Ford Motor (F) 27 Apr 222022 Q1 Earnings call transcript

Good day ladies and gentlemen. My name is Andrea and I will be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company First Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' prepared remarks, there will be a question-and-answer session. this being note Please Instructions] event recorded. is [Operator like the Executive call this of time to turn would I Tyson, At over to Lynn Relations. Investor Director Antipas Please, go ahead.

Systems XXXX to Farley, Marion Jim President Officer, Harris, Q&A Credit; Thai-Tang, Officer. are Chief and Lawler, Ford Digital earnings Company's Andrea. Hau Also today John our Ford and CEO comparable Industrial Chief EV you, include in discussions our and Platform reconciled measures With me appendix the most of These Welcome Model Field, Doug Ford first Thank some Chief is quarter our Officer; earnings the CEO; joining call. US references. are for Motor Today's Financial us GAAP deck. of e. and non-GAAP to

differ rest results the earnings significant The from Today's discussions most You deck our other content With call about the to statements may could and comparisons XX. and Unless EPS EBIT, are on are turn I'll factors volume Actual forward-looking cash that page with along our Jim. all at flow of Company year-over-year. important is weighted. find expectations. mix differ also shareholder.ford.com. an free adjusted are product on over cause and otherwise basis actual materials stated. to that, the noted, included can results those include

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and in engineering, key areas, driving our Second, software autonomous EV we're talent getting gap after technology.

recruiting very continually and start a aggressive will very have talent. be already good We we on

leaner roll a experience partners globe, discussions our with that into this that as customer we completely believe direct required but standards are North we're model. standards especially dealer we superior now plan is deep year. but around to brand this We're a competitive, on not in for better launch out will America Third, customers the to be drifting new to different and our solely that speak only and

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quality. and good is on initial launches. made Another focus quality We progress

more However, satisfaction to we We address be to by process recalls must continue change. our aggressively our customer This robustness. to do has engineering and hampered actions. and improve

some committed our That flows their places fundamental our continue CV is They're business, in on Ford accelerating growth new impact value through making can uptime line. We chain our profile, and you change a Supply and generate to our unlocking and our like improving our now entire especially in sustainable subscriptions launching growth financing. products supply, secure lives scaling progress businesses key improve by batteries. we're our and see to and with Most and Lighting. said, management to from said, constraints healthy business our improving see We're in growth using semis businesses. value ability on their in automotive-related visibility chain profitability That as to both profit our making and major absolutely supply data. chain more focus better. cash is of including our for mechanic repairs, They're charging track. telematics bottom pillars. customers' importantly, Now, parts Pro sales, and we're

include we XXXX by in targets the our X XX-plus EVs of million sales. for EVs will years by account more end of that producing CAGR. new XXXX. expect global short than about about XX% That's four Our And

We our have reset profit ambition. also

now are by XXXX. XX% We EBIT targeting margins company-adjusted

terms products The beyond the of first in would really supply our constraint clear and mixed. our the is strong, new quarter, our I demand appeal extremely as describe Now industry. performance of customers of is

our even are still to this the they working However, constraints, posting incredibly persistent take quarter. remain that F-XXX lineup. issues targets hot exist And our new We're like take Lightning, confidence to your full iconic along break year-after-year to this quarter-after-quarter, the but prevent to quarter delivering John our advantage way. committed well. from the ICE vehicles we earning Both through I'd whenever year. We product grappling like supply chain now, to it EVs with outlook and us you to stronger as of turn

Jim. unremitting of higher as generated our lower other top industry-wide first disciplined offset resulting was driven pricing prices in decline in incentive spend. creation. disruption, portfolio, $X.X opportunities execute and profits chain ongoing total net in new and Ford+ volume higher a and adjusted fundamental strengthening we by year-over-year EBIT, pricing, hurdles, our our with by line take against you, face of commodity to margin company continued electrification, X.X%. mix, product supply we Thank the quarter, while The billion we and In pandemic in growth partially to value and exciting investing In plan, including and remaining

down Importantly, supply of operations issues. our with were and chain were reflecting America Global continued profitable. our outside North wholesales X%, guidance consistent the

extremely improved significantly North rate America run in ended vehicle order healthy we and March, during with production an of our quarter bank. However, of month the the

the is deliver In alone, primed in fact, billion order our revenue. US bank in about to $XX

