Ford Motor (F) 24 Jul 242024 Q2 Earnings call transcript

Good day, everyone. My name is Gary, and I will be your conference operator today. At this time, I would like to welcome you to the Ford Motor Company Second Quarter 2024 Earnings Conference Call.

[Operator Instructions]

Please note, this event is being recorded. turn of over Investor to Tyson, Lynn like Director Executive Relations. would the to call Antipas I

Thank you, Jim Credit. Gary. and Q&A Quarter CEO; XXXX is Welcome John Chief to Ford Call. and CEO joining me Motor Financial With Cathy Officer. today us Vice O’Callaghan, are Lawler, Farley, Also and Earnings President Chair Company's for Second Ford of

deck, appendix comparable non-GAAP you earnings Today's are most and materials measures These at the some find of along and content shareholder.ford.com. the references. the U.S. discussion of in deck the includes to reconciled GAAP other rest important our earnings can with our

discussion stated. basis. to included EPS on Our on actual those The expectations, most noted, our Page XX. significant an flow differ adjusted are Unless could statements comparisons EBIT, includes results company also otherwise are factors year-over-year about actual and from results may all cash differ that free forward-looking cause

to Now over I'll turn the call Jim.

us. Thanks, Lynn, and joining thanks for

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me to outlook. let now turn our So

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questions. the Thank use of wraps prepared our remarks. you. time that We So the balance for

[Operator Instructions]

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

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The is Research. Dossena next with Wolfe question from Bruno

every Or keep frequently warranty up, how given it's can surprise to Yes. issues surprise realize confidence prior an issues. happening? year you I I do trajectory visibility? is popping just fundamentally how it what, a leading the organization, issues you earnings how think because warranty industrial but was warrant could persistent contextualize build in wondering investors system, partly really was the if these keep on And within just when the have you

Thank you.

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data, time. had for some by Our internal verified. saying been the way, that quite now It's

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Yes.

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you. Thank Okay.

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EVs earnings Ford is just level Yes. on for that script to this going We're emphasize call, is a for would And partnering not company. I flip make announcements absolutely moment high. at record but ambition to the any our on

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have that, their EVs. have we de-risk have to many maintenance. are that And These even scale. Rivian in a the because transformation, also more Our and service exposure They both all downturn OTA, of BXC that platforms These services enablers complicated Ford of our our industry the team, than architectures. have too. of and we Tesla make and And BXB, to ways turn go the And of -- vehicles I is cycles. in believe are electric the OEMs. more to business, because more and kind to do other beyond basic IVI system, to customers through integrated that keep because more And advance longer. updated is we they going many others economic

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as and have on of get kind ago. X structural revenue, I industry to change thought the of year that next And the wouldn't in I going think EV that transition software. We're to is big change. years billion of we as think, $X

The question America. John Bank of Murphy next with from is

of quickly. then out a it think sort reasonably payback or units. sort peak it your we super-duty the than you billion that Just just to kind on if of certainly big I wanted on sort $X back like for margins levels less numbers of to Ontario incremental a that? years this a just the of the add. like take go How through to more take high to absorb kind we some the capacity curious, up that's cash and core of of have current X obviously, a Jim, the easily, sustain be spin soak of about hitting demand that on demand and view what's in Because these business. your might step-up lot of capacity a seems should XXX,XXX mean, might I'm in It ability would of seems sell-through. truck, Super or Duty real but investment think I

So [ ] a it investment. be could good really really,

kind talk if that just about also then wonder what you those I trucks have. could of and powertrains will So

you. Thank Yes.

diverse powertrain, So will multi-energy powertrain-wise, a platform. it be

-- will going done van. We I'm with we've get and can specifics, not imagine you but Transit into to what F-XXX

multi-energy of -- in We commercial a platform. to vehicles, have gone our all

multi-energy other -- no a competitor Duty. we'll Super believe we that will the think mover, customers we the be first mover have. offer And if will we not choice So we're in first

Look, now. going Jobs upgrade in we infrastructure in the is coming home. There's investment That $X.X saw trillion that's the a XG Act.

