Ford Motors CFO on Q1 Wins and Losses, Expected Cuts

Ford Motors CEO John Lawler joined Cheddar News to talk discuss the company's Q1 wins and losses. The interview follows Ford's earnings report yielded better than expected results. Lawler also said the automaker was expecting to make significant cuts as the company's EV sector continues to lose money.

Closing Bell

Now to my interview with Ford Motor CFO, John Lawler wins and losses for Ford in its latest quarter. A company Tuesday reported better than expected results. But the automaker announcing in a regulatory filing Wednesday reviewed by Chet News that it does expect to book restructuring charges of between one and $2 billion this year as its unit continues to hemorrhage money. Ford CFO told me where the cuts will be happening, what will make up those charges? Well, we know that we've got some restructuring and continued restructuring in Europe. We have some restructuring that's going to happen in our China business as we refine our strategy there. And so it's, you know, generally as we go around the world, it's the markets where we see opportunities and where we need to make strategic changes. We're doing that and with that, it's going to come some restructuring. What are the specific units, John and roles in those locations that you mentioned? China and Europe just to name a few perhaps that the company is planning to cut. So I think it's a bit simplistic to just look at the head count as what we're doing, you know, good companies need to work on cost uh on a regular basis. And in the transition that we're seeing in those markets in those regions, in those businesses, as well as overall for the company. In this transition, there are going to be areas that need to grow and there's going to be areas that need to shrink and we're going to stay focused on that and you're going to see that unfold and that's part of the story. But the other part of the story is just overall cost efficiency, getting waste out of the system, taking a lean approach. And we're doing that everywhere around the world in all three of our business segments, the electric vehicle unit is expected to lose billions of dollars just this year. John, what is the path to profitability for the E V division from an E V standpoint, as we've said, it's a start up and it's not profitable at this point. We have a trajectory and a path to get to an 8% adjusted EBI margin by the end of 2026. That's gonna come from several key levers that uh we're working on right now. Scale uh efficient design with our second generation vehicles, battery technologies and battery efficiencies. So all of those are going to lead to a much more competitive line up for us from a profitability standpoint as we launch our second generation of vehicles starting in 2025. The company yesterday cut the price of the Mustang Moy for a second time this year in that division. What's the lowest that Ford is willing to take prices in order to compete? Look, we're not going to sacrifice all profitability for share. We're going to have a balanced approach on our lightning vehicle. We have tremendous pricing power. We've increased prices because demand is so strong. Our battery electric transit van again, we have pricing power there. Demand is strong in the two row crossovers segment. It's a competitive segment. There's pricing pressure in there. We've adjusted prices, we're remaining competitive. Do you think it makes sense for a consumer to make the investment in an electric vehicle? Well, absolutely. I think that the investment in the electric vehicles is a good choice. They're great vehicles, you know, they serve our customers needs. We're seeing great feedback from those consumers and you know, I I would say that definitely it's a good time to buy an electric vehicle. It's a good time to buy a Ford electric vehicle and we've got a great line up for them to choose from is A I something John that you're looking at as a way to potentially benefit the business if not now down the road? Yeah, A A I is another tool that's unfolding. And you know, like all of the progression in technology, we're understanding what that means for our business and how we can apply it to drive those efficiencies to drive productivity and to make us stronger. So uh we're definitely looking at it, but at this point, you know, it's early days, early days of artificial intelligence. You heard it there from Ford CFO John Lawler. Thank you John again for joining me earlier in the wake of those earnings results.