$XXX wheels which includes completed, supply was and $X.X with which strong ended million the residuals, loss shortage. delivered the negative capital performance. cash quarter due installation Free and This credit by billion liquidity flow about Credit levels, billion was working by at quarter. timing at awaiting semiconductor on and Ford more the differences, million, components the strong cash EBT deterioration respectively. $XX another end quarter. XX,XXX to our of We stake nearly valued $XXX explained higher $XX strong of vehicles billion included than inventory and lease in unfavorable Rivian, but reflecting affected was the

sheet continue our in investing priorities. Our Ford+ a strong to provides solid foundation balance

on a margin unit with let of performance briefly of the business for touch Now quarter. $X.X X.X%. EBIT billion me North delivered America

primarily Now costs, commodity reflects this to improvements down impact year-over-year is constraints higher supply warranty were utilities. in and lower higher pricing mix large net offset unique as pickups volume full-size more mix and by unfavorable volume. The expense, than

quarterly volumes. improve. X% to In vehicles. Europe, years. of scaling our benefit its X% delivering business trucks an South from The underlying on redesign margin and The especially, profitable global for margin America continues a consecutive EBIT operations its quarter its commercial in third continues focus EBIT highest despite over of XX in efforts pickup business region our and growth, continues to our delivered trajectory decline to

supply is However, of impact the the disruption dampening our overall chain adverse results. near-term

the commercial in E-Transit number helping we vehicle recently sold the has electric continue we is an continues and improve bottom-line. and a vehicle The commercial Europe And brand end order our we uptime to China, quarter. Europe. be reach most future Importantly, all-electric momentum healthy is loss grow fully posted finally in In to online XXXX. their Mustang expecting bank customers the towards the being transit extremely in by FORDLive a to vehicles now Mach-E markets. moderate one building in major launched of ultimately Turkey. XXX,XXX

year-over-year start. continues Market year-over-year more a our China improved region. In in and to electrification our direct-to-consumer towards all-new total on Zephyr quarter performance made other off We investments continued also cost our is the However, strategy. progress network. both spot opened improved Lincoln XX centers experience bright and basis. to fast to a XX for to sequential first basis be modernize profit points XX make customer now the the pillar and share and a

And solidly Our the we we make upcoming now investments Russia. remains of and remainder the autonomous a with of Ranger Everest. unveiled both Raptor performed our the the first first TransLoc Spin Ranger development. continue towards be rationalizing commercialization with suspension well International quarter in progress Group in our operations people scale steady venture and you in in continuing on profitable the Mobility, we to of to XXXX. supply divested about focus despite current constraints next-generation of And track. joint thinking finally share next-generation And The and goods. I'll moving quarter, launch on in our our moving further portfolio Markets and March, In

the guidance year For unchanged. is full our

the earn billion free between billion. This $X.X constraints cash year-over-year XX% and full-size $XX.X availability flow XX% of adversely will to to wholesales in reflects which North billion in adjusted with $X.X XX% $XX.X growth XXXX in in We from billion impacted up second assumes including our expect that EBIT to is adjusted utilities in and semiconductor large America that to half and improve the pickups QX. XX% of

in guidance local chains. supply China health assumed and also the concerns manufacturing supply chain COVID-related deteriorate do not operations that the disruptions in further renewed We resulting our our lockdowns in from and vehicle

to significantly a adjusted America our and in profitability America. North relative profits On Now EBIT. of North assumes higher basis, year-over-year outside range collective

Ford volume well; mobility mentioned Bronco Mach-E, along as robust expect EBIT and as XXXX strong be such EBT include; first, Other Bronco, E-Transit, our into also a Credit our We for products F-XXX to strong, roughly order other and as Mustang a in iconic have than with lower we Jim second, to bank very Lightning assumptions flat. lineup Maverick production now factored EV pent-up be Sport, new which corporate guidance but bank, broad improvements improved a demand will and we continue quarter beyond pricing to remain about Fourth, including $X pricing to strong dynamic. and mix. range taken The pricing costs. benefit a third, by in the the inflationary in commodity our interplay net headwinds expect order actions between environment of anticipate offset and of role first pricing continued we And billion, other mix. we pressures expect of impacting

auction expect up strong this reductions. to ramping our at on to are Credit, as fifth, aggressively all looking opportunities including offset additional aggressively reality We cost values Ford efforts persist. remain supply constraints And we at

mentioned lower primarily release, but I strong fewer return as anticipate reflecting we vehicles non-recurrence losses. off-lease and of However, the credit more reserve EBT normalized

on outlook aggressively to we relationships balance-of-year creation. drive our includes our This quarter, demonstrate to targets the always invest customer devoting value as power in results resources technology, of connectivity, our plan facing and to medium-term the commitment to customers, growth continue Ford+ and and Our with our electrification.

long-term confident will payback these investments from We are be the substantial.

