Ford Motor : Scotiabank Transportation and Industrials Conference Transcript

Ford Motor Company Scotiabank Transportation & Industrials Conference 2025 November 18, 2025 9:00 AM ET Jonathan Goldman:

I'm pleased to welcome our next company, Ford Motor Company. And from Ford we have Andrew Frick, President of Ford Blue and Model E.

Andrew, thanks for joining us.

Andrew Frick:

Thank you, Jonathan. Thanks for having us.

Jonathan Goldman:

Nice to have you guys here. We do cover a couple of other suppliers in the auto space. Magna, Linamar, some of your suppliers.

Andrew Frick:

Yeah, I saw that on the agenda. Congratulations on a great conference.

Jonathan Goldman:

Maybe just to start off, people may not be familiar with you and your role at Fords. Maybe you can give us some of your career background in an intro.

Andrew Frick:

Thanks. It's nice to see everyone. Good morning.

Thanks for having us here and congrats on your conference again. My name is Andrew Frick I've been with Ford for just over 30 years now and I've had a lot of different positions along the way through that, through that journey, primarily in marketing, sales and service where I worked on both our Ford and Lincoln brands and in multiple places around the world.

And in the last several years, I've been more in our general management roles and have the honor to work right now and lead our Ford Blue and Model e-business units. I've had the pleasure to work with dealers all around the world, directly with customers, and getting to know a lot of the different markets. And yeah, I just feel very privileged to be in this role right now and at an exciting time for Ford.

Jonathan Goldman:

Perfect. Thanks for that. And maybe we can just start with the Q3 guidance tariffs. Maybe you can just walk us through the guidance, the different pieces around that, some of the latest commentary on tariffs. I'm sure that's a big topic that we can fill several hours with. And then I guess also on the emissions piece to what you're thinking there.

Andrew Frick:

Yeah, so as we reported in third quarter. It's very important to note the underlying strength of our business right now is really good. It's very strong.

And our run rate, in fact, what we reported was we were on pace to deliver over $8 billion dollars of EBIT for the year prior to the Novelis Fire that obviously we've been dealing with. Within that, are a lot of different things coming in and out, tariffs being one of the big things that we saw this year. It's about

a $2 billion gross headwind and we able to offset a $1 billion of that in different market factors, volume, mix, throughout the year, pricing. That really led to us offsetting a good piece of that.

At the same time, we've improved the overall cost of our business as well, over $1 billion dollars in our industrial system, which is something we were really focused on doing this year.

So, the underlying strength of the business was really good. So that over $8 billion track we were on was on the high side of what we originally had provided as an outlook back in February, which was $7 billion to $8.5 billion. We are dealing with the Novellus fire at one of our suppliers that will have an impact on our fourth quarter. We did share and report that it would be about a $1.5 billion to $2 billion negative for us in the fourth quarter and obviously we're focused on that recovery as we as we head into next year. So, what we guided then was $6 to $6.5 billion net of the impact of Novelis.

Jonathan Goldman:

Correct me if I'm wrong, but I think the shares reacted very positively the day you reported. Do you have a sense of how much of that or I guess maybe the feedback you've gotten from investors was? Your ability to offset some of the impacts from the Novellus fire or perhaps it was the commentary around tariffs and maybe you could just talk about.

I guess I don't know if there are anything as expectations anymore, but what tariffs were at the beginning of the year and kind of how that's evolved. I believe there were some new kinds of carve outs in Trump's policy on perhaps lower tariff rates for you guys or some credits in there. So how are we thinking about tariffs and in terms of the quarter, what were people thinking about the positives, the puts and takes, whether it was, you know, your ability to offset impacts from the fire tariffs not as bad as feared, maybe some commentary around those factors.

Andrew Frick:

Yeah, I think overall it was positive because obviously, Ford is well positioned with majority of our manufacturing being done in the United States.

We are in, we're in the best position relatively speaking to a lot of our competitors and when some of the carve outs happen and the around parts and everything else that had a that was positive. So, what started at a much higher amount at the beginning of the year came down to about a $2 billion headwind for us for the year. And like I said, we were able to offset just over half of that with different market factor improvements and I think that was the market reacted favorably to that. And then on Novelis.

Specifically, our team and our supply chain team and all the way up to Jim Farley and Kumar

Galhotra who runs the industrial system. We were, like any situation like that, immediately on it. We've taken some action to help Novelis and obviously to help recover some of the lost F-Series production that we'll have in the fourth quarter.

And you know as we look into next year, that's obviously our primary focus is recovery around Novelis. So we we are adding a third crew to our Dearborn Truck plant, which will help us recover some of the F-150 volume. We'll obviously max out our production at Kentucky Truck. The good news is the demand for our F-Series is so strong right now. Everything we can build will be able to. And I think when the reaction to the quick action plan and the movement from the third party that we or the third crew into Dearborn Truck was seen as a quick action.

Jonathan Goldman:

Is it your expectation you can recover most of the loss volume next year?

Andrew Frick:

We think we'll recover about half of it. We have line of sight right now to about 50,000 units. The initial impact we reported on was about 100,000 units. So, it recovers a good piece of it for sure.

Jonathan Goldman:

And maybe just circling back to the tariffs for a second, could you give us the chronology of the year? It started at X, it moved to this, it moved to this. I don't even know where we are anymore.

Andrew Frick:

Honestly, the way we're looking at it at this point is the chronology is probably it started a lot higher, but it's less important where we are and where we know it's going to settle in is about $2 billion. And as we look at 2026 and the cost structure, we're just basically baking that into the to our business plan.

It's almost like a labor contract negotiation that's just now a cost of doing business. And I think through a lot of this year there was a lot of explanation around excluding including and next year we're just going to bake it into our base businesses as a reality that we have to deal with. So, it's just an added cost. It is an added cost at least for the next three years, yes. And our job is to overcome that like we were able to do this year in a lot of ways.

Jonathan Goldman:

Are there plans to mitigate any more of the $2 billion or strategies around that or it's just, maybe the more important thing is we have some sort of certainty at least for the next day or month.

Andrew Frick:

Yeah, it certainly helps in a business where you have long term planning, and you want to make the right calls. Of course there's market adjustments that you make. The industry SAAR, as a whole, is strong right now. Pricing remains really strong in most of our markets, and we feel very good about the actions that we're taking, though there's other policy-related items. You mentioned compliance, and we kind of look to say, okay, how do they all play with one another? And as we look at compliance for us, what the way we look at that is a potential benefit for the way we are able to build towards natural consumer demand. And we're expecting some changes in policy here at the end of the year. And in the United States, obviously we're a global company, so we have to look at regulatory environments in Canada and Europe and other parts of the world.

But at the same time, in the US, it'll allow us to build ICE products, hybrid products and electric vehicles to the natural demand. And we feel good about that. It allows us to have a little more flexibility in our production in terms of what we're able to build if you look at some of our off-road derivatives. F-150 Raptor or Bronco Sasquatch packages or Tremors on Expedition and Explorer, those are high margin in high margin series that we'll be able to build more of that we wouldn't have been able to in a more constrained regulatory environment. So, it gives us some flexibility there to build what customers are looking for and we offer all three powertrains. So that plays to our advantage We think.

Jonathan Goldman:

That's a good segue. I guess you mentioned compliance, you mentioned regulatory, you mentioned different propulsion systems. Maybe spend a couple minutes talking about the emissions landscape today. I mean, obviously a lot of policy going back and forth. But where do we sit today and how do you think that evolves the emissions conversation?

Andrew Frick:

In terms of which part?

Jonathan Goldman:

I guess around mandates, I mean, they seem pretty aggressive with the Biden administration in terms of emission caps and standards. Maybe those have been pulled back a bit with Trump.

Andrew Frick:

Yeah, they have. They have definitely been pulled back or we're expecting them to be pulled back, you know, later this year It gives us the flexibility to build towards customer demand, natural customer demand and not trying to force the market. You can see what's happening in different markets. In Europe, there's a tight regulatory environment and you've seen the pricing of different OEMs go in, whether they're pooling within credits or not. In the U.S., we had to expense credits last year to remain compliant. So, as we look at how that impacts us, especially in the United States, we think it's going to be a good thing for us.

Because again, just always building the customer and focusing on the customer is the best thing we can do. And we have the portfolio and we have the powertrain lineup to be able to do that and remain compliant. And as we go into next year, know we'd have less credits that we'd have to expense as well.

