Ford Motor : Leaders to Discuss Customer-Focused + Growth Plan at Deutsche Bank Conference Transcript

Ford Motor Company Deutsche Bank Global Auto Industry Conference June 11, 2025 8:00 AM ET Edison Yu: So, welcome to the DB Global Auto Conference. My name is Edison Yu. I lead the U.S. autos research here.

We're going to kick things off with a bang this morning with Ford. Very pleased to be joined by Andrew and Navin. Thank you.

Andrew Frick: Good morning, everyone. How are you doing, Edison? Edison Yu: Excellent. Andrew is the President of Ford Blue and also Ford Model e. Navin is the CFO of Ford Pro. Between the two of you, I'm sure we can cover many aspects of Ford.

Maybe I'll start with Andrew. I know you recently ascended to the role of basically running several divisions now, and I think investors actually haven't heard as much from you publicly over the last couple of years. So, I'd love to know more about your background at Ford and also kind of your high-level priorities coming in.

Andrew Frick: Okay. Very good. Well, good morning, everyone. It's great to be here with you.

And Edison, thank you for hosting us today.

Yes, I've been - actually, I'll be celebrating my 30thyear with Ford on Thursday of this week. So, a big week and very excited to be here with all of you.

My background primarily has been in marketing sales and service in the U.S. Worked in our international markets group as a general manager, and have been able to work in several positions serving both the Ford and the Lincoln brands over those years. And then over the last few years, through general management, have taken on the role at Ford Blue and then, more recently, Model e and interim for Pro.

From a priority standpoint, our objectives are very clear. We are obviously very focused on cost and quality and reducing that across the Ford Blue business right now. We're fortunate to have a lot of iconic vehicles in our portfolio. And we're really looking to grow at this point.

Our Model e business, we are looking to improve our overall profitability as we come out of our first generation of products and into our second and working on now our advanced electric vehicles for our third generation.

And on the Pro business, we just want to continue to accelerate our growth. This is a huge competitive advantage for Ford. It's an area that we do extremely well in across North America and in Europe. We continue to grow, and we continue to - we want to continue to, from a prioritization standpoint, just build upon the competitive moats that we have been able to set up with our Pro business.

Edison Yu: It's been a dynamic start to the year. I think anyone who has been following the

auto industry...

Andrew Frick: To say the least. Edison Yu: ...would agree. It was supposed to be a stable year after everything that's happened, but we cannot catch a break there. So, there's been tectonic shifts in

U.S. policy. In light of that, I think most people would agree that Ford has emerged, at the very least, as a relative beneficiary. Where do you see the most opportunities from the competitive perspective? And that can be both for consumer and for commercial.

Andrew Frick: I would start with - first of all, I think that is true. I mean, we are really in a position right now to leverage the American footprint and our deep roots that we've had in America for quite some time. As many of you know, over 80% of the vehicles we sell in the U.S. are built here in the U.S., which gives us an advantage. It's something that we are not in a position where we're having to react too strongly at this point, because this is not a course correction for Ford.

This is a continuation of our strategy and our deep commitment to U.S. manufacturing. So, it puts us in a bit of a different position than many of our competitors that are having to react to this.

We're on pretty stable ground at this point as it relates to that footprint, which gives us some optionality in how we want to compete in the market. We have, like we were saying, we have optionality across our Ford Blue, our Model e, and our Pro business. We also have optionality across our vehicle lines in terms of where we want to flex into competitively. And we have optionality across our powertrain lineup as well. We sell our ICE vehicles, we sell our hybrid vehicles, and electric vehicles as well. So, we have the ability to really react nimbly to the market and the changing customer dynamics.

All of our iconic vehicles really - F-150, Explorer, Bronco; on the Pro side, Super Duty and Transit - are all 100% built here in the U.S. So, we really have an opportunity as we look at how we want to flex to market and compete in the market. We have the ability to look at how we're set up versus our competition and really take advantage of our footprint and really leverage that for us.