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all We in falling Ford XX is Duty an ambulance Super to average is you use age The They ambulance an -- I'll of apart. and years chassis U.S. tend the example. our dominate give business. U.S. are in now. the Ambulances

and can industry, this We to have capacity. not incremental with that been able service we now

our in we And many thought it's years part. we're story product. the of lead this take kind to now That's will demand doing ton And in payback. fleet, it the and so business, the we And unless industry this it a last was great an it tails for John? because of investment And upfitter still. on the aged going to be to come. we Ford many, the lead of the got chassis would be a multi-energy -- at wouldn't it's

market to down I just used or remain seems And stabilized residuals market. it quarters, Cathy and last on to if more at used for year-over-year, residuals the just improve. could curious sneak the is used X although -- relatively supply in the they've And the going started there. just in, seems one Okay. or like late-model auction. is what to I'm your like, outlook maybe It And the constrained

a a be not guy, resids pricing. might or a Credit, new good Motor this and potentially just for for So for vehicle lift but Ford support

Cathy? seeing So And what are your market, there? in are just you expectations what the

Yes.

to continue as X%. with we're to seeing in this X% auction return in quarter sequentially year-over-year, of values increase to expecting the about auction this but decline values and So year also up we're We're well line about half down that. our expecting rates second

The Levy next question from with is Barclays. Dan

start I Pro, pricing the a we're of question these lot a continued first strength. wanted going results where seeing with and is really, strong on to

So about pricing I all sustainability helping us help understand there's these and the really pent-up specifically, can a give color demand b, tale this the really you more on market that's how some to thirst subject for is retail, products. bits and spot would maybe But of demand; pent-up is of let's And long pricing. much how be contractual the of the a, fluctuations. this more call versus, which it,

color any it's run? the strong So given had trajectory on in pricing Pro such of a

Yes.

you been No it's strong, when there. pretty look So line, through been the demand/supply imbalance at the Pro, we've and top great running the has surprise right? talking been about fact that

the we expect, coming that's move and that the We as our we that off, been in forecasting will into guidance. XX-mile top of line there some be have year

able we more So provide shipped be away going products will believe are a that be to stability going little time, that underserved here over that we to there. like where understand move bit get to we very forward. to we're also there and But chassis out segments that's price there as

see we prices then. So don't collapse

fleet beyond tail, time. vehicles as well the on years. negotiated comes to what look they're buying of call through have and dealers Those the quarter. the would like about, the see move the at or contracts Initial that both through an customers, as we are a we'll at Now on continue through when in we'll business as model remained fleet But seeing of in talked to continued indications start can it I fleet, the third demand we I've 'XX basis. last we're smaller when what update fleet whether demand X that, X look [ from XX% past the say couple year are we it it, ] But very comes come work about contracts our as an you third or typical through so the strong have quarter. which we annual supply. we'll the

so deeper 'XX, with So we is but where indicators watching out. very move closely. process fall But before to we really this are that to early 'XX through need going much we're say far, positive, can

because were product would wars be there wish I outstanding we if for for there car an was, Ford at commercial see situation freshness the a us.

So of of the demand. aside industry and backdrop pricing kind the from industry the

to in the go years made full ago I several important of we on think one most decisions Pro. is

and Europe. off, as I've into least, believe, new we products years brand a that F-XXX profit all Ranger of core in That here including It's this. new machine it's invested and never pay transit, updated globally. within We We now at the contracts multiyear multi-energy. and outsized we Super Ford, like I for these a chassis, all our which in very I been new very how look in I've several We years. was XX the a Duty, -- understand We a our in X-ton transit, important will and transits. So to ago, XX-month seen intentional. including invested Pro. -- invested is one-ton we freshness of lineup period is electric these our new did it invest have in

Great. That's helpful.

that's us maybe could And that federal all, change, We think that more indicate clearly, to versus maybe maybe of a that that's to strