Ford Motor (F) 31 Jul 202020 Q2 Earnings call transcript

Good day, ladies and gentlemen. My name is Sedaris, and I’ll be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company Second Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. time, Lynn like of Antipas this call turn Investor At to over Tyson, Instructions] I to would the Relations. [Operator Executive Director Lynn?

second joining today Jim Operating Sedaris. Tim, earnings Hackett Tim the and talk President will to Farley, Stone, you, with Welcome Chief turn Financial to for Ford and Motor Marion Thank Officer; in on Officer. Q&A then, Harris, -- Chief some Also then to results Jim everyone quarter, our and CEO; call. today Credit. Jim and are Company’s Presenting and we’ll our Hackett, us our Ford quarter will CEO, about color turn depth, -- begin more Q&A. turn are to

Actual non-GAAP materials most on to are our at differ results discussion the rest some references. earnings statements stated can measures includes deck, in differ from the Our cause These comparable forward-looking shareholder.ford.com. our of GAAP Today’s found results the XX. the our included earnings be of significant appendix are could factors results which to those today actual reconciled that may U.S. with slide and most discussed expectations. along about include

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extremely disruptions proud will solid tell a that you all in us sheet. weather remains Tim and details the the So sheet balance to further provide we’re moment headwinds. further on positions balance to and

the family future focus XXXX new earnings have are us F-XXX of shape the on and packed this human-centered off new with Ford. with the last fully vehicles to Bronco Ford’s highly through we crisis represent in ownership revealed of improving on fast and desirable constantly design quality our upcoming not along they’re experience updates. iconic vehicles air vehicles. Since features. own Mustang over Importantly, connected managing And and innovation ways through author enhance our is to all modern These vision, -- Mach-E destiny our intense the mission and manage call, knocked product

we customers and Let from and invent all even was me new that for is market love F-XXX will The for on give The capability with new upgrades on dozens this a the the deep design in truck and believe capabilities years make showed and want, focus proposition stronger you decades helps new that the customers that’s F-XXX. version packed June some of color XX us new what leading features born human-centered will unobvious we customers. innovative value. features our an of

F-XXX We’re share. the the in sell by which going in An with change in great new requires high model also plants time, is our over course, one of shape new quality, City. down current in on of news our Kansas market great to and demonstrated in -- important launch well the now Dearborn as

perform that Lincoln speaks Corsair. the series number and the share The most XX.X% points optimistic SUVs candidly while the strength and after basis that’s points industry in XX.X% quarter to For retail to earlier basis share in Aviator month, our sales the to F-XXX, Bronco. reveal our decline, being the this The exploring the the all U.S. up in Reservations Bronco, points they was from was within total segment to Turning even our trucks we projections. immediate up XXX part of enthusiasm XX.X% share better XXX and for as the for XX well, from than gained surpassed to example, of initial Ranger due new our outpouring public basis itself.

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the on and integrated. Then, system, drive braking perfectly I pedal And use regeneration the one astonishingly Now switch battery was were did smooth driving and powerful. bridle I mode.

will pure experience was incredibly big you Yes, know, and You nothing foot performance left a extraneous. curves. at vehicles what [ph] soon products the same quick it’s and tells Mustang. exactly to sedans to on with commercial and The enjoy can can the smiling about Sure face need these I was see tell incredibly you and decision me I to see is the was to paying you our as my I smile took time, cluster capital customers off. if intuitive experience. better I this I come controversial know our I life, spending feel from better SUVs, because trucks and When reallocate

where and today we in stronger the share. can strong Ford earn whitespaces where grow in more new pipeline even have returns We areas is and its products

competitive as age for we the years Now these for reputation vehicles. XX% third-party target profitably. plan market over U.S. new generally in showroom we are as of showroom on and improvement to By by gained have products. our we new to just exciting XXXX. more believe our place OEMs the be highest well in. electric a good launch I a much touch several is potential with have younger or to moment Ford more replacement and share age really these take It’s measurements, our reduce brand want products by X.X to and the rate critical improving

midway billion an that through We’re all-electric vehicles. increasing invest spend more more be to of through on our mix about there’ll $XX.X XXXX than and after with plan

of hybrids wholesales forms, electric, will excuse we’ll of XX nameplates come and me, world the quarter, electrified plug-in choice XX% our our available nearly the bringing hybrids, fourth power of customers around Ford by For electrification. some to customers the have with to from and pure

to XXX plug-in will Lincoln’s future be emissions mpg These as just I We are people deploying the territory vehicles these, follow you’ll and ago. to China points PowerBoost F-XXX also EcoBoost and see this Mustang a years this our leading followed our as our as months are technology all-electric across unfold versions improved Transit possible by many well as with are hybrid, the lineup in Escape a BEV. of ahead. vans. and hybrids, did are big technology and and estimated market ordered F-XXX price will one fuel and all-electric Kuga Electric an of Mach-E our just and we are of the offer capability, an that which bring as decade in Nameplates economy part

vehicle others as accelerate significant profit is become positions strategic in alliance to Ford run significantly years which Argo well-positioned This in and global vehicles execution a will will finalized well to we self-driving the unmatched electric long and our AI, -- new know, source together. vehicle this and revenue you alliance now strategy. like June, and commercial be This expertise but compete few with also Ford which VW with alignment a come. race of strengthens of combines of Maybe the one, journey our As now reach Ford can. VW,

in moment, our update on redesign. Finally, a Tim global of an will the progress provide

continue Ford and of strengths including restructuring and has effects more smart expectations that to crisis our as era in we color even the our through the around We world, costs. waylaid I’ll that, we’ll aggressively business vehicles Obviously, manage immune one underperforming profitably smart the pandemic. for quarter over to pandemic, Tim? a rationalizing new we to the by been isn’t win portfolio vehicle a play to reshaping product to confident, this attacking for an turn our the our But the the company, for market growing continue vibrant to are that it of operations With of we’re world. on year. the remainder Tim create and