Jonathan Goldman:

That was one of my follow up questions. Was the pullback in EVs positive or negative? And I guess we can come back to the question on electrification a bit later, but I did want to spend some time talking about, I guess, Ford's reputation and technological innovation always been kind of standard leader there. Maybe you can spend some time talking about the pro market dynamics and then I guess the software strategy surrounding that part of the business as well.

Andrew Frick:

Great. Yeah, our Ford probusiness, which is our commercial business is really important for the company. It's one of our strategic advantages. We have a huge competitive advantage in each of the markets that we play in. I guess maybe I talk about it in three ways. One, the vehicles in our offerings and our channels. Two the service and how we're really focusing on service. And then three, where you were going with the software and our Ford Pro Intelligence offering.

So, on our vehicles, we're in a really good position because we have the greatest breadth of commercial vehicles of any OEM out there, especially centered on our van and truck and Super Duty business. We compete very equally spread across the fleet channels. So we have about a third of our business with large corporations that are across multiple industries, a third of our business that is in small business and what we call fleet tail or smaller fleets that come in and buy retail and then about one third in the government and rental business. So very evenly spread, which is an advantage. And we've been able to in both the U.S., actually in all of North America, we've actually been able to grow our share this year across all three channels where the number one selling brand, we outsell our two closest competitors. Two to one we double them, or we actually outsell them combined.

And in Europe, our Pro business is extremely strong. We're the number one selling brand in Europe and that we've also been able to grow our share a couple points this year there as well. So, vehicles are very strong. We've been able to maintain the breadth of our lineup, the pricing power within and it's equally spread across the channels, which gives us really good diversification.

On the service side, so a couple years ago we really wanted to focus.

On the infrastructure of supporting the commercial customer and the fleet, the overall fleet customer, and we partnered with our dealers to do that. Our dealers have invested over $2 billion in focusing on customer uptime. For a fleet customer, customer uptime is everything. It's their revenue source, it's their business. It means so much to them.

So our focus has been on customer uptime and we've built, we have now what we call we have 60, we're on pace to have 120, what we call Ford Pro Elite centers in the United States. Those are specifically designed facilities and service capacity for commercial customers focused on them and their business. It's about we've added about 1700 service stalls this year dedicated to Pro customers.

We also have 750 to almost 800 what we call commercial vehicle centers across the country.

That again specialize in commercial business, so we build a really good infrastructure there. We also have over the last few years built the largest mobile fleet service. So we have almost 5,000 mobile fleet mobile service vans that go to the customer and provide service work, which is really important for fleet customers that can have hundreds of vehicles at a location. We can come in and our dealers can service their fleets and again work through oftentimes at night to keep their uptime and their productivity high, that's become a really big structural advantage for Ford Pro and for Ford and it's really paid off for us a lot in terms of customer satisfaction. So we've installed a ton of service capacity for them. And when you combine that then with our software offer offerings, our Ford Pro Intelligence telematics.

Really focused on the total cost of ownership for our Pro customers. What happens as you start to see this flywheel of effect where strong products with strong service with intelligent vehicles and connected vehicles that actually help them be more productive with the way they run their fleets. It's incredibly powerful and we're seeing a much higher loyalty rate coming out of those customers that are part of that flywheel. As an example, we're at 818, 000 paid subscribers now, and of those customers that subscribe in our Ford Pro Intelligence, their parts attach rate is 20 points higher than those that don't. So there's a really important connectivity to our overall service and parts that go with it. As a result, our services as a percent of our total Ford Pro EBIT has grown over the last several years, making it just a much more durable business and helping us if there's ever any cyclicality in the industry.

Jonathan Goldman:

Pro is definitely a runaway success for you guys, especially over the years. I guess the questions people might ask is how hard is it for your competitors to replicate this business? It does seem there's a loyalty component, there's obviously a capital investment component. And I guess how are you thinking about the runway for Pro, especially with, you know, the distinctions you made about attach rates, you know, and connected vehicles.

Andrew Frick:

We see it as a long-term advantage for us and that's why we continue and invest much greater than any other OEM. As the market leader, we don't only want to be the market leader in our in market share, we're over 40%, but we also want to have a much higher percentage of service business and we want to be a leader in the software side as well. And that's been able to build that flywheel and why we've invested in that, it helps us with our multi make fleets. We've been able to conquest a lot of multi-makecompanies. We've done some strategic partnerships lately. We just partnered with ServiceTitan. ServiceTitan is a really impressive company that serves a lot of vocations, small, medium businesses, plumbers, electricians, HVACs, and they're a leader in providing business solutions and we partner with them to provide fleet solutions.

