Ford in a Model T Moment? Jim Farley Rings the Alarm Bells about Tesla

[Lowell]

I like Ford CEO Jim Farley. I think he has both the smarts and dash to lead Ford through the transformation from ICE [Internal Combustion Engine] to the all electric age--to the new Model T so to speak and a struggle to survive in the new age. Will Detroit's 'Big 3' Ford, GM, and Stellantis survive?

In a global tele-townhall with 20,000 Ford employees he laid out the following [lengthy but worth reading] assessment of Tesla's success and the reasons for it.

“Look at Tesla, why are they doing what they're doing and what can we learn from them. First, they have a direct model ... There's no one in between. They make it so easy. Three or four clicks configuring the vehicle with not a lot of complexity to delivering it to the customer. Simple, non-negotiated pricing. A large reservation system as well as remote service.

“Second, Tesla maximizes use of electrons in the vehicle. No one does it better than they do. Their customers pay less for a better battery. Their focus ... after they launch the vehicle, their obsession after the launch of the vehicle, to make the customer experience better, to re-engineer the electronic components, to simplify, to address quality based on data coming off the vehicles, to reduce the bill of material based on how people actually use the vehicle, to drive vertical integration, so they do more and they solve the hardest problems at Tesla. And they manage every electron so they can be as efficient as possible with the expense of battery.

“Third, the product itself is highly differentiated from the rest of the ICE field and complexity is tiny, compared to OEMs,” Farley said, referring to automakers by their old-fashioned trade term, original equipment manufacturers.

“... That allows them to have enormous reuse. Reuse that we've never seen in our ICE business. Tesla can scale quickly because of that complexity reduction. They can drive cost down, which they have. They can keep processes simple.”

He urged employees to think differently, to be creative, to help look for ways to make Ford more efficient, more nimble, more cost-effective.

https://freep-mi.newsmemory.com?publ...c41387_1345fc4

[Richard]

Tesla started from scratch with the intent to solely build an EV,I think the big 2.5 has a disadvantage because they not only have to focus on EVs but also the current ICE market,not to even mention the legacy costs that will be carried over to the EV sector which will make it even harder to compete.

Tesla is selling their technology to other manufacturers,I wonder how much of that Ford is dependent on,if Tesla holds the technology patents they can also regulate their cost and use.

I am kinda surprised that Ford or GM did not start a whole different corporation under a different name when it comes to EVs,so they could start out with a totally clean slate without those legacy costs.

Ford pulled out of Rivian who’s IPO is this week or next,which they put at 80 billion,right inbetween GM and Ford valuations,they lost 1.2 billion in 2020 and said they are only going to concentrate on the Amazon order,while not expecting a profit for many years,the current trucks they are saying that they will be in limited supply.

Tesla received over 8 billion in government incentives which goes along way but not really.

Under the new proposal they are looking at giving $12,000 direct cash back to new EV owners,not as a tax credit but a flat out cash back.

When you look at Tesla it is modular design,you cannot just change a fender,you have to change that whole corner as a module,which makes the assembly line as we know it and as GM and Ford and the other one knows it,obsolete.

It can be done on a small line with robots attaching the modules together.

The ship building industry switched over to modular design years ago,Tesla did not come up with anything ground breaking with that,they just smaller scaled it to a car.

With the shipbuilding all the modules are built off site,including all the electricity,plumbing,carpet and fixtures a completed module that is then welded together at the shipyard,with less then 1/2 of the labor force and 1/3 of the time it takes to build a ship by conventional methods.

Apply that to the auto industry,you can build the modules anywhere in the world,pack them up in a shipping container and assemble them at the factory.

They do that already with solar panels.

It takes billions to get into the EV market and a lot of people are raising the funds to do it,I would be very nervous if I was Ford,GM etc.

But they have the talent to figure it out and the innovation when they choose to utilize it but I think they are caught in that trap of letting it all out in a measured response in order to maximize profits.

I looked at trading my 2019 F250 super duty 4x4 in on a 2020-2021,none available but the only difference is,a bit more HP and more fancy electronics.

For 70 -80,000 but they are maxed out with everything on them,not max out with options but maxed out on technology and performance,it’s a dead truck from now on,I do not know what else they could do to it to improve it.