Thanks, Great. Jim.

to as in as our the execution lastly, launch back us for including our the fix like the tangible global vehicles, areas essential industry addition commercial customers. newer held of vehicles progress business growth. focused And that acceleration the And a progress strength in In past, and of headwinds, in electrification capabilities operational well and results we areas this both of face have of connectivity, unprecedented long-term our SUVs, and in quarter, execution. like cost to favorable products and autonomous redesign as fresh impacts more of our portfolio demonstrated

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our On we As July The production XXth, outstanding cash recovered reach billion in billion restoration corporate revolvers. $X.X full near into the as repaid payables continue resumed we late production $XX.X and mid-May, balance our of June. and payables third quarter, in production will sharply.

credit $X.X July from of also We of extended billion XX lines our April XX. to

of to the balance target of our if there’s sufficient closures. plant declines, year, current almost another maintain demand or exceed COVID-related Our billion global if or cash $XX is through second of this billion of wave half even liquidity $XX

to and in to the pre-COVID, Looking year, XXX,XXX than the units wholesales, expected in manufacturing. in we due revenue down this wholesale wholesale the both results reported about color give automotive, on To suspension are some you quarter. earlier at had XXX,XXX higher we be

automotive by driven in the volume. EBIT decline Our decline in was

areas, The net $X So improvement both by be cost. a this costs of compliance structural up to in reduced suspended improvement production and marketing, was regulatory one-time to of the which was by products offset for primary costs, cost both over were do We partially partially net lower and warranty. due offset pricing billion warranty higher actions like a cost new higher four for material and year. and expect

was the detail, America shut manufacturing at in in our units business other for more like but up Looking smoothly. regions, came North down quarter, six the weeks

of pre-COVID quarter. production America North levels XX% operating about about fact, by In the was end -- at of the

as by actions revenue lower were trucks and discretionary quarter. and EBIT. America, declined brought products, South heavy was spend as exit with the the in laser mentioned, the to addition the we production In rental minimizing North such up of In to idled of sales plants benefit Market aggressive driven through and the year efficiently. improvements The Focus. largely actions, on mostly facility to Jim yield and our But Fiesta including the lower in redesign unprofitable volume global share, share America, our companies both last as focused which and on North America management of team also all reducing impacts spending. focused team management costs, media costs, elimination

improvement by redesign, global Ranger consecutive our and commercial as as favorably However, pickup this imports. cost segments, deliver of and In a to commercial third over all as costs focused successfully structural passenger redesign, the are since six XX.X% roughly up track of Relative headcount on extend reduced impacted globally our also this a select global more did during end improve midsize billion year XXX Europe down Or a as Ranger three of approach EcoSport customer benefits on of the total Relative quarter by well plants of focus was position, been eliminated results XXXX. to the completed, began a Europe, mix. and lower Europe. by We’ve an balance footprint end on points. the reducing our strengths, $X positions actions reached year. to manufacturing positions XX,XXX basis we leadership Profitability May product Europe, vehicles of in we to by in the in the our of Western sharper improving Xth. allowed as includes in have to be in cost reductions vehicles, of This increase XX. X,XXX June, number was this vehicles, the came both share of quarter share. hone including our continue in year-over-year of the X,XXX The we two profitability, to Western by reduction will us facilities gained of by positions which our third well,

of for portfolio on are this vehicles our COX vehicles. commercial We supported passenger requirements track and meet new growing electrified to year the regulatory by both

the new reached and in Kuga first our XX% collectively year, MHEV mix. of mix reached For PHEV half example, XX% and this MHEV Puma

Now XX% are our region Lincoln the to launching China, wholesales, X.X%, and market and up its posted digits, we from the locally Lincoln increase Corsair, since also Transit, consecutive as were of first third on products locally XXXX. In basis Lincoln all a sales. sales our strong quarter again new Transit from in gain second wholesales to share produced the benefited families horizon, quarter share to and its launched only contributed commercial powertrains. newly enjoying about Aviator the vehicle Corsair hybrid the now. highest China of is points XX post the Escape produced ICE double we’ve and

Our strength which JMC, at increase partner, a by vehicles in points JV commercial basis XX supported a our was gained sales XX% in share.