So we would embed our software solutions into their greater overall customer focus and so now not only can the customers. Focus on business solutions, but it helps them run their fleets as well. And we've integrated with them. So Pro has so many adjacent opportunities for us in the long run and they're really kind of endless. And that's why we do continue to invest in that business. And it and it's, you know, it may seem on the surface easy to easy to replicate, but we've been at this for years. And like I said, you know, our dealers alone have invested over $2 billion.

That doesn't just happen overnight.

Jonathan Goldman:

That's an interesting story, yeah.

I guess moving to Ford Blue and the blue portfolio, maybe just to level set everybody, could you just talk about the background of that program, you know how it fits within the overall Ford ecosystem?

Andrew Frick:

Yeah, Ford Blue is an exciting business for us. It's our ICE and our hybrid business. It's really based on, you know, passion products. We, if you look at the evolution of our blue portfolio over the last several years, you know, 10 years we have really focused our allocation on not playing to play, but playing to win. So if you look across our portfolio, I like to call it, we're on the podium in nearly every segment we compete in. We're either in the top of our segment first, second or third. But if you look at vehicles like Bronco, you know, of course F-150, Explorer, these are all, these are all vehicles, and Maverick that sit at the top of the segment.

And they're important because they're passion products. Know there's so many derivatives that we have off of them, like our, I mentioned earlier, our off-road derivatives like Raptor and Bronco Sasquatch. And you know, we've, we've introduced Maverick Lobo, you know, as a street truck. Like it just helps the credibility of our truck, our performance vehicles and our off-road vehicles. So that's the, that's really the role in the portfolio for our Blue products is to really unleash those passion products around what we call build thrill and adventure and off-road.

So what that's allowed us to do is focus in those areas that are those profit pillar vehicles. And if you look at our performance in the market, our share is up this year about 1/2 a point and know that's without having Edge in the market, we had to overcome the volume loss that we had there and we're still up. You know I think it's four tenths of a point on a year to date basis.

We've invested heavily in hybrid where the only brand that has trucks in ICE hybrid and electric and they are the top selling trucks. We have the two top selling hybrid trucks in the industry, Maverick and F-150, which is just continuing to help our leadership position on trucks right now. And F Series leadership. We've expanded our lead this year against our two main competitors. So we continue to be in a really good position as it relates to that and that's in the U.S. and Canada, just here in your home we are still the number one brand. We've actually increased our share by over a point each of the last two years. So we can continue to grow here in Canada and next year will be 60 years of F-Series leadership. So in the U.S. we're going up getting closer to 50, but here we've had it almost 60 years.

Jonathan Goldman:

So at the outset, you did talk about meeting the customer where they wanted to be, right when we talked about emissions. So I guess having the three different propulsion systems allows you to cater to the customers where they want to be.

Andrew Frick:

It absolutely does. It's one of the reasons we invested in hybrid to begin with. A lot of companies went student body left and went all in on EV and we took a more moderated approach with investment across the powertrains and that's really put us in a good position to be able to adjust to the market demand. And we've seen our hybrid mix grow tremendously this year and especially on F series.

We've we've now doubled our mix of F-150 hybrid volume this year.

Jonathan Goldman:

Can you spend a bit, a few minutes talking about the UEV platform.

Andrew Frick:

So our UE V platform is our universal electric vehicle platform that we're installing into Louisville, KY next year. We're really excited about it. It's we internally we've been talking about it as a Model T moment and that means a lot for us as the, you know, the company that came out with the Model T.

It is a not only a revolutionary platform, we believe, is cost competitive to go up against the best in the world, including the Chinese.

But what we're really, and it's going to change the way we manufacture vehicles, but most importantly from a customer perspective, it's going to allow us to have a family of affordable electric vehicles.

We've announced the first one coming off as a small pickup, electric pickup that we're targeting to start at around $30,000. So we're really excited about that. It plays to our strength as a as a truck.

As a truck brand, that has a ton of credibility there.

