20doing everything she can but it's only
34:22her. We have to invest. Companies like
34:25Ford, other companies uh academic uh our
34:29governments have to get really serious
34:32about investing in trade schools and
34:34skilled trades. You go to Germany, every
34:37one of our factory workers has a
34:39apprentice starting in junior high
34:41school. Every one of those jobs has a
34:44person behind it for eight years that
34:47are trained. That apprentice system is
34:49amazing in Germany. Is there a way you
34:51could do that in Detroit? Yes, but it's
34:53it's hard. But yes, you can do it. And
34:56we're starting, but Ford can't be the
34:58only one to do it. We need other
35:00companies. We need our country to get
35:02serious about this kind of problem. Um,
35:05we need government programs. We need
35:07high schools to get falling in love with
35:09finding companies like Ford that can
35:11give these great apprentice jobs. It
35:14requires a kind of a complicated answer,
35:17but yes, Germany is amazing and and it
35:21is a great system. I forgot to follow up
35:24earlier on when you surprised me by
35:25saying you've been to China five or six
35:27times. Tell me what what are you are you
35:29trying to get a JV in China? Are you
35:31trying to buy BYD or or what are you
35:34doing there?
35:36Well, this is off the record so you can
35:39hide.
35:41It's a secret. No. Um,
35:44I go for a couple reasons. I bring my
35:46whole leadership team. We don't leave
35:48anyone behind.
35:50And the first thing we do is we get the
35:52last hundred cars that launch there and
35:55we drive as many as we can. Then we pick
35:57the four or five that we love and then
35:59we put them on a plane and fly them to
36:01Detroit. Wow. And then we drive the crap
36:03out of them and we take them apart and
36:05we put them back together. And do you
36:07also do that with the Tesla and Whimo
36:11full self-driving? Do you download it
36:13and test it on your cars? Of course.
36:16Yes. And and back to China. Um you know,
36:21people don't realize that China has IP
36:25that America needs. It has battery
36:29it the way they do to us. No, I'm sorry.
36:31Um
36:33I think um we just need to be more
36:36humble as a country that they do things
36:38really well that we need to learn. And
36:41how we learn is through joint ventures
36:44and cooperations and partnerships. But
36:46we can't be so obsessed with China's
36:50enemy that we aren't humble enough to
36:53set up those business structures and
36:55then have have people in those companies
36:58in those JVS that transfer the knowledge
37:02and the knowhow back to the home country
37:06company Ford without this kind of
37:08mechanism you know these kind of
37:10partnerships and and by the way they
37:14need they like they need us. We have
37:17distribution systems. We have intimacy
37:19with our customers that they don't know.
37:21They don't know how to make quality in a
37:24lot of countries. We do after 120 years.
37:26So, there's a lot we can offer them in
37:28exchange to enable them. But we have to
37:31be careful to kind of I don't it's too
37:34strong of a word but kind of demonize
37:37them as a competitor because there is
37:40such thing as I'm kind of hearing
37:42something there which is maybe a small
37:46critique of the American political
37:48mindset now of demonizing China slapping
37:52huge tariffs on them thinking of them as
37:54the enemy. Would you urge more caution
37:58in demonizing China? I would say how I
38:01like to think about and how we've talked
38:03to leaders in Washington is that we need
38:06to understand that just like I said, we
38:08we need to understand that they do
38:10certain things very well and we need to
38:12learn. And if you tried to do a JV with
38:15them, would the Trump administration try
38:17to stop that? I don't think so. I think
38:19they would as long as they it has the
38:22right guard rails and and um it has the
38:26right guard rails and we think about it
38:28the right way. I know I found very
38:31openness throughout the government and
38:33uh to to do this because I think they
38:36know it's required and and Ford is a
38:38trusted company. We've we've run our
38:40company a way that is different than
38:43others, but I think is more respectful
38:46in a way to to the long the the
38:50sustainability of our manufacturing
38:52base. And I think that matters. They
38:54will listen to us. And I found many
38:57politicians who are extremely
39:00respectful of that view. Uh this has
39:03been so fascinating. I've done the Aspen
39:06moderator sin of like taking up most of
39:08the time. So, let me see if anybody has
39:10questions out there. And if not, I have
39:13many more. But there's microphones
39:14running. And yeah, there's a hand.
39:19I'm curious, why would um an
39:22apprenticeship program in the United
39:24States be hard? I run a not for-profit
39:26development company wake up every
39:28morning and worried that I'm not going
39:30to have enough HVAC or plumbers on our
39:33sites to finish jobs. So, what do we
39:35need to do to make it easier? It costs
39:39more.