your wraps mind. and that use prepared So We'll on the our hear of the up time remarks. balance what's your address to questions

questions. for open And Operator, thank the so please you. line

begin Please now first ahead. session. from question Instructions] Rod question-and-answer the of go We’ll Research. will [Operator come Lache And Wolfe our

my question. Thanks for everybody. taking Hi

First, I messaging. that cost bit drag pretty to for a hoping is, decision-making, stick inflation might you Price about here I how versus would while. the to a be around your achieved about inflation. your still obviously, of was volume starts ask influencing past I expect in talk wanted assume big you What interplay you internal you've does over and is view between the a little Is that's margin as volume inventory there after everything couple and normalize? targets? power to to price this affect your your going years? And and pricing

side copper, nickel. Rod, the thank on Hi, your question. for steel, aluminum, commodity Obviously you we're seeing lithium,

We're inflation On seeing pressures suppliers. premium on the logistics of side from a freight. lot

recently have the It's in addition, in bit know we we've but have opportunity. question, I really quite John? pricing lot the like that's of a we it's in as board. well feel the And would So we across really a answer let John that's pricing but say, an question, upside put of market. your cost company. not stuck. I the I'll

Yeah.

about have So, so seen inflationary pricing just we've a far hi, Rod. pressures offset pricing that From seen. the standpoint, we

expect top aggressive so, do incentives. the through We've as the with with balanced said, been line. continue been year. And the commodity Jim we've to inflation, We

that. that So taken we've reflects pricing the

we And is the and influx. that, MSRP I many industry. you of and have would a go so Rod that, pressure aggressive transacting starting so above assumed your also pricing half see second the of dealers remain we standpoint. And say volumes the we've our the and near volumes right across would in through dynamic the incentives in on say guidance. the I pricing improve, assumed the as this been that or also increased to last that year are rest that's far from now, between going say year would I would

front. by to work So watching done that first taken happen has pricing pricing We've we And our the improve that to be very on dealers. can a compression also that's closely. where going actions our we've we're with

So one past to days is cost. about In with the plan to MSRP paid we've of quarter the the the we X.X% our plan had we things did the dealers. cover carrying floor we adjustment the the actual XX adjusted adjust them cost. in And floor to of that

cost So the XX of actually day.

through been pricing a So that's our flowing benefit that’s as well.

will incentives as do it incentives. second that think to So, as the volumes see commodity that dynamic adjust relative be We're we agree We've be about half see If for but it going commodities the relative not volume is can. up, -- be to if as on we keep appropriate aggressive pricing. dynamic. we in, increase, that. We pollyannish we in reflected what aggressive we'll coming to also we'll

to pricing though increase offset model considerably rest XXXX to at They pricing. going we're as we that I to that today rate say since have year. play it's model to a to through XX% offset -- of to go think when like XX% I move what low-single-digits. think run basis, -- we've relative On look XXXX into step I the have taken move incentives would a up have they'd and XX%, -- back from single-digits So be in dynamic pricing. we'd that to the we year, -- we the year

inventory. had with back We're back extremely and we to very that. a at disciplined and that's to process our had and not So high a going be -- time inventories going to we when very we're push-through go

So...

of Percent revenue.

revenue. as of a Yeah, percent

angles. so, We're working the costs. we're And all working

the of Europe macro Thanks pretty looks, posting for rest just given been the all there? outlook pressures there you've year for It the for solid color this recently. And any that. results of on

Yeah.

We supply us. see We those the better were to post But, chain results expect reductions. were it Europe to Europe we though by hit quarter for continue. even expected in hampered a that, nice by did than that was

in has commercial well to Mustang very well very received. We E-Transit, received been well. continuing the well as we're has launched So, do Mach-E been vehicles. which

second So, the improve and supply in business as them to improves as we for well. Europe flow the do rate expect in half to continue the of

Thank you.

John The of Merrill comes Lynch. question of ahead. from Murphy Bank America next go Please

I I'm to everybody. side of buyers incremental similar is base I over variable of before. very would of just mean sort the this truck to little to you folks be the the do to you a Jim. relative of wanted you'll around? mostly ask with same verbose is surge incremental three the sort being that powerful F-XXX they're to Ford in expect buyers orders of a curious you that something launch Lightning do XXX years? or think F-XXX? earnings. the this if the kind sort here evening, I two that's potentially to at of of which think And growth even bit think XX% the I sort have more Good obviously sort your question profitability XX% the just stick truck because or a orders of a like XXX just it margin been on will that launch haven't you thing mean F-XXX the time F-XXX or expect sounds