But at the same sense, we know there's a market for this small truck and we're really excited about it from a manufacturing perspective, what the team has been able to do and we've we have just great leaders working on our on this platform. We had a team out in California that was innovating around this space and what they what they've been able to do from manufacturing standpoint is change the whole assembly process. So they now will have 3 sub-assembly lines that.

Merge into one final assembly. There's a front and rear unit casting and a battery structure that all come together. And what it's allowed us to do is reduce. It's really allowed us to focus on a safety that's always the first and foremost when it comes to manufacturing at Ford, but quality and speed at the same time. So we'll have 20% less parts, you know, 25% less fasteners.

But at the end of the day, we'll be able to increase the line speed by 15%, which is a lot in the world of manufacturing, 15% increase speed versus what we currently have at Louisville Assembly. So we're excited about the manufacturing process. We're also very excited about the product that's going to be coming off of it in the form of the small electric truck

Jonathan Goldman:

How does that the product line fit within the broader EV or electrification narrative? So obviously we've seen you know EV adoption kind of level set a bit lower, right? Clearly still a trend and you're positioned I think probably best to capture that given the different platforms. But if let's just say the pie is smaller in the near term, does the product line up that you have including the UEV platform allow you to take a bigger piece of that pie?

Andrew Frick:

We believe it will because we've learned a lot during the first, you know, generation of our electric vehicles. We led, we came out early on. What we've seen is this gravitation to more affordable EV products, we're really focused. We learned a lot around the customer and their use cases, how they use electric vehicles, including access to charging, where they live, and how they use the vehicles themselves.

And we think this affordable space, which is why we're so excited about this platform and the vehicles coming off of it, really lend to what we've seen from customer usage. In addition, we also have to your point, the flexibility of.

Of other vehicles in the portfolio and other hybrid vehicles and other ICE vehicles to be able to adapt to the changing landscape and the change in segmentation within the industry.

Jonathan Goldman:

I guess with some of the time we have left, we can move to a an interesting topic. I mean they're all interesting topics, but this one, I'm from Montreal, so we do have the Grand Prix there. But your return to Formula One, the Ford Performance aspect of that, maybe you can just give us the background of that and then we can go into a few more of the details. But it seems like an exciting development.

Andrew Frick:

Yeah, we're really excited about our return to F1. It's part of our Ford Motor Company heritage. Ford racing is a really important piece of our background. What I love about the way we approach Ford Racing is whatever we invest in we it shows up in our roud ready vehicles right the vehicles customers drive every single day. So when we win King of the Hammers, you know for off-road it's our Bronco customers know that the engineering and the specifications that they're designed to win that they get to drive every day no different from Mustang and NASCAR and now with F1 that will really have a big impact on our electrification. So we're excited about for a few reasons. One, just from an overall brand perspective and access to a whole new generation of race fans. I mean F1 has

attracted a whole bunch of new fans from older generations to younger generations that will get a whole different look at the at Ford Motor Company and our technology innovation.

And we're really excited to partner with Red Bull and that announcement that we'll have in the beginning of the year. So there's the obvious kind of brand and excitement that's just fun. But what's really exciting for us is the access to talent that we've been able to get at Ford. You know, the best and brightest minds in engineering and design. They want to work on F1. They want to be part of, I mean, that's world class engineering, right? And they want to be a part of that. So we've had we've been able to attract a lot of great talent to the company.

And again, they all want to work on a winning team. They all want to work for Ford. And ultimately what that's going to do is translate to the vehicles that our customers drive and scale every single day. So that's been really exciting to see that talent attraction, that excitement for the company and really just that investment, not only in the brand and the marketing side of it, but the actual technical, the technical aspects of delivering an amazing electrified vehicle.

Jonathan Goldman:

And the debut season is what's that?

Andrew Frick:

Well, we're going to have a big launch event in the middle of January actually in Michigan that we're really excited about. So please come down. But yeah, we'll be able to take you through our whole race season and you.

There's so many great personalities and drivers out there and what we get to do is what we've seen the effective F1 is the generational pull to that has been because the even the show drive and people have gotten to know the personality. So. And we want to be able to take advantage of that in the sense that tell our stories, tell our Ford Motor Company tech stories in a similar type way to really connect with the work that we're doing with F1 so.

Jonathan Goldman:

We should have had a clip of a Ford versus Ferrari.

And I think that takes us to the end of time. Thanks for joining.