Edison Yu: How important is growth in market share right now in the U.S.? Obviously, you have some structural advantages with the new policies, and I think we've noticed some of the promotion activity that's been implemented. Is that kind of more of a focus now given the situation relative to perhaps pricing, going forward? Andrew Frick: First of all, market share is important to us, but it's important to us if it's done profitably. So, it is really that balance of growing our share and doing it in a very profitable way. So, from a promotional standpoint, like you talked about, it was very important for Ford to take a leadership position in the market on April 2, when a lot of the tariffs went into place.

We felt we're uniquely positioned to really lead in this perspective, and consumers have looked to Ford - we've been around for over 120 years. We've been through wars. We've been through pandemics. We've been through recessions, recessions where we didn't take bailout money. And we really want to be very - we want to be there for customers at times of uncertainty.

So, on April 2, we launched our "From America, For America" campaign that provided customers with employee pricing. They pay what we pay. And we did

that to really take the long game on being there for customers at times of uncertainty. They look to Ford. They look to Ford for stability. And that's what we were able to do.

It's really paid off for us in the last 60 days. You've seen a lot of the results in the market. Last month - and this goes back to your question on growth and how we're doing it - last month, coming out of May - we just closed 10 days ago or so - we actually posted a 14.7% share here in the U.S. That's up 1.9 points of share on a year-over-year basis. A lot of times in this industry we fight for tenths of share, and to have a 1.9% increase year over year was very strong.

And we did it with our profit pillars. Our trucks had the best - when you look at our whole truck portfolio, it had the best month we have had in two decades, in 20 years. Our Bronco business continues to grow. Our Bronco family sold around 30,000 units, and Bronco four-door beat Wrangler for the seventh consecutive month. And we also were able to grow with our all-new Expedition and Navigator that we just launched. Expedition was up 45%. So, these are all profit pillars that we're really leaning into as we look for areas to grow in the market.

And we're leaving the month of May and almost halfway now through the year. Our inventories are in a really good position. Our dealers have really gotten behind the "From America, For America" campaign, and we'll continue to run that through the Fourth of July time period.

And the same is true on the Pro side. With Super Duty and Transit, we've been really able to lean into those vehicles and take advantage of a really strong commercial market right now as well.

Edison Yu: And on the commercial side, do those kind of dynamics apply as well from a competitive and from a kind of growth market share standpoint? Navin Kumar: Absolutely. We look at very similar dynamics on the Pro commercial side compared to retail. We're looking at volume opportunities, share opportunities, market equation, and we want to grow profitably.

But additionally, in the Pro business, we look at our connected vehicle install rates and our growth in software and services, because that's what sustains the competitive advantages and differentiation that Ford Pro has.

Our moats are our deep relationships with customers, the breadth of our vehicle lineup. We have the widest vehicle lineup in the commercial industry. Our partnerships with upfitters, and we can configure these vehicles for virtually any on-road use case. And we have the largest dealer distribution service footprint of any commercial brand. And we're continuing to deepen those moats.

But where Pro goes is, with software, we can augment all of that. Taking software in connected vehicles, we're really unlocking value for customers. They're able to do more with these vehicles, be more productive, as well as minimize downtime.

So, we're helping customers grow their business and their top line, as well as optimize on costs. And it's a virtuous cycle for Ford Pro. We're helping customers. We're leveraging data and insight, which is helping make our vehicles and solutions better and better and more and more optimized. And we're growing into higher-margin parts and services.

And so, this market environment and policy really creates opportunity for us to deepen that market leadership. Because of the breadth of our lineup and the customers and the variety of use cases we serve, that's a real key competitive advantage for Pro. And why that's the case is that policy drives growth in specific areas; for example, investment in infrastructure and rollout of data centers to support artificial intelligence or residential services. We calibrate our solutions to where the market is. And so, we can capitalize on those opportunities.

And two years ago, when we presented at our Capital Markets Day our Ford Pro strategy, we have real tangible proof points of progress. We have over 675,000 digital software subscriptions in the Suite Solution space with the telematics and fleet management. We've been growing subscriptions, average revenue per subscription. And we've been growing with both smaller and larger businesses.