you Well, very were to do the the the by and and we is your But at that dramatically in early in of that trucks. facility for don't would – Doug about you in point side. are we what lots the question. very clear like some to but of units. it's sell I much And It's say And that end normally as different like about younger. the We profit have capacitized we far here Lightning maybe they're We Texas. that said customers on We'll it's full-size higher us about so the end I'd we And to that education that days. in incremental. know this I levers talk It's the profile announced thank the truck. New the day a double ask states California come interested we didn't is of in in XX,XXX customer is year. almost orders next see. have York

clearly incremental. far So it's very I think so

year do into open Lightning F-XXX when on maybe the that – order opportunities this volume generically that may highlight bank units see we the summer. our product? model we'll the change. Doug, get but for with Now next more see XXX,XXX order to we next as again order And you the you on want production

and team Every that unit consumption the cases even optimization tracked materials can changes new thousands That's chemistries. excited EV start To have of really seeing in watt of is in drive specifically, religion we're stepping are thing on those take range. now materials we're but largest of efficiency how optimized. single the the over future we These we really off programs battery battery a and cost terms aerodynamics the I'm of is course improvement products. some drooling with I'm Sure. the up materials in is miles talk first of really use Ford about about Energy the build in what when we is chemistry But to and over do building and being single dozens obsessing bases dollars strength. And the control opportunity we and in there to hundreds out. of of and this. really of next is the that

true vehicles. advantage that our EV half use that today to of number build have to after main internal to different really a how in combustion take we change F-Series – a of really the build EVs. factory next line we They're the and stations Lightning. you approach could think I the on going ground-up Finally And going we're than

that have So this ground some to I'm very journey optimistic up with really good make we margin. on

John...

just ask one I can Actually follow...

Go ahead John. Go ahead.

No. Keep Jim. going

Sorry I had a on... follow-up

most And this point as ideal the I customer of we solution that's usage, company a is customers. at for look those the just Super going quarter at of to say on obviously don't when electric globally. want to Duty be that a we feel just an profitability

light of Heavy Super different sure, That's Duty They vehicles not that XXXs for and duty XXXs a our lot doesn't ball will end of require make lower focused [indiscernible]. So batteries sense. the be on a whole of really but XXXs. wax.

accounted this sorry, we'll that the has and from I'm Is that inventory seeing balance And XX% all it. to in presumably, for the the fourth flush those the the here quarter to a sheet in wheels. system the units increase are what on on vehicles chips cost they John see XX,XXX just vehicles on first in understand quarter? follow-up out this when at the Got been inventory are And available. may become we're what in of third be Could be for just second boost the the second and quarter benefit or might you're quarter accounting trying of and actually finished? Lawler, or these out. explain you I'm from third economics the flowing and what fourth to the profitability in sort how when kind not

Yes.

that's most hitting increases That's exactly the units. right. for at cash is what's John, us vehicles XX,XXX on wheels So the standpoint. the And a part from inventory

cost have start revenue have quarter, F-Series the in this vehicles for we're we our And in profitable as results, no them. and we line. a primarily for get to build then out that and Explorer. And to for third quarter primarily them into and it's but results we'll more complete bottom the are they We and those

why there's an of the So, -- fully because those to we will those once we that roll subscribed. And line the out. John, we're through one without can shipping we to reason very make, the do start But need opportunity why the definitely production confident, that our compromising bottom quality. start there reasons is we modifications built

if aside are units the built we chips these them would and available. hadn't until them set we So have lost

the of in is of might this obviously the the in earnings year. understanding sounds because, it like not? trying first to cadence I'm understand sort the of sorry but course the revenue of John, are a the people's impact costs I'm it results, through have just recognized big quarter

been we backed But the cetera recognized backed profits The et right? all inventory. an aren't quarter, like for costs, No. That's out that's out. the labor in

it. Okay. Got

Okay. Thank you, much. very

of comes go Please The from Langan Wells next Fargo. question Colin ahead.

Great. question. Thanks for taking my

have do maybe the increased. maybe it different out to really at you the or Lightning Has of very those more chemistries, at How raise and levels you're Do materials all? going dramatically you all high you battery stay materials? need if strategy costs As your the changed pricing that Mach-E? think, mentioned, to EV the EV about switch you for can battery to -- hybrid? address can these it what And that raw

Thank you for all, demand your EVs Ford. extremely at of question. Well, for robust first is the now right

We're have chemistry. we opportunity into I want said So, pricing. going details which we important, to the get battery for Colin, But those emphasize, believe not now. very to We something is Doug very believe price commodity frankly, the anything? customer. Doug, do chemistry against of The add our key increases, part to really benefits you and have at want we to strongly Ford. protection the

No.