CapEx through including to function cash and mitigating investments Autonomous COVID. make delivered capital, we In efficiencies. working has discipline, the localization, driven business, the profit step cost on commercialize also done continue China’s as Vehicle China As by our testing. a benefits job impact in great development, engineering as other flow change of to product regions a with well focus mobility, of

believe constitute we the test vehicle Argo test largest urban what six footprint any of AI self driving markets Our active is developer. for

in we AI. our -- generate Jim which Argo was VW on a mentioned, the Argo self-driving business, which is quarter, portion system closed AV generated gain with This As recorded do deconsolidated. Ford the new of deconsolidation, item. mobility continue now to a and I consolidated special our earlier. $X.X AI, out billion, as partnership AV to build our our connected is of also levels Solutions expect results invest our the platforms. continue FordPass for including in similar and investments the noted to In in we at services, reasons Commercial mobility reflected and capabilities we Despite

centralized enterprise team the for human-centered accelerate of we’ve fact, to connectivity our customers. In delivery experiences our connected

provide expect also focus improve We quality. the to this to experience sharper benefits customer to enterprise and

Credit a for delivered Ford and its strong quarter, value uniquely customers profitable demonstrating advantage. competitive compelling

the performance in reserved we and record levels was -- were macro and Portfolio in levels. created first delinquencies actions adequately quarter record low by prudent Our were charge-offs COVID. of the ensured light uncertainty strong,

of Ford Credit Lease May, without auction auctions, close an resumed XX% provided and customers customers was these the began portfolio. below extensions to the this performance We U.S. lease remain through X% inventory with unprecedented expected, than have we move. XX% are off sequentially very pleased falling better growing about industry of quarter Over X% payments delinquency and year-over-year. down prices. and with up of share average and performance

we values estimates. the auction saw full healthy third-party volume present, consistent However, year for May auction of At X% recovery we a prices. about in forecast lower and with

and continues economic no significant Now impact be COVID, the profit distribution. $X.X with steady Credit. guidance. lower environment, COVID-related from to turn we supply of parts and quarter, automotive current profitable the In for or billion demand the $X.X of new to expect no adjusted in Ford global with me of meaningful EBIT weaker assumes Guidance economic to further billion, to and reflecting disruptions base global vehicles, third services, the production let stability improvement change

on upcoming fourth Our the to of quarter thought early the recent quarter, practice comment helpful. has we launch been some would only, because be significant the in activity color

major will production launch adjusted impact quarter. quarter in the our with worth lower will fourth shifted driven This ongoing to reduce F-XXX the which more We of volume wholesale the F-XXX America our the disruption. and new expect We quarter, North line UAW launches launch than fourth in be the and of by have a in bonuses loss in Note EBIT quarter, anticipate downtime the the fourth to industry that roughly non-occurrence significantly contract $XXX COVID-related in ramp-up million. volumes. is offset changeover impact XXXX the

the Bronco in Mach-E Our a Mustang launching The on wholesales level fourth not Sport limited new will have material our results. quarter also are of and impact quarter.

comments the We we’re year. that fourth well-positioned we what be turn also lies With products expect excellent adjusted and for I’m last to full to, a few the move a that, to deliver All back for that and Q&A. me quarter lower Ford loss services year. our Credit expect said, the optimistic EBIT for Jim, ahead to let in versus for call we customers. before profits

Yeah. Tim. Thanks,

this few base, safety and a a motion. reinforce face effectively operationally, headwinds losses, the about want second in following to I mitigated mean, the navigating In maintained protocols tenuous quarter the was supply while and Just comments, we year. aggressively everything of sector the I half unprecedented robust of production

We’re keenly that’s Farley Jim focused and here cost extraordinary. discipline. effort just an cash led on

on We are with heard, there. and you’ve F-XXX, quality and ramp-up focus the all ready the optimistic spirit Mach-E doing job and production of Bronco, Sport a as high the of great extreme Bronco the the for

is continue commercial very continue And We a future implement to and of refresh AV, in we going our redesign great from investments. We results have well. vehicles, We to on Tim, show job important and didn’t connectivity as that electrification. just the global we heard this. you this and spending portfolio measurable did stop did

financial flexibility, sheet liquidity took time. We have extremely This in and ensures know as our balance of a particularly we position an this actions strong the discipline from uncertain all year. earlier our we management

that, So, please. to let’s move Q&A, with Operator,

with of Bank comes line Instructions] first question of John [Operator Okay. America. Your from a Murphy

Good evening, guys.

at us question, you’d the look first a Tim, given as of guidance we Just on the sort quarter. second

came billion and changed the mean, than I’m curious, you you could that. of mean, to what plus well and levers, just forward. water are? talking big about think EBIT I here. then You it what in a And going kind price blew seemed and $X major out I cost, better of loss, be two the do you benefits about also, think be those which factors if how sticky you’re

how change the -- So what just is really durable and change?