39:41Costs more. And someone has to care
39:44about that person. That's the only
39:46thing. That's what makes it hard. We're
39:49so obsessed with saving money and making
39:51money that we have to invest in the next
39:54generation. And someone has to care.
39:57That plumber has to care about that
39:59person. Are we humble enough about
40:01displacing our own job
40:04to find that next person that will take
40:06our place? I think that's hard for many
40:09of us.
40:11Yes. There. And uh I'm sorry the lights
40:13in the eyes so I'm missing some people
40:16but uh Mr. Farley this presentation is
40:18quite very insightful. Thank you for
40:20that. Um uh it is very clear that we've
40:25been on a path of decoupling
40:28that certainly on technology with China
40:31and now potentially beyond that but
40:33given what you just said in terms of
40:36your experience with China if you were
40:39to drive our policy
40:42what would be the perfect balance in
40:45developing our competitive relationship
40:48with China because we've gone so you
40:51know aggressive in so many ways and
40:54there is a widely held perception that
40:57China is our enemy now how would you
41:00describe a potential right balance of
41:03relationship with China good question I
41:05see I would say first of all we need to
41:07level the playing field their companies
41:09have subsidies free land free taxes you
41:13know and they export that advantage I
41:15don't have that so we need some kind but
41:18the company needs to own our side which
41:20is competitive product and competitive
41:22cost. So there's two sides of that but
41:25we need to level playing field e
41:27economically and so we need some help.
41:29The second thing is people need to
41:30understand a car is not a 1980s car. It
41:34has cameras. It has microphones inside
41:36of it. Um, it can be autonomously driven
41:40and therefore it's extremely
41:43well if you're if you're apprehensive
41:45about a balloon, you should be very
41:47apprehensive about a modern automobile.
41:50So, we need to have guard rails about
41:52how the data gets moved. It has to stay
41:55in a cloud in North America. It can't go
41:58it can't it can't be used against us. We
42:01need, you know, we need to understand
42:02these cars are incredibly powerful
42:05technology. The average Ford has three
42:07or 4 thousand dollars of silicon in it
42:09now. Um, so you know, we need to have
42:13policies in our government for national
42:15defense and privacy to protect our
42:19citizens and that is required. Number
42:21two, number three, we need to have a
42:24government policy that gets serious
42:26about this industrial independence. We
42:29need to be able to make battery and raw
42:31materials. You know, a mine takes 20
42:33years to approve in the US. processing,
42:36forget about it. So, we need to start
42:38building pilots either in friendly
42:40countries or in our own country to build
42:43raw materials that we're going to need
42:45for industrial independence now that we
42:47have our own energy independence. And
42:49then where there's IP where we need that
42:52they have, we need to be open-minded, as
42:54I said, about getting that IP and
42:57working with them. It's just a reality,
43:00you know, they have been investing in
43:01electric cars for 20 years. BYD has not
43:05been doing this for 5 years. They've
43:07been doing it for 20 years. We have to
43:09get ready. They under LFP technology.
43:13It's iron phosphate uh chemistry was
43:15invented in the University of Texas.
43:19They bought they bought it. They bought
43:22it and now they perfected it and they
43:25scaled it and now they make 70% of all
43:28the electric vehicles with LP. And we
43:32need that technology here and so it has
43:34to be localized. Batteries don't have
43:36cameras in them, you know. So this is
43:39something we should be able to work with
43:41them and learn. I think those are the
43:43four key policy areas that need to be
43:46put in place. Fascinating. Uh right here
43:48and then the gentleman there and then I
43:51saw you next. So we'll do those three
43:53and we may run out of time. Thank you.
43:55This is a really fascinating
43:56conversation. Uh I work in agriculture
43:58in California. We've lost over four
44:00million acres of farmland in the last 25
44:02years there. Cost of labor have gone up
44:04244%. So I just I'm really really
44:08excited that Ford is taking a leadership
44:09role in this essential economy and I
44:11would love to learn more this fall like
44:13who's going to be there? What outcomes
44:15do you want? How do you bring more
44:17industries together? I'd love to hear
44:18your vision for that. Yeah, I I think
44:21we're working through it. Um, I'm not
44:23saying it's, you know, like Farm Aid,
44:25but I think we'll we'll do a good job to
44:27bring the biggest problems and the
44:30solutions focused uh to to Detroit. Um,
44:34I'm really excited about the a business
44:36because you're very much in the same
44:38boat we are. Um, and we have to be able
44:41to make our own food in the United
44:42States. Um, so excited to tell you more.