I think all the manufacturers have set the technology bar so high the last 5 years,they are maxed out,Trucks and SUVs are done,they are going to have to come up with something game changing in order to stay competitive.

They have to be banging their heads about it.

What is worse,none of this is cast in stone and all based on incentives,which we all know are subject to whim every 4 years.

If I was Ford I would do what Tucker did or they did with the Manhattan project,find a barn out in the middle of nowhere,fill it with the brightest and best and build an EV ground up in complete secrecy while starting with a blank mind as if they never existed,a majority of the automotive industry innovation always started at the ground level out of somebody’s garage.

They had a conversion motor,it reportably sold out as soon as it hit the shelves.

I think the ability to convert existing vehicles to EVs where applicable is the market right along side ground up in a transition stage.

If they are looking for innovation,grab a few quarts of moonshine and hit the back woods of the Carolinas,those guys have been building winning race cars and engines for decades out of piles of steel and aluminum,betcha they could come up with a Ford EV that would smoke a Tesla.

Chrysler already proved back in the day and until 1982 when the program was dropped,that they could build a cost effective vehicle that put it zero emissions and did not rely on fossil fuels.

The turbine car.

They are smart when they want to be.

Why does it have to be an EV bandwagon,like there is nothing else out there capable of creating forward movement while producing zero emissions.

There actually is but everybody is laser focused on EVs that they cannot see the forest for the trees,you cannot have innovation with a corrupted or clouded mind.

Its the same trap as the ICE,everybody else is doing it that way,so can we.

As it stands nobody is going to care if it is a Ford,GM or Chrysler when it comes to an EV because nothing will set them apart outside of a skin,the internals will be the same as everybody else.

[Meddle]

First, they have a direct model ... There's no one in between. They make it so easy. Three or four clicks configuring the vehicle with not a lot of complexity to delivering it to the customer. Simple, non-negotiated pricing.




They can drive cost down, which they have. They can keep processes simple.

Get rid of the dealers.

Get rid of the workers.

More profit for the C-Suites.


Sounds like a plan.

[Richard]

Cadillac is already shedding dealers that are not converting over to accept EVs.

The dealers make money on service departments so if they go back to the office with a few cars and order there or flat out Carvana style,go online and your car is delivered to your door.

What happens if it breaks? They going to pick it up and truck it off 10 states over to be fixed?

That’s millions of workers all across the board in the auto industry alone,gone,mechnincs,salespeople,factory line workers,parts departments,the parts suppliers,the truck drivers,the people that fix their trucks on and on and on.

What are you going to do with those millions of workers and the tax base that will also disappear as the dealers close,it will be like Detroit of ten years ago where the few are supporting the many at a higher cost until it is not sustainable.

A politician said yesterday that we will not be able to move forward without implementing UBI,which is where we are headed.

[Satiricalivory]

Tesla can't make money without government handouts and bitcoin speculating so there's really nothing to take seriously here.

[Ray1936]

I'll give up my gas guzzler when you pry my cold, dead fingers off of the hose nozzle.

[401don]

Tesla can't make money without government handouts and bitcoin speculating so there's really nothing to take seriously here.

Yeah, just like the Big 3 didn't need to worry about those crappy little foreign cars. What's left of the Detroit automakers will be gone if they ever lose the pick-up market.

[DetroiterOnTheWestCoast]

I'll give up my gas guzzler when you pry my cold, dead fingers off of the hose nozzle.

if you have a gas guzzler just don’t complain about gas prices. You knew they’d go back up.

[Richard]

Yeah, just like the Big 3 didn't need to worry about those crappy little foreign cars. What's left of the Detroit automakers will be gone if they ever lose the pick-up market.

you have to wonder what the plan is with all of those ones sitting dormant waiting on chips,right now a lot of dealers are adding on a $5000 just because fee with no incentives or discounts.

Right now it is,this is what we have and the price,take it or leave it.

When the time comes,who is going to get stuck with a 7 year loan on a vehicle that they know is going to be worthless when EVs make that transition,people will just wait and buy the EV.

If fuel hits $5 - $8 this winter,you will not be able to give away a truck,just like last time.

I have a friend that just traded a 2017 Dodge Ram - owed $25,000

They gave him $34,000 on a trade in for a 2019 Chev high country 4x4 at $44,000 Both had the same miles and in clean condition.

The truck market like everything else is crazy,I have bought houses cheaper then trucks are now.

I do not think they will be ahead of the game,they are to big and take time to ramp up,Tesla,Rivian etc are quick and nimble and can adjust.

[DeLemur]

I hope you're correct, Lowell. Seems like a great identification of their competitor, albeit missing the harder part of what Ford is going to do about it. Although I doubt any of us will be reading that game plan here.

Happy to see the Bronco and aluminum F-150 doing real well for Ford. Sad to see the E "Mustang' not make much of a splash.

I like Ford CEO Jim Farley. I think he has both the smarts and dash to lead Ford through the transformation from ICE [Internal Combustion Engine] to the all electric age--to the new Model T so to speak and a struggle to survive in the new age. Will Detroit's 'Big 3' Ford, GM, and Stellantis survive?

In a global tele-townhall with 20,000 Ford employees he laid out the following [lengthy but worth reading] assessment of Tesla's success and the reasons for it.

“Look at Tesla, why are they doing what they're doing and what can we learn from them. First, they have a direct model ... There's no one in between. They make it so easy. Three or four clicks configuring the vehicle with not a lot of complexity to delivering it to the customer. Simple, non-negotiated pricing. A large reservation system as well as remote service.

“Second, Tesla maximizes use of electrons in the vehicle. No one does it better than they do. Their customers pay less for a better battery. Their focus ... after they launch the vehicle, their obsession after the launch of the vehicle, to make the customer experience better, to re-engineer the electronic components, to simplify, to address quality based on data coming off the vehicles, to reduce the bill of material based on how people actually use the vehicle, to drive vertical integration, so they do more and they solve the hardest problems at Tesla. And they manage every electron so they can be as efficient as possible with the expense of battery.

“Third, the product itself is highly differentiated from the rest of the ICE field and complexity is tiny, compared to OEMs,” Farley said, referring to automakers by their old-fashioned trade term, original equipment manufacturers.

“... That allows them to have enormous reuse. Reuse that we've never seen in our ICE business. Tesla can scale quickly because of that complexity reduction. They can drive cost down, which they have. They can keep processes simple.”

He urged employees to think differently, to be creative, to help look for ways to make Ford more efficient, more nimble, more cost-effective.

https://freep-mi.newsmemory.com?publ...c41387_1345fc4

[Richard]

^ this one looks pretty cool as far as section 8 cars/trucks go

Based on Ford's 1978 F-100 pickup, the all-electric all-wheel drive F-100 Eluminator has 480 horsepower and features Ford Performance Parts' Eluminator electric crate motor.

[Satiricalivory]

Yeah, just like the Big 3 didn't need to worry about those crappy little foreign cars. What's left of the Detroit automakers will be gone if they ever lose the pick-up market.

Is this a joke? You're saying a niche boutique car company that has yet to prove it's capable of any operating profit without obscene federal grants and crypto schemes is akin to the likes of Volkswagen and Toyota?

If so, very funny!

Tesla can't even make a truck to begin with, lmfao.

[401don]

Is this a joke? You're saying a niche boutique car company that has yet to prove it's capable of any operating profit without obscene federal grants and crypto schemes is akin to the likes of Volkswagen and Toyota?

If so, very funny!

Tesla can't even make a truck to begin with, lmfao.

I obviously didn't mean losing the pick-up market to Tesla. I also wouldn't call Tesla a niche company. They are on track for close to a million vehicle sales this year. It's not that Tesla alone is the problem. It's just one more company of many eating away at the Detroit automakers.
Everyone laughed at the crappy Kias just a few years ago. Jim Farley is obviously concerned enough to discuss them at length with his employees and dealers.

[DeLemur]

Tesla makes an exceptional product and has incredible demand. They are not something to be dismissive about or laugh at.

Is this a joke? You're saying a niche boutique car company that has yet to prove it's capable of any operating profit without obscene federal grants and crypto schemes is akin to the likes of Volkswagen and Toyota?

If so, very funny!

Tesla can't even make a truck to begin with, lmfao.

[DeLemur]

Fascinating. I like the custom ability there. Though how many people want an old look with a cutting edge battery/engine?

[Richard]

Lots of the old school look out there though and when you look at the viability of classic cars in the future where gasoline will end up being $25 per gallon,lots of probability’s.

ICE wise I just totally rebuilt mechanically and interior a 1991 GMC 3500 series,for $7000. It would have cost me north of $80,000 for new.

I have a 76 Ford F-250 trailer special,rust free with 60,000 original miles,the 460 gets 4 MPG downhill,I would entertain converting that to electric or alternative power in order to make it feasible to operate on a daily basis,even if I dropped $20,000 into a conversion it would still be less then the $70,000 I would have had to spend to get a new one.

We really do not need all of those trinkets of electronics stuck in the dash.

I am building a 1965 mustang convertible for my granddaughters first car when she starts driving in a few years,that electric crate motor from Ford performance is an entertaining thought for that considering by the time she goes to college or beyond EVs will be dominating the landscape.

Dump $15,000 into a EV drivetrain in a classic mustang might be a bit more desirable.

The Prowler did well at a vintage look return but the others ended up being duds.

Right now there seems to be a a lot of demand with the new creation of the Classic 69 -72 Bronco that Ford is coming out with,that body style of the Ford truck 71-79 is still quite popular and they may do well with it.

When you think about it,all of these shops that are taking classics and updating everything on them today,you are dumping $30 to $50,000 into them in order to do that.

I think to the average truck buyer,that is not buying a truck for commercial use,pulling trailers or boats and have just replaced 1500 series as grocery getters instead of a sedan would be a good market.

The classics are the classics because they have sexy lines that have stood the test of time,the new vehicles all look like a bunch of computer generated boxes with wheels and unless you really study them,to me anyways,a Range Rover looks not much different then a Ford Explorer.

I bet if you took the badges off of the new cars,nobody would be able to tell you what they are,unlike the old days when you knew it was a Ford or Chevy or Chrysler.

But you do have the younger generations that do not know that difference and maybe the new cars look sexy to them.

The problem with the classics is they have gotten to the point where the masses cannot afford to purchase them and use them as a daily driver because of that investment part.

Let alone I know many that have purchased them,but they do not even know what a carburetor or spark plug is.

I think this will fill that void,where somebody can buy a factory classic look with all of the advantages of the new technology,enjoy it with everyday use without the maintenance requirements of a classic.

Stuff like the PT cruiser did not cut it because they took bits and tried to make it look like a classic,this design by Ford with this truck stays true to the classic sense.

The new bronco looks like somebody cut the roof and kinda like they copied that other one out there,cannot think of the name but they are also boxy with a little squat roof,not really staying true to the classic lines that defined it.

[Richard]

Tesla makes an exceptional product and has incredible demand. They are not something to be dismissive about or laugh at.

It is the road they have traveled and methods used,everybody has or us using them as a standard and looking to beat them.

They will end up being no different then all the other manufacturers in the end,I have driven their high end model,which they are saying will be in the over $100,000 range in a few years,the low end $35,000 range will be not much different then any subcompact today,because to keep the prices down they will not be able to employ all of the same technology.

Today they may be somewhat of a stand out when 2% of the population is driving EVs but in the future when they are a dime a dozen?

Watched a video of the lower end Tesla and it’s come on command ability.

They were in a shopping mall parking lot testing it and it ran the stop sign,police pulled it over but sense there was no driver and no driver was technically in control of the car,he could not write the ticket.

I guess that adds more to the unemployment line in the near future,no more need for chauffeurs or valet parkers.

But I still retain the aspect of nothing is viable,in the private market,if it has to be subsidized in order to get people to buy it,if it made economical sense or the demand was there,it would be able to stand on its own 4 wheels,like we are expected to stand on our two feet while not expecting others to pay our way.

As it stands now we are going down the road of federal government run auto manufacturing,or state run commerce.

Because the federal government is dictating the market,and not capitalism.

[softailrider]

you have to wonder what the plan is with all of those ones sitting dormant waiting on chips,right now a lot of dealers are adding on a $5000 just because fee with no incentives or discounts.

Right now it is,this is what we have and the price,take it or leave it.

When the time comes,who is going to get stuck with a 7 year loan on a vehicle that they know is going to be worthless when EVs make that transition,people will just wait and buy the EV.

If fuel hits $5 - $8 this winter,you will not be able to give away a truck,just like last time.

I have a friend that just traded a 2017 Dodge Ram - owed $25,000

They gave him $34,000 on a trade in for a 2019 Chev high country 4x4 at $44,000 Both had the same miles and in clean condition.

The truck market like everything else is crazy,I have bought houses cheaper then trucks are now.

I do not think they will be ahead of the game,they are to big and take time to ramp up,Tesla,Rivian etc are quick and nimble and can adjust.

I agree there are a lot of 2021 vehicles in storage waiting for parts. Maybe they’re just going to rebadge those cars as 2022’s. Not sure I would be thrilled about buying a new car that has been sitting around for months - especially at MSRP.

[Richard]

^ my thoughts with all of those stuck in storage with little pre planning and with the pictures of them being stored in a closed factory space,you have to wonder about the critter effect.

When Covid hit they stored 1000s of rental cars in the fields of the fair grounds by me,fields that had mice and snakes that love to figure out how to nest.

Like when Mercedes got the brilliant idea of using vegetable based wire coating instead of plastic,they might as well as put a neon sign that said - Critter buffet all you can eat.

[Satiricalivory]

Tesla makes an exceptional product and has incredible demand. They are not something to be dismissive about or laugh at.

AHAHAHAHAH Do you have you have any idea how bad the build quality of a Tesla is? Do you know what their customers go through in service? Nobody would ever accept such horrible standards from a major auto company. You have to be a Tesla cult member to be happy with one of their cars.

Exceptional yes, exceptionally bad.

[401don]

AHAHAHAHAH Do you have you have any idea how bad the build quality of a Tesla is? Do you know what their customers go through in service? Nobody would ever accept such horrible standards from a major auto company. You have to be a Tesla cult member to be happy with one of their cars.

Exceptional yes, exceptionally bad.

Does it matter if it's a cult if you're selling cars? Hertz just joined the cult by ordering 100,000 of them.

[Richard]

^ they are coming out of bankruptcy and required to sell 185,000 cars by dumping them in the market in a matter of months.

They do have a 7 billion in funds to rebuild their fleet,which was a little under 700,000 worldwide pre bankruptcy,but the money that they are raising and what got them out of bankruptcy was hedge fund and corporate raider money,and they had to put up all of their assets in order to get that money.

The forced sale of the 186,000 cars is just to pay the first note.

Their numbers are based on the current post pandemic rental rates of $300 per day,there is a shortage of rental cars now driving that ratebut as everybody else ramps up,what happens when they drop down to the $59 per day.

There is no delivery date for the Tesla’s ,and if the market drops and Hertz defaults it will no longer exist because the current investors will be looking at its assets,and selling them to get their money back,because that is what they do.

Even if everything goes according to plan,Hertz adding Tesla’s to its fleet of rentals with 100,000 of them?

It is not even a drop in the bucket and 99.9 % of the public will not even be able to rent them,and they have not specified what model yet,it could be just the base no frills one considering Tesla has already said that the sporty one will be in the 100 to 145,000 price range it would put that one up in C6 rental rate,which ain’t happening even at $300 per day.

They latched on to Tesla because they needed that feel good moment of saving the planet while in front of the bankruptcy judge and shareholders in order to survive.

So,yea it had a lot to do with cult based,there are many other EV options out there for purchase that are way more cheaper that would have allowed Hertz to convert their fleet at a much greater percentage.

It was all about looking like doing something,without actually doing anything in the grand scheme of things.

That Tesla order is 2.7 billion out of a 7 billion re-fleet total.

That 2.7 buys a heck of a lot more mid range EVs then Tesla’s and if they were really looking at saving the planet they would have skipped the Tesla’s and converted 30% of their fleet verses 2%.

So yes it could be considered cult pandering,or just creative marketing.