-- by the teams. you at and quarter in the performance Great. work, wholesales, production is the our that Again, if the we keen safely, Ultimately, end return mix. on by And than and portfolio And losses quarter down performance strong. look to the reductions pricing favorable of auction credit values well. cash execution and sales comes had were overall the our second was operational we reductions initially by management, is Ford cash. teams. and not anticipated focus to came and We really inventory vehicle for in greater environment performance strong the cost products as and only which Credit but with base near There cost also full production on

And execution. end So, it relate as of strong again a the part in is to second much related -- -- going your day at the prevail year? how of the I as was to guess, question sales

of that of I that austerity you sort to mean, a outperformance, of just does this? was you Well of was response said, think is micro, of it -- how in because sticky sticky is that measures How or and as do yeah. sound lot transitory it execution, sort like some sort

a of the important of in really work operational sure ahead really some it’s to sure I We’ve expect hard is with the year us for got sticky. work back and very pride the think drive ourselves in make quarter half execution lot we of to our guidance to continue something launches But excellent going profitability fourth manner. the operationally in operate about. in we’ve an to accelerate and talked for continue as we we’re third the in grow improvements to the quarter in areas fixed is, reflected that on

than then we of of at a question, year. the lot Bronco truck, those -- about a deserved, seems sort when on, talk as from is the much But family. the vehicles it is Sport when around second which of well of two is, the Okay. think, hype at this launch, like a least And Jim around there opinion look just I is the is you my more excitement start there well something Bronco Farley just lot this even

jeep So six of five or be Bronco vehicles understand, just portfolio down has. four be what we sort looking at line, the horizon? am years I a there’s we something and will there on above potential years, trying more that seems the could beyond is what mimics at where trying a know and to just the mirrors years, understand to the moment lot more it what like of

John. Thanks, Hi.

Bronco our Jim has styles, numbers nameplates The far appeal reception been we and in broad we are positive. the mentioned, and Tim reservation don’t these in have body As very two portfolio today. are what so beyond expected three

So ourselves we’re not getting ahead of on Bronco.

ambition accessories to brand, like Ford within is create we do We the of F-Series. have sub-brand and XXX over to and a quality like a forget our products launch with world-class these don’t lot work to launch do have to really

years, done, be like, thrilled openings opportunity learned see way, over that we’ve to in our Bronco to great to we’ve customers a and our doing -- we or from is Ford John, we a do F-Series own with market. decades, that ideas But So these will like expect see focused Motor where the these we’re there we’re always to and body market the customers, we have like, I start foundation own names in for, what three Company. great the no we on. of family three styles. for targeted in lot that’s do have for shortage Bronco’s rollout would

play by I going hold after are ideas So specific wouldn’t ourselves is underserved. Thanks. or to to benchmark another against win customers our OEM, ourselves that

very Great. you much. Thank

of line the from comes question next Your Rosner, Bank. Emmanuel Deutsche

everybody. evening, Good Hi.

Hi, there.

but either net XX, basis, when the billion an year’s this the shutdown for we quarter, My the the forward little look how better continue the bit rest to for something of be qualify temporary think you for are time change on us question actions over costs $X.X so business rest that could anyway to of extended had a in still much in at assume cost F-XXX year? shutdown on for structural you of on is dimension then going overall terms the your versus or understand year-over-year performance of the helpful that in dimension? how first quarter, billion $X.X the dimension could us and the Anyway could maybe to trying period about When of I outlook? slide more those magnitude units, structural to impacts to about weeks of anything of

I Hackett, think, Emmanuel, Jim So, Tim. it’s going that I’m to to send

Jim. Thanks, Great. Yeah.

been actions, as taking the business. is cost for some we’ve on focus it been of -- talking fitness design we relates about So now the and time have

And going making on so for to focused to as be the continue sure with the right and a design passionately fitness priority. business we’re

certainly, and also we preserve and so costs response from the ahead. there reduce areas opportunities cash to that to our environment. in and this redesign are learn But identify to looking opportunities things we’re appropriately are undertook And fitness further accelerate at to that

fourth So the we have that’s look -- and the -- the out. and essentially have go as on we in reflected otherwise third third say quarters really what I that guidance, And ahead. to

Sorry.

the… around was part second The

Yeah.

…F-XXX changeover?

Yeah.

contract of is UAW we do X impactful more side, On of -- the than UAW the bonuses launch $XXX try it characterize million. sorry, F-XXX essentially, is to

that can beyond best-selling we vehicle see America’s in quarter, that, business. gaining the years more share of to of popularity when have best for series can Certainly we is claiming and overall there not the say. much you So our can XX you vehicle

to back a ramp launch successful down, the on our the will impact with expect big up a have loss. we never ramp quarter which So

this $X your to during of for your billion global expect of opportunity end think, little plan terms basis is or I about the thoughts and accelerate that remarks the benefits is what then program just to the think hoping you Thank a it, from to by the to on are beginning to accelerate there? of it since is, what that opportunity in first latest latest I XXXX I was of understand you. XXXX year. to thoughts industry versus the how this. get wanted you and it bit the, the the Okay. And use I from downturn actually prepared guess, potentially redesign the more mentioned

which $X of of we it when in this positions As in XX. well of the of the cumulative. Europe been six beginning relates completed ‘XX as by as actions already, in of That in XX,XXX as cost structural expect announced Europe, since X,XXX well includes X,XXX Western to the roughly by reduction it’s the positions a mentioned reductions improvement total on year positions I Russia, facilities to as QX comment, footprint billion was have have end manufacturing

right billion So, of going the cash. $X.X to-date, again, opportunities as we’ve design look in of our opportunities center this EBIT us of business the moment. charges at for we’re make to incremental to and incurred billion sure look at we review order ahead and out to the But we’re to $X.X at nothing announce

to to go, $X.X up with $X.X go up in you billion So billion billion to to $X.X cash. and charges

focused The it. on other but thing on nothing you so result well, the keenly as new to this announce you’re execute know, to at time, continue

Great. Thank you.