44:46uh right here. The microphone's on your
44:48other side and
44:52we're running out of time. So, quick
44:54question. Uh, hey Mr. Farley, I'm a
44:56Bezos scholar and my name is Shia. I
44:58just wanted to um like you mentioned the
45:00integral role that the trades play in
45:02the economy for our domestic security as
45:04well as the dignity of that labor. So,
45:07given that, I wanted to ask why it took
45:08forward one of the most significant UAW
45:11strikes in decades to ensure that
45:13workers have better wages. And more
45:14broadly, I want to ask you, what role do
45:17you think unions play in the essential
45:18economy going forward? Yeah. I think we
45:20need to be one of the key enablers to
45:23solve these problems. Some simply put,
45:25we're not just going to hope it gets
45:27better. We have the resources and we
45:29have the knowhow after 120 years to
45:31solve these problems, but we need more
45:33help from others. On the on the strike
45:35is a great question. No one has added
45:37more uh UAW jobs uh since ' 07 than
45:41Ford. We now have the largest UAW
45:44workforce and we make more cars in the
45:46US and um you know I didn't understand
45:49the strike to be honest. It was
45:51completely unnecessary. Um meaning from
45:54management perspective. Yeah. I didn't
45:56understand why the UAW decided to strike
45:59our plant. It was unnecessary. As I
46:01said, we were more motivated than them
46:03to find a great contract. Um and we, by
46:06the way, we were the first company in
46:08both the US and Canada to find an
46:10agreement. And uh Bill and I are super
46:13proud of that. Um but the strike was
46:15completely unnecessary right here. And
46:18then uh I think uh we're gonna let you
46:21uh end with what you want us to take
46:23away from. I just want to say thank you
46:25so much for the leadership um that
46:27you've both displayed. Um one of the
46:31areas that China's done a great job is
46:33vertical integration and sort of really
46:35managing. It seems like a very big
46:37component for winning in the next
46:40version of the space. And in all
46:42transparency, I'm part of advancing
46:44manufacturing and making LFP here in
46:46America better, faster, cheaper. So, um,
46:48very much part of the solution. But I,
46:50yeah, I'm I'm curious on that vert like
46:52bridging the gap from critical minerals
46:54to the vertical integration piece and
46:56how you're thinking about it given that
46:58critical such important topic. I would
47:00say um anytime there's a new technology
47:03like EVs or socially uh software defined
47:06vehicles there's kind of well in 1928
47:10sorry when we did the Model T Mr. Ford
47:12had this belief that we could we could
47:15scale the Model T so high that he could
47:18drop the price half every year and get
47:21people off horses and in the Model T.
47:24And then the his suppliers because he
47:26didn't have all the money to do that.
47:28His suppliers started making a lot of
47:30money because he would just take all the
47:32suppliers um because he didn't have all
47:34the capital to vertically integrate. And
47:36then the Dodge brothers made our bodies
47:40and the Dodge brothers went into
47:41competition with us even though they
47:44were supplying our own bodies. And so in
47:461928 he said enough of this baloney. I'm
47:50going to build the first vertically
47:51integrated manufacturing facility with
47:53iron ore from the great a lakes, our own
47:56wood from our own forests, um sand to
47:59make our own glass and he did in 1928
48:02with the model A. It saved our company
48:05and since then we have seen many times
48:07uh Elon Musk BYD all believe in vertical
48:10integration. The issue is when you're in
48:12the first and second inning, it's an
48:14advantage. But when you get in the third
48:15and fourth inning, your suppliers get
48:17good enough that you don't have to put
48:18all that capital at risk and all that
48:20employment at risk. You could spend your
48:22money on other things. And that is
48:23exactly what's happening now. So the
48:25dance we're doing is what do we really
48:28need to do ourselves and what can our
48:30suppliers do? Give you an example. In
48:32our country, there used to be 20 low
48:34pressure casting companies. Now there
48:37two. Mhm. So, when I make a frame for an
48:40F-150, I got two choices. And and if a
48:44and if a private equity company buys one
48:47of them and tries to squeeze them for
48:49cash and they have quality problems, I
48:51have one. So, Ford maybe should go back
48:54into low pressure casting because it's
48:56just we're too vulnerable. Um, so it's a
49:00constant dance between vertical
49:02integration and capital efficiency and
49:05you know whether it's technologies that
49:07are aging out or new technologies
49:09maturing. It's been a factor in our
49:12industry for 120 years. What do you want
49:15people to come away from this with?
49:16We'll let you end with that.
49:18really simply um you know there's a lot
49:20of great new technology to think about
49:24but you need to think about it in its
49:27kind of disproportionate impact on our
49:29society as a country. Do we need a
49:33manufacturing base?
49:36Do we? Yes. Okay. If we do for our
49:39society then we better treat it with the
49:42respect it deserves which we haven't.
49:45Jim Farley, thank you.

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