give the takes the market. know Lithium-ion experts less be we number from Ford, industry away an to the seems on focusing the of nickel. chemistry. our on materials over that part a will years something a That everyone us in chemistries of battery, Ion that opportunity of which is team fighting of course, ago really also looking to we're phosphate, Park, be be you from and is that started specific dependent a dependence on

we… short-term, the in So

tells two please? which you Can us

Go ahead question. with your

Sorry, Colin.

wondering XXXX? now? mean, kind you mean, $X quickly just you just switch how was you're plan. is able can mentioned to spiked target nickel of the I'm I how because flexible to adapt going or do say I by million that's that could to I you and quick how Yes. LFP in

leave that engineering first of something We've working opportunity LFP Yes. that and our big quickly. that. see time, products a we at let's What solutions some on move by LFP in mean quite been for is, it is generation just I so to

going does that mentioned up Got It be see issue warranty question, your warranty blip it. structural a driver that of rest about or the you sort just to And a and we're just that of Is the look like some costs big year-over-year. was was is of to the elevated a in going comments it in second margins. higher Hello. year? there quarter, through temporary

had In the signaled we by Colin, the targeting delivered $X billion to When billion event, we our we XXXX, Day that Yes. for opportunity of were $X.X Markets question. we thanks $X mid-decade. Capital of warranty that. billion

XX% that opportunity. total you we this of a look of When roughly year, had deterioration. QX So, at

team, just non-repeat huge the that of drag business, on was for in opportunity my a is one not us. as on the of because as performance a items a us as the of is we recognized on more because skill really flow priority still that focusing well didn't improving quality our as customers. but recall XXXX only -- This the through. for warranty importantly, Some for team It's of that impact number

the company offset those huge us to eliminate So this within discussed opportunity Jim and something focused is a it's of headwind that earlier. some really that we're on. as waste costs commodity And and we earlier, and others highlighted for

Thanks taking Got it. for my question.

The from Morgan Jonas Adam next comes Stanley. of ahead. Please question go

call? Lisa Is on everybody. Drake the Hey,

is But here. Doug No. No.

I'll Okay. pass it her. to on

the on people call. great got We're We've good.

lot call really, and really noted a First, Solutions the good of a great things. partnership Lilac that's I here really

there. great So had we job

If now and right and entire could to really that they metal What industry mining imagine you the this right were would call should listening now, your Jim? be. message

be would and work work work know that message list? lithium we the them want reasons. of number find to America. two. processing you together And move That's The looking to we're Doug, be two want and on smart in of the those And focused move good the variety to overseas deals North that We're need willing from some we're do would America to message We nickel North us. for for for what we processing to and would what deals. precursor invest edit we a to that capital for.

No.

I think right that's list. the

my follow-up Credit And side. list. Ford just The right

market in some You a guys we're economic time. in pretty changes extraordinarily oil well-managed over crazy at that seeing the least react can are to massive market. And and historically course portfolio of shocks pressures

loan delinquencies, for in basically sign terms for in and losses the credibly can an very strength Thanks. on pressure of as you any economic powerfully the indicator Just audience? that the comment consumer record, of portfolio in so the this

of in that's time. Harris Hi, up used to anything Marion seeing Adam of into of strength values car well this. We're The And last is, expect back we a They're lot year it's price remain we've delinquencies. getting strong the piece And period you're strong gas no. which short below some seen. here. on answer but for marginally the even of still versus

we've a we're auction things in been SUVs the not prices for any is price change sedans. of differences values One smaller seeing there by at in looking or movements large not segment. is versus whether or And

the continue Credit we about feel and very So trends business. good still the

Marion. Thanks,

next Suisse. Please Dan comes Levy ahead. Credit from The question go of

taking evening. you Good the Thank question. Hi. for

question just the is on First guidance.

you're the choppier to guide. Europe aren't mat. also higher mat guide raw we is $X is but And of So in billion billion know that other that raw you've you're environment. $XX.X a guiding billion, to a choppier said China there pressures inflationary environment. now maintaining is $X.X of also then

to So full understand the is that. offset what set of just want I to

headwinds. you but to cost maybe to that price you talk just allow offsets maybe despite maintain about could will your guide other those talked incremental You've compares how that

Dan, Yes. thanks.

there the full price offset offsetting So for pricing is inflationary year seeing. we're pressures the that main the

this up ease anytime pressure going cost is ramping -- in aggressive to because efforts believe very going due being are inflationary that we know to on soon. don't that to cost the not We pressures additional we is

productivity. We working It's team Jim the So a to very more are hard we that. need and improve efficiencies. on us. and priority for And we find to need

see as do on someway of better that is So half we system. have we have the in volumes that the availability the based of other thing we improving through second the the year

another half over year. we'll that comes us in see that's for first And second as online. big in that the driver So the the half

