NEW YORK — After days of watching the stock price sink faster than competitors, and concerns about the strategic direction of Ford Motor Co., incoming chief operating officer Jim Farley took to the stage to make his first public speech this week in New York .
Investor expectations were high — and ultimately unmet — that he would announce a significant and dramatic plan for repositioning the company.
“We know what we need to do,” said Farley, 57, president of new business, technology and strategy, in remarks to the Wolfe Research Global Auto, Auto Tech and Mobility Conference. It was broadcast on the web globally so shareholders and the media could listen.
He said the company performs best in crisis situations, and acknowledged that the feeling at Ford world headquarters now may be compared to the Great Recession.
“It takes me back to about 10 years ago,” he said. “I have seen the look before.”
But Ford rises to brutal challenges such as an economic downturn, Thai floods, an earthquake in Japan, the coronavirus — “where there’s a threat,” Farley said. “Decisions get made quickly. It’s very natural. Everyone at Ford Motor Company knows the situation we’re in.”
While automakers and auto suppliers in different parts of the world struggle with shutdowns and slowdowns caused by the coronavirus’ international health scare, Farley didn’t comment specifically on a planned response and he wasn’t asked by the host.
“We need a more compelling growth story,” Farley said.
The company launched an $11 billion restructuring campaign in July 2018 after a disappointing earnings report.
Enormous warranty costs torpedoed company finances in 2019, Farley said.
He emphasized more than once, “Our warranty spending is a big opportunity for us. It’s one of the big uncertainties we have to risk adjust in our guidance. We have a very concrete plan to work the warranty opportunity. We need to lower our warranty spending.”
In January, Ford reached a settlement in its class-action lawsuit with nearly 2 million Ford Fiesta and Ford Focus owners and former owners who filed suit over defective transmissions in 2012. A court hearing scheduled in California this week is expected to firm up details that could result in a payout that exceeds $100 million, according to lawyers involved in the case.
In addition, the botched Ford Explorer launch also took a bite out of profits in 2019.
“We have to get our launches right. Not just the Explorer launch,” Farley said. “We have about 10 global, enormously important launches. They have got to land well.”
The Ford team must work faster and more cohesively, he emphasized. By doing so, the company can “catch quality problems in hours instead of months.”
Upcoming launches are key to the future, Farley said. “We have this great new lineup but it’s execution.”
Leaders at the company need to be in the room rather than delegating, and the whole company needs a “re-awakening,” Farley said.
His new role, which begins officially on Saturday, is widely considered a stepping-stone to CEO.