When they first announced the Tesla agreement,Musk tweeted out that no deal had been struck,so how can they have even made an announcement when it did not exist.

A deal has been done now,but like I posted already,it has no delivery date and Tesla is in no position to pump out 100,000 Hertz cars today or tomorrow,it may be years down the road before that order is filled.

There is no EV manufacture yet that can pump out 100,000 EVs per year,let alone the infrastructure in place to support them.

There is not even a supply of raw materials large enough to even support mass production of EVs.

All of these big EV announcements are just raw raw moments in time,it is going to be 3-5 years to even start ramping up production,while everybody feels the pain in the process.

Rivian is buying 10,000 acres in Arizona to build a factory,a factory where thousands of employees are going to have to drive many miles one way,in a ICE powered car just like with Tesla’s battery factory.

Let alone requirements of millions of gallons of water drawn out of a state that cannot hardly supply enough water to their residents today.

None of all of this has to make sense,financial or other wise , it just has to sound good and the money flows.

Tesla is like Microsoft was at the beginning,attach your name to them and everybody gets a hard on,and you really do not have to even buy anything from them.

They are a new toy on an empty shelf,once that shelf starts filling up as others come online,they will just be another toy on the shelf.

I think China is going to be the one that dominates the market,they are the one that controls the raw materials and can produce vehicles at costs nobody else can touch.

The US is pandering right now in saying if you buy a American made EV you get 12,000 cash back free money in your pocket,but Americans have already proven cheap is where they want to be and if China puts out a $20,000 EV that is what they are going to buy versus a $60,000 EV just to get $12k back.

The EV ship has already sailed,because we do not control the raw materials needed for their production,our fixed costs will bind us,we are putting all of our eggs in one basket while spending trillions on EVs and not other alternatives and once we put that infrastructure in place,the same thing is going to happen as it did with solar.

China will waltz in and dominate the market and Americans will jump at the chance while having no other choice.

They do not have to spend trillions on the infrastructure,we are doing it for them,and once that happens,our workers and our factories will be left to rot just like in the past.

People need to remove the emotions from the equation.

[DeLemur]

AHAHAHAHAH Do you have you have any idea how bad the build quality of a Tesla is? Do you know what their customers go through in service? Nobody would ever accept such horrible standards from a major auto company. You have to be a Tesla cult member to be happy with one of their cars.

Exceptional yes, exceptionally bad.

You are not making sense. There is high demand for Tesla products. There is no poor quality feedback loop affecting them and their consumers at all. Their brand and vehicles are revered. The only ones speaking poorly of them are competitors. Even Jim Farley is noting their capabilities.

Ford and GM's brand and vehicle impression is stale and mediocre.

Why do you keep on acting like Tesla is a big joke? The only decent argument against their growth I've heard and I think Richard echoed this, they haven't yet made a car for the masses. But there are a hell of a lot of wealthy and semi-wealthy niche buyers that will continue to feed their coffers and R&D for the mainstream vehicle.

They have only ascended in their existence. What you are saying is contrary to all of the economic growth and consumer following they have.

[Zacha341]

They [Tesla] have kinks to work out -- not unusual with new with car technology such as the early CVT transmissions [I'd not have wanted to purchase those early installations!]. I mostly deal with used, standard ICE cars as we purchase them, but here's a start for reviews on the Tesla lines [I don't purchase ANY car without reviewing from various sources]:

https://www.edmunds.com/tesla/model-...iews/?rating=1

AHAHAHAHAH Do you have you have any idea how bad the build quality of a Tesla is? Do you know what their customers go through in service? Nobody would ever accept such horrible standards from a major auto company. You have to be a Tesla cult member to be happy with one of their cars.

Exceptional yes, exceptionally bad.

[Zacha341]

Right-O. The name was/ is Toyota! Not as good now, but they hardly had a crappy history regarding durability and not all are small [the Avalon and Camry models are mid-size sedans]. Camry being a top seller for many years.

Though it can be argued the itty-bitty, yet mighty Honda Civic kicked open the door to the big three decline - at the economy-size car level.

Yeah, just like the Big 3 didn't need to worry about those crappy little foreign cars. What's left of the Detroit automakers will be gone if they ever lose the pick-up market.