So to you Hau, want to how seeing doing little do you're talk and been that? what manage about we've a that bit

Yeah. John. Thanks

ahead the year over you guys the design in constraints, some wafer pull of chain some in value quarters. of the his And frankly well we're expediting So work, of a the year coming last on back ensure the the with our and out our rate as that we've supply. started suppliers John hard year. many the are of we way every all of implementing taken break parallel, level available March, seen that, of chip of lot run had to of reflect and highest constraints the on coming online. our to freight production of of the design that actions, as getting these That's in mentioned actions last as in we've suppliers if our past allocation, In also are remarks to capacity end at couple fair result those

So increased what's the us John that's the around that guidance confidence giving highlighted.

for thing that other new encouraging and We as would I that's is them is we see said the add - And just assumption And Q strong products demand Levy and very that, us. this? continuing. our for build demand, the within of Jim the earlier enough Dan can't mix

the I in We me is assumption were disproportionately mix than than to it module – Hau that. we'll rate hit that. about to his normal – expect He's about by more The the commodity has can a through better a than would I back worked that talk to and we revert talk can. that, first quarter And team run see. mix

have that resolved. we we So believe

a normal mix see should forward. as we So move run of we our rate more

I want is because – Hau, it really comment do specific that material. you think to comment I on commodity, because

Yeah.

most and that had mentioned in our module So deployed on was utilities John a profitable wiper large pickup as North lines we America. vehicle trucks our

lower-profit with and a but flex, year address limited production, wheels also of management that our to That the to vehicle had commodity. line back the resolved. of support of we issue of And again, we lines. half with sight it. ability have some out designed only not We've on So been any vehicle mix way has do other

Great. just in re-org And I really then going past discussed that think in that is my costs fund online, be second coming question think about the are that Blue we E. as what to Model is your the you've

that assume profits you incremental more I delay. a other combustion of But very market, core can looking maybe EV, you're at more into how are what investments. funding to your growth. see the that sense how market now or environment are from going you to you the give system can you're are give about EV business maybe to you are do that is, a pull a back the your in need – have we good sense underlying So other growth us coming on costs us can that of but discretionary it's growth maybe regardless think in invest if you there investments investments? that How easy growth

how in is at around Blue really it. look we cost That's our our business. Our opportunity

these invest Level of need to need that system our a We in architecture. we networked electric -- invest X Level we we believe advanced software in all need investing, in in terms new that. portfolio very we supports need advance need OS to changing X We Level to – invest strongly digital to to our need and in need In X we And products. industrial We fully of a electric and autonomy. invest over autonomy. to invest to

that productivity we the new to course, of I as can time, so discretionary in makes business. base really to our that to you. Ford+ And where and for it's where improve work I in need this do real need efficiently investments we these point specific a that team get That's don't sense as to our of as we invest. this plan implied all That we're management hope focused. point is any inefficiencies is and these growth. about this at -- time, after So make -- personally technology to see at our

Thanks. That’s helpful.

comes of question Delaney Goldman go Please Mark from next Sachs. The ahead.

taking And good the very thank question. much Yes. and for you afternoon

specifically what And been. is And data engineering any about e. or new how Model your announced the now Ford hoping reception there understand better you has I'm get maybe Field split you Ford the talent. segments employee into about are Doug is talk different first the can points since can anecdotes for two perhaps share? Blue structure on Jim, meant months and ability to for the right to including The

been to it on the know needed -- necessary we We reception hard terrific. this and knew and makes We why communicate employees we worked why has of is kind I to think sense. this and we what were prepared.

has my good. to in -- be comments proof executes. And we've how been this is I why to the an and done going changed. we're the The that's since has So, on X give lot March a to I wanted pudding you. reception in update actually what think over Doug

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Ford Blue. So, Model themselves. the great build back doesn't organization We an on software Ford Difficulty] and rely can't to [Technical is set and e contribute systems Ford up, Difficulty] [Technical where Model by that e cars does platform industrial

helps So, that interdependency I really there's work, think. an team the

far I've been really and we of by talent, kind talent can delighted that attracting As as attract from surprised the tech.