And on the parts side, our attach rate of parts is about 35%. And two years ago, it was a little above 30%. And we've grown that through capacity actions - adding mobile service, dedicated commercial service bays - as well as, on the demand side, leveraging software to lead vehicles, customer data and input, and our dealers' physical service networks.

And this is all really integral to delivering the Ford+ plan. Our ambition a few years in the future is to have 20% of our profits in Pro come from parts and services. And so, what we're doing in Pro is deepening our leadership, but it's growing and diversifying the business into more durable profit streams and reducing capital intensity and our exposure to cyclicality.

Andrew Frick: Navin brings up a really good point. So, there's investment on our side. Our dealer body has also been and our dealer network has also been investing in this area as well, billions over the last several years.

And just to double-click on one of those services around mobile service, through this year so far we've done over 1.5 million mobile services - 1.5 million. So, it is not insignificant in terms of how we're really focused on our customers and providing differentiated levels of service for them.

Edison Yu: So, I think it's safe to say that growth has been impressive. I wanted to shift to costs. Ford, Andrew, you have acknowledged, has had a cost issue for a while. I think the commonly cited number at one point was $7 billion. Obviously, it's been shrinking. How much progress are we making to address that; in particular, on warranty? And can we accelerate that pace of improvement? Andrew Frick: We are making progress. This has been a main focus of the company for the past several years, and we're starting to see it really pay off. So, we've had three consecutive quarters of year-over-year improvement.

What I really like about how the company is approaching it is we're trying to change not by doing little tactical things, but really fundamentally changing the system and the culture and the company around how we operate to make this long term, durable. And we're starting to see this pay off.

So, systematically, we're really working as a team, as a governance process, like, across the whole team. It's not just relying on individual team members, but across our PD engineering team, our manufacturing team, our supply chain team. We're doing so much more in terms of vehicle tear-downs, understanding

what the competition looks like, where there's opportunities. That's been a big accelerant for some of the growth that you've seen and some of the results that you've started to see.

In the manufacturing lanes, we're doing Gemba Walks and going to the plants and spending a lot of time at individual stations, making sure that we're leveraging the best of our plants across the whole Ford ecosystem in each individual plant. We've seen really good progress there. And we've spent a lot of time with our supply chain team and our supplier partners. So much of our progress will be done through the supplier partners.

And I'm really proud of how the team is working differently. We've actually brought in a lot of specialists into the organization to bring new technical skills and new technical tools to us.

So, we're starting to see the results: a $1 billion improvement on a year-over-year basis, excluding the tariff impact. But we just went through the major launches for us this year, and we didn't lose any production. So, our production - that's the first time in many years we did not lose production through a launch. So, our production stability has improved quite a bit.

Our zero MIS, which is the quality leaving the plant - when it leaves the plant, at zero-months-in-service, is up considerably, a double-digit improvement. Our three-months-in-service quality is up double-digit improvement.

So, we're seeing these start to pay off. We're doing much longer term testing, and we're really across every inch of the business just running the business a different way.

So, we are closing the gap, as you said, but we still have a long way to go. And we're still really balanced in our approach. We understand what's ahead, and we know this is a big opportunity for us at the same time.

Navin Kumar: Edison, I'll add that growing the Pro services ecosystem is directly linked to us addressing costs of the company. Those connected vehicles and the software, that data directly links into our quality systems. And like Andrew mentioned earlier on mobile, growing our physical services and our proactive service and our reactive service, that helps us not just minimize vehicle downtime for customers, but optimize on total costs to repair, which will translate into improved warranty costs.

And then, longer term, that data will help inform the vehicles and the solutions we provide, and we can optimize on costs there. And including on things like order-to-delivery, where we're driving more efficiencies in those processes for customers. So, the customers benefit because they know when vehicles are coming and entering into their fleet. And we optimize on inventory and working capital, which will also benefit costs.

So, growing those services is also just really directly linked into the cost optimization that we're doing in the company as well.

Andrew Frick: Speed to resolution, as we have issues, really does matter. It really helps the warranty side. Edison Yu: Another element of costs - and I promise we won't dwell on this too much -