Thank you.

Jefferies. with Houchois Philippe of line the from comes question next Your

because when couple Good Thank QX going and is loss got diamonds weaker listened costs, the a Tim, assumptions, very going you’re definitely can lot not launch on into Yes. of loss, on their that it afternoon. questions. no some -- seems guidance that much. wonder of it’s of the if and range you, a about you to us QX lot like give would the of a back potentially. potentially said kind of like sock. depend outcomes I things One back you into comment a I also I’ve

you, a is sure with the under investors the that lot also the expense QX. expense the into interest starting was how work controls, you can quite don’t lose interest quickly That’s of are we doubled capital get also expense help What in question can we to almost your noticing interest doing, cut terms couldn’t done deleverage protecting now and the terms an of a -- and definition point discussion earnings structure. I so Another actually momentum. and operating to impressive leverage? to currency in cash was make you’ve of you

Great.

continue week. so and as at where that our as feel have of comfortable expense over of -- we’ll position. drew And business half additional so year, we out, and the $XX And in So repaid roughly to we’ll ensure per then, and suits I And balance certainly anything liquidity, your then and this credit, such that position, half and debt the delever again looking and quarter roughly as us that with progresses. down will liquidity the year we as we repay was half assume we we opportunity revolvers year expense interest performed the the confident first be see on progresses. as levels and a expense. in am is the to of revolvers and earlier reasonable a including sheet billion I well. announced we this come opportunities cash back at an look about reduce year. down, but can start bolster feel we’ll course sheet a that, with cash you year-to-date the has $X.X to to S.A.R outstanding for the comfortable And position, debt let with we The improving line very way beyond for a units But opportunities repeat cash as - balance not think S.A.R, of interest question ticked it be we billion XX.X looked strong the me the mean time I throughout have see this It interest at colors improve time, our do only add a expectation. it position up liquidity million strong more you that we

you. Thank

Lache the of with from comes Research. question Rod next Wolfe Your line

just at was that’s But costs, question XX mostly is look structural costs, savings. I that bridge is everybody. in because $X revisit about I Europe when big number. look that when that I’m your cost obviously hoping variable your I see offsetting regulatory billion costs, to on Europe, of And savings at slide the a zero. Hi, I assuming

that billion higher may whether structural wondering people that the $X.X and question are So, about of could that first structural we off your here kind the but away, variable back. -- go cost kind shifting half the that, from Is that the like of costs some significant and permanent, risk either be second coming there costs of the see just a get inflation half proportion that material be taking warranty of of the look level a that freight space? there some is or

to cost crisis, that Yeah. and more get before entering crisis. XXX focused you that improve on during COVID has what opportunities, time the is into this fit I guess seeing line that want the of are say to been very structure, our but not team just I results

With the done the to crisis, our reassess the has structure have cost can to we we’ve we had teams what further and demonstrate great all an again, work around areas. swift job in action, take we world opportunity in how to opportunities a ourselves,

mindful time. more these can into come that we’re volume over to the we’re We are that cost in costs, structure going everything more we But are it certainly costs and fit do shouldn’t to sure going make but of to you’re back what ways that suggesting unwelcome. related be well, get

year. that a talk or the beyond produce talked and of the XXX,XXX into offset was year about on is costs big the or benefits higher launches is you hoping pricing scope And And positive amount possible? about, it need that there. significant question the Okay. what’s would F-XXX is to potentially to could the the put might I there capability that a talking on next specifically just pretty just bucket variable about Bronco, that but you there of take what units some you a just that you’re disruption, obviously, it conceivable you

tracking on to a going day that night, I’ll the so in in Jim is the make He forward. the understand can you the have sense imagine that, calls there second. him of the and be But so. of just gotten Farley, So, the many ahead costs doesn’t precious, sure Rob, that I we’ve these really Hackett. with Rod it’s and to make Jim effort volume to how you can working I’m structural guys without that that ask you I’m looks Europe absorption give about put effort you want on it has pandemic been because

that costs there I as just that we’re now, portrayed kind don’t worried going example. not is happen. of variable not know, a think for you smothers big anticipating I’m Right us, to inflation, that avalanche So you that’s

we trying efficiency suppliers to start fact, enjoy In all where get levels to some to of up back are savings.

the think looking to color step add do and forecast, talk want but understand great the variable So the news think costs. I Jim, and challenge. Bronco, about I But I were to just way you want I that. at you the that about why about back to just

Jim. Thanks, Yeah. Hi, Rod.

street Mexico. as Bronco’s America our Bronco then and down where we maps, the in in will So, is make right Ford from the North Dearborn headquarters down

that As as operations XXX,XXX the upside. pattern, we’ve we far Bronco over so shift have that to received reservations some

lot not are orders a have work reservations We do because of these to yet.

to enthusiasm work So that we lots have and still great continue lot we reservations. is get to of mix a of the verify

which is studies, has team a the would opportunity, have we So another capacity do us. some shift to commit big it multiple deal for

really Kentucky prototype reception sustained great. in F-XXX, and been we’re As looks obviously now. in has you On build looks the both the positive and can Dearborn imagine, in but

for is milestone lifestyle obviously on big manufacturer all We’re plan and for us. supplier readiness and the OTA readiness, with a the this software,

great So it’s go the launch. long important have deliverable to we way And for the the a F-XXX But team progress. made team. on has

issues and addressing We’re them immediately. finding

like feeling would we’re is portrayed yes, upside there Bronco. for So on is I and plan,

Great. you. Thank

Your line Spak next question RBC. the Joseph from comes of with

maybe asked the a the delay, been you. has cadence bit just guidance If same Thank different? this guidance, you second about a issued know have half Tim program little there you would the way. wasn’t basically

months. for delays ready that a did We’ve the the what’s happened what happened a It’s re hard for to us launch. throughout few over great past result were with timeframe had undo of the job teams commensurate shutdown. And me having the are -- -- getting production as

you the to been certainly, if less fourth to back those of half shift essentially we’re of profit. at in quarter look big so has impact aggregate, guiding $X.X the And And $X.X there as year than billion billion the a in being fourth quarter. F-XXX a to the on result of losses the in

back levels and of the sheet, we flow if debt cash so the on revolver that indicated. balance you just you for the maybe cash forma Okay. June, And pro part pay and

in sort is cash levels. are here net more have year. the at fourth December little cash something least you redesign a there and quarter losses of more to then the or some back do this more beyond You bit right But CapEx

sheets see? usually years, the I sort that -- sort So, on still because playing playing some But out. debt. sort would know out not are cash are or see next you How I of cash I do the see there you talk calls of the balance of automotive don’t do of necessarily you how net about liquidity, couple over

Yeah. cash emphasize be social, working first, capital, effects. EBIT and the expected for of the we timing the the higher would the mean, the flow I to want be than launches due quarter quarter, and to seasonal third I lower fourth to

from liquidity in that out, have. we further course, we our ability a look you debt of confidence the As have, to standpoint, repay

where we what we was related said a We that have in have declines net cash. plant $XX to in roughly And and/or or cash. would debt closures COVID equal more again billion scenarios that even have demand

downloads And as toward future, we’re look we dividend base our and pain come but well. the long-term to of cash cash our driving for as free sharer debt, us will receiving of even with is none and the the for more focused our certainly course, margin greater out paying to through flow dilute that and opportunities opportunities our liquidity So expectation and optimizing purchases credit, on to that. consider than

you. Thank

the question Stanley. comes next Jonas of from Adam Morgan Your with line

versus much. EV it’s buy. and question very question kind Thanks is batteries make of My a about first on

So GM own in LG. making venture joint with Ohio with a their is batteries

skateboards lot only Would consider capacity. has going not the And is thinking? isn’t to you physical of OEMs. specifically batteries there What other doing of sell EV You’re a Musk options offered the drives owning one, this that? route or powertrain plant but in terms that Elon and that like to

source. maybe buy It’s own around, Jim. ago, make a Hey, year versus to started question Adam. that when lines you. Thank versus arrange to see It’s a starting we

supply people side had estimation. this. are this met of with our deep the and the a I’ve a of in So number we that about was discussion that it

ago supply that has through In Gigafactory. fact, a since this [ph] really whole his team up deep the dive went our chain six on EV ramped months

so advantage And There no our does in is Ford the that in not cost terms of us can is factory. there sourcing what a ownership warrant draw capital as into migrate to our a on. plenty owning own or there

supply works So that we for there it With works. I challenges some going just go that It are can said, confirm that chain the actually litigation on. some path to themselves. to us you now. is are in There that that’s between is

of really plants the they would here to factories intended well and supply but States some batteries in get which some doesn’t is have that, is in for matter It believing quickly. to way settled so in we’re be it another positioned investments way MCA of us the the these may, confuses it of it as about hopeful U.S. We’re benefit suppliers built how happen. gets of the that saying States, their their the settled, United will United

in and And new your asking new it I a kind Thanks. consider -- Jim your for still then specifically still you role, I’ll role. follow-up Farley. just of Thanks, if Jim. you’re you I’m -- because got Jim,

major If call stuff years subtle Thanks, some big, the want this different three of from out, Jim. are motor years what radically the on tonight? highlight Can you you not how Ford you folks the kind think is company today. to of now changes, to versus three stuff, big that

us today, company. to deep we a a with ecosystem build have say -- Adam. we’re would transformation tremendous those and really good we would I great customers, how It bailment, the real characterize in areas commercial took to opportunity Ford’s exclusive grow Yeah. relationship have upfitters, we and commercial know in deep as I is at example. what the decades distribution, Thanks know

it but mobility look of to places a forward years, part you of three Europe, we can of is Ford’s in the Volkswagen As of business like be expect lot in commercial. to transformation parts and cooperation will that a commercial change five other the next

that eyes. new expect already when creation transformation growth build the would customers and Adam, at, built fresh tremendous a you So business opportunity we capability did areas approaching Ford’s we that just especially. we the we’re out for set ecosystem those we’re model it And can good value I like say and the really to have be in of ago decades for like opportunities our and and for businesses with commercial these humbly

taste gives see I profile. well how think things geographic for tighter in you that a as good much we as

that. Appreciate Jim. Thanks,

with of comes question Levy Suisse. Credit Dan next Your line from the

versus with up per could would wanted be not everyone. other a And variable be give on vehicles or would profit per guess Obviously your of of know here. expedition the maybe Hi. the variable, for how if us there, or perspective navigator. Good that’s you where it’s going you up four unit, the to a it think disclose start potentially I Bronco level we venture I and Bronco I the unit, taking to I question sense maybe the but of lineup? explore don’t you just stack an at in think F-Series, to been But the above just exact could case. though, from evening, should below that Thank question. could profit right

this should competitor area some quite well Just thinking profit opportunity, that be in us and we about product. the Bronco unit and how know of standpoint, we give in a sense your because doing per from that

Yeah.

in Because making right? the facility I’m decision, sedans know thinking, first you of the we’re in we’re money. the reaction made where my it we God some making So replaced thank what

I’ll to makeup and there. product. in coming about that and So out question some you think got of And what’s going talk the targets Ford of with let what’s about Adam’s of and you our last Jim,

the Thanks and on times. localization here we the are existing in with have we’re the the strong Ranger question. America. for Appreciate Jim. us that Ranger large U.S. was Sure. in of breakthrough Sport based global scale both the Bronco North a already that the And have Bronco on Ranger very platforms The successful and real CX performance very many Bronco executed The

Bronco to would go have And get. the scale great industrial we actual And that a of the for pricing kind part but Ranger, obviously already so compared our of Top [ph] the profitability, product. you a we’re not specific Hat can into going to imagine

-- the the CX So been as very Bronco has It and scale global again Sport. platform the has for executed. well

utility market And not so the in say well maybe. and we robust care terms it’s pretty very It’s off-road the would of it’s it. the in pricing delivered known these we market, and see not, I a we’ve premium,

right standpoint, our and said, rough the of but So that we’re we as the for only platforms, not these segments. Ranger. premium executed replaced CX on Ranger, segments Jim in coming product we case And the very of focus scale know and our off high

feeling we’re about the margin. good really So

hiring to build And you’ve for people. whole all in, in our product vehicles want build more I just we’re And -- Michigan about, here to X,XXX look, this sneak we this is, the seen by America Americans to because people Jim, industry. campaign -- in I X,XXX Bronco additional in Southeast

with discussion product. I in President, of the proud explain build be get So pandemic the so job market kind I a are it’s we in know to this but that it to middle the because just up to the teased going Ford’s able about here I people to -- in of with and was a it hiring came challenges be

a really it’s story. So news great

the could X$X.X to XX. Thank as color. that more on just you. electrification EV That’s the and I commitment budgeting, was at really half believe helpful If question XX a billion least point I Elon squeeze a of just one spent starting you in

and But you’re not spend more is starting the to on XXXX clearly us your an all loaded. just be journey as it’s backend So you’re obviously goal, going is end spending then. EV,

accelerate $ fair billion okay, XXXX. you plus will if is the assume $X spend I had to $X assume, after that So it that billion a billion, year to so still X only

to electrification think spend? the how So of

to Jim, Yeah. one? take you that want do

Sure. ‘XX tail the F-XXX vehicles. and commercial for and Again electric number again will appreciate your That so two a the the in expect question. be MEB at years product our given Mach-E Transit vehicles, Obviously as a key was And you of will the and very the the electric. really that end nameplates announced beyond line We’ve refresh play so key us, spend globally, we’re the continue they’re we electrification once billion ago. of $XX commercial our and component figure to up out. few of the and and can

well. like And the we’re So products $XX seems the really but, around not and the as exciting lots on F-XXX network and coming customer of interest delivery seeing we’re the of ton both cars billion, large a with said, come with package those, done. we of growth have we like ‘XX a passenger and commercial have but you customers right as the corner, F-XXX for out from to are some Transit, of

We’re not you’ve think than going to accurately. be and specific what shared, but I we’ve it characterized more fairly

Great. Thank you. color. That’s helpful

Your next with from comes Brinkman Ryan of question line JP the Morgan.

Hi. Thanks my for taking question.

but America, a South profitability considerably on to decline in your revenue, I First have XX% grow expected would XQ there slightly. improves given losses in instead

region? actions how more at from it be that there restructuring fully cost would the from to rate in that you’re would cost, you get come the restructuring not the point more but there? more returned progress that the Are was implemented already announced, you if coming action’s needed and or you think profitable already looks to the savings Now help are but of do of price and volume now there

in started. I phased out for manufacturing production ended of on America, to as at dealer better the unprofitable Well, engine compared the terms off the availability Sigma is and our this really operations and vehicles. remaining some production. South serve the Jim San a trucks the other We discontinued has But to the been of network markets mentioned focused ceased Pacheco heavy Paulo there improving of think, working We Tim Fiesta, business, did exited journey restructuring based dealers. customers that Jim hard

still to performance. short-term that’s this this But why you want let Jim, in be you I story had is answer yet we So think think than completed. better a expected the to I

Jim. Thanks,

place put improvements, marks, it third quarter many ago that years really said, And restructure think, consecutive year-over-year although, in progress quarter second Jim South the The as America. I still we losses. the of reflects, to

headcount got also as of quarter beneficiary there. that’s in you expect. We cost taken have for out a pricing, the We’ve while. containment. a lot And in ahead consistent saw of would took lot we business we’ve downturn lot which a of the of the second the a with currency is for of But situation team us with the the big market down think allowing been I COVID a

until restructuring said, going sustainable. our they’re to we’re Jim As keep businesses

do. to work more still So

team is pretty but the doing South a America challenging, great looks job.

few there new of products slurry a ago have associated was and We that. years costs with

think we down a the we was the I from discontinued. in lot really about vehicles last that fresh point share still do a good We lot quarter. So second It of a year, have lineup. with was but that gained to a

the as down improvement So as consecutive not profit it do big our just Jim third -- said, we have or vehicles very credit accepted. way losses. have do would we I portray are have the team are to work but and we a well more to really revenues in to

to to share, that had in you if market X% are recovery that you the sort in there to, would Lincoln, your of of product a the distribution market lastly, target at grow share is with while? programs even where seems what now pieces you place then languishes grow for that been China a which sales are have higher materially et like the think continue continue country the than that share strategy, point, of that such I it to mind future cetera? then like rebound one the And Changan could you is in in just helpful. it localization That’s relationship products, attribute market your beginning or is And Thanks. primarily to was

supported commercial working is sales but us, tell the a XX% at the was you I’m Well, of which focus it plan kind was this increase that JMC, second XX helped that is in the gain way of points, was We COVID share. to share in gained vehicles consecutive were about And excited we the breakthrough there. looking quarter by of of strength for. basis -- were whether -- which a second it’s the XX that you’re it hinting basis about. talking points

is Farley going of My on. a that we of of kind but was Corsair just COVID, product that in travel sale review Lincoln Jim around of the I now done breaks to first because there sales the only increase regret can’t -- that comes really Anning the whole market. you’re Board records be product Lincoln that. there and is of month the now President It It following noting our Aviator like for getting October had the in a and arms new in middle this. XX% is produced in think, the had all one the for the that our locally job it and Chen, good to and we’ve is progress contributed

you. Thank

Okay.

of comes Your the line Citi. with Itay last Michaeli from question

evening, everyone. Great. Thank you. Good

questions couple a So Tim. maybe just flow for cash of

might I timing year, the year, and then deferrals that the I recovered of year-to-date, the half you you meaning you expect the if you be that a down kind has second in be billion. we curious guidance, been that as of to recover from will the share to CapEx of recoup higher some the able year? this next with differences than use from CapEx be to of secondly almost normal, And much working think of capital think can am about $X how roughly original

me Let the Thanks for first. with start question. the last part

process planning our year next completed haven’t yet. for We

make but which to we’re activities, includes that only we’re sure costs, said time capital. now that focused for on some effectively also not We and have allocating that fitness efficiently CapEx

of we’ll So continue and year. that, reflected CapEx in this that some to focus you’re results on the on seeing

this million XXXX. the pleased stage again, down on also flow product at million nothing share of programs, you that fitness, $X to making So with $X.X year-over-year, but to and we’re ebb progress seen further we’re the but

than out, in working of but mind talked backup, the repaid and fourth quarter resumed, who this As quarter no had are third second with we goes, payables cash EBIT the the particularly about quarter payables lower cash the far as payables F-XXX, bear flow resumes in than capital launches and we shutdown we and the capital be happening better production production in as restoration seasonally played the of the that cash third the continuing start shutdown the one be to that getting would working period, during that’s dynamics quarter was course, of reasons EBIT. said will

environment, all only So results the I COVID play underlying to that, our guess into from the of this but even and improving light as with as and position fitness not strong back very -- in out in ‘XX, the But in a we’re a earlier, redesign we’re position opportunities. our have is liquidity seeing cash of half look and and our focused as comfortable that’ll then for continue cash where keenly what year ahead. benefits very we’re we outlook about underlying you’re on now we’ve and costs all and position, we talked

very bit seeing a I’m just promise four just Great. that campaign the could more if traction what I are ago. in, if I And you fair a initially That’s there? on you’re about helpful. one of you sneak curious am seeing curious, launched month

Jim?

Yeah.

The we we’re products for I volume think, the the that in really our new our highest seen and also a is Retail, way one second in in had the brand. mixed, the went and out employment share Promise things that performance OEMs in was of is promoted behind encouraging that great it’s quarter us campaign of great point, and was that leadership U.S. as strengthening of all the full to and, plus do and said, well. the of Jim reality Jim we’ve team, really, as the to U.S. up a seems terms said, part We the of brand. U.S. really see moment but

lot quarter be to not good looks sales to still momentum, We’ll dramatically do. different. continue to have Third

supply and We XX-day the situation have in range. good Ford

and the have to doing product so seems really to getting we brands campaign be stronger, And well, sell.

Great. you. That’s all very helpful. Thank

XXXX This conference you the participating. quarter concludes Thank Second for call. earnings Company Ford Motor

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