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the suppliers even And more to And My to maintained XX% unfortunately by That's is really war sorts you hadn't the also to XX% was being XX% things we've the Ford's taking how understand more company that to different is company helpful. to or growth actions managing about outlook second recent better to on impacted those to XX% growth? China. been suppliers though events? up new which the extent is to perhaps do? still has overly you. volume to do have in still the COVID it doing XX% expecting to and restrictions Ford had find hoping perhaps you're these not pop growth, XX% wholesale I'm that for that is question incremental of it Thank what

been have commodities obviously, those. you. semiconductor-related work money freight We, other -- spending It relates production Thank on China. commodities premium comes to really to that us. to in and half increase the But second really the lot of hamstringing the COVID escalations a down are around year's things of

anything So add Hau don't you know I if specifically. want to

to job done of our mostly because of hotspots were two you any parts the sourcing areas I the from so think Mark managing other of get and that Ukraine, that highlighted production risk Yeah. and Russia large we've patterns really minimizing good a able world. global we significant

In the we're scaling of China, terms Shanghai area.

Tier have XX suppliers there. X We about

capacity just a our freight. fast on mentioned Our as is to Jim allow suppliers. expedited resume profit white and to then And suppliers maritime really protect focus list our as shipment production. leveraging to vehicles, have We've they're as secured starting pillar to well airlift process

to the those suppliers teams partially in get our with ground operational. working we're help on China So

gating So will us to of going nested within think what's that. mentioned is those really us. we constraints And semiconductors. Jim be actions are as these help A lot

on supply. down the to semiconductor the it that we're doing comes So work

ahead. JPMorgan. go comes The next from question of Please Ryan Brinkman

Hi. Thanks for question. my taking

don't prioritize thinking opportunities? these it, you about you to there? all your near necessary thinking expiry maybe potential your available resources how the so you devoting or investment were are Rivian thinking the in -- you recent all in how maybe the you you maybe of I forward? other actions. this friendly know maybe would shareholder going if of Could lockup we And more As are the stake investment the already of on the you Are I to Rivian, options to are look retain to XXX-day are in options? think any inclined shares? given efforts, use proceeds? decline accelerate And use electrification terms own monetize How perhaps about you about some to them or

Yeah. on Rivian. Unfortunately not at this to going comment point, we're

great. Okay,

AI's saying on on of their various of been terms about supportive try provide one of there earlier of in robo results strategy Let potential you in the and or Miami? the trajectory of overall of what you're early your maybe your any just network thinking is update trials then. that Lyft Argo me you some cities the recall what can taxis process, I on there Argo call tapping of Argo with that or has in beyond be Is terms may where latest public equity. an

help to Argo, you. Level others the progress we X really We're very of Ryan Level autonomy. two, technically us maybe X, a Level at our for big see be time. taking products. SDS two as them, all. this feel continue like capability, first them it's three we is X great and with progress. And want make different technical Number semi-autonomous which not for And stuff. distracted distraction do than Yes, expensive Thank all could Level number with X the Well, on Argo would and distinct happy but we that

aligned shift focused standpoint flexibility access the many partners on to would our would say with to give this to so cases continue And capital that is Argo, critical to I fund would aligned a be our for It's the business vehicle they're come. with from very us be thing markets is getting we're that And use years very maybe One to strategically goods very and as material movement. of Argo's getting interested in a feel company we're specifically. the on getting a customers more more in commercial and more and strategic our interested more middle bit technology. deployment of mile

a that's for hopefully that update think material you. helps and Argo I

you. Thank helpful. very Yes,

question Please go RBC comes ahead. Capital Joseph from next The of Spak Markets.

is much. was cash questions -- billion $X on Free still CapEx $X A $X I the couple of same. cash. EBIT to the I it noticed was so Thanks now billion billion. flow same. think

lower cash lower the now. versus like spend prior. to given delta looks the it year now cash, And total is on $X maintain flow on is And free this I expect while that the think capital? So, cash then you we're is billion working redesign amount to

you just can what's going So, on talk about there?

Sure.

the of we've that markets the work across through efficiencies there's redesign, redesign as the each we're On that restructured. seeing we

cash that and announced the facility differences see the some And get we to working say And bit so as is AutoZone we're solution position also into There's with. taking or there to redesign. to let's a we fact that you're longer have [indiscernible] where counterparties as that our allow also we final going to there a that's some with global timing we're of a selling to work starting show for well that to the doing restructuring up. bring in will be well

it So, that of from short that's the standpoint.

The it remind was? point the I other think was me what -- around question

The lower prior. CapEx versus

Right. Yes.

So, the lower CapEx--

CapEx Lower versus prior--

Yes.

no investment saw So, the year at architecture lower differences CapEx relative fully networked electrification in or beginning in we intended this in reflects year. our cetera. our change timing what that to of just et It's the the

can you invest. to continually us So, still expect

balance capital to sheet's We strong. The that. do the have

the doesn't anything business heading. for differences it timing just So, It's most reflect where on we part. see the

Got it. is a more cash the same drag follow-up little then? flow the And free then a remains capital just the bit of working

Absolutely. of working it's capital. Yes, Yes. more

if is of made you then little cost higher covering primary it that some lower, think a will, just some the Ford some And makeup, sort was to about coming parse you coming lower. pricing. the Credit but some here strong now Ford the -- said of think commentary And bit? Can $X.X its advantageous from before be from there's billion you -- of also of Okay. it some of so also of Because I driver Credit? quite you that more clear that going I

Marion. its Joe, Yes.

that's than but -- in strong I'll -- reflected we cover guidance profits would on just XXXX. large We larger lower. in said that that we reserve expect piece Let the releases be the fact the XXXX in me had Ford will Credit. And

XXXX releases related had In than to portfolio. addition more lease depreciation to a lot the that, XXXX in we would in we supplemental

communicated months year? or expectations changed ago this what your you there, Did versus three

No, No. no.

you. Thank Okay.

comes next ahead. go Bank. The Deutsche question from Please, Rosner Emmanuel of

Thank much. very you

a and adjusted puts EBIT So you John, quarter of towards last walk the the some helpful provided largest very with XXXX takes.

you hoping buckets was some And so, here. could I the of maybe update

$X So, obviously, expected commodities billion to to drag. billion be was $X.X

that? drag. changed. changes to hasn't can billion. $X Credit And last be to factors? going the billion you versus the billion that question last factors the $X understand is market market quantify it's What just besides $X.X this from I balance seem now from was time? Ford Now Any other

Yes.

what think exactly Ford There's you is that. Credit. to I So no change see there

seeing pressures. We are inflationary higher

but seeing well. higher that's pricing cost on also coming are we're through, as offsets We working top line

I So and pressures remains largely higher it inflationary last We're think through. talked pricing just seeing time. flow had what we higher about

Okay.

$X.X the offset? to $X.X we which in offset last billion the volume cost price time, the add $X.X that, billion from pricing mix versus So benefit could -- billion billion basically to to the $X was

$X.X as it's it's don't that. I high -- not as there's high as No. growth Emmanuel. think as It's in but billion, there, that

being at what cost by last inflationary look it's you flowing when combination the we're large of mix seeing walk most that's that time, pricing to as provided pressures what we a had relative think just indicated. but that you through, had the are of offset reductions, that as and I as not additional

Okay.

largely cost piece is the you it, back prioritizing of dialing the modernization the for -- some that or like investments, is of are left On of sort as year? or this

to No. that not. I say mean, absolutely our -- it -- make try twice. I I'll

about really in excited are We growth opportunity our EVs.

Doug our as that invest in building said, shop of like really as invest We OS, for things partial service of simplify always for we in. cost process our It's Pro. manufacturing, autonomy lineup. for And on. investments manufacturing to obviously our to lots our holding invest to out We're have full to portfolio essential not plan. move have we have architectures Ford+ The back any redesign autonomy to drivers see electric We That's on Ford obviously of part our all in, that. are we completely EV. in, ICE

in we We warranty opportunity and sales -- and and as sales lineup engineering, of course marketing simplify other and have opportunities in our areas.

need So we I what exactly think know we we're – do. to

Thank you. Understood.

of ahead. Please question Citi. go comes Itay Michaeli last from Our

Hi, great. Thanks. everybody. Good evening,

two me quick Just for thanks for in. ones squeezing and me

Ford we is Motor earnings this to you of be Credit the at did And you cadence housekeeping about anticipate revisit hoping more the back what up bias the talk end to whether full point low second dividends of the rest end there about you before kind guidance for high provide any in year think the or can towards but year terms the it EBIT whether adjusted your can the of how First, just range. of to question of parent? is and

as Yes. guidance. It's to and maintain to to the the guidance It's a where I sit all out to XX.X working as passing But mean far out within headwinds guidance. we're dynamic we the parse the XX.X not XX.X. XX.X. environment. We're of going offset

the heard the are case sheet. year and overall balance guidance where just And sheet given in on you this dividends and vehicle And in on we profits a of profits the the dividends are expect We into size then function constraints. growth much leverage. and the don't this balance

So don't number. have of – specific profits the a majority we

make on the really financial just it I'll clear automotive overall company's And performance. performance

half is very a very us. just critical for time It's critical second company. for The the

but the half We a critical haven't really a the to we while. for coming build of fresh lot have of great opportunity we in lot the volumes company. have costs for a products, And in is second business

That’s all very helpful.

Thank you Earnings XXXX Quarter Company participation. Motor This Conference your Call. concludes First the for Ford

now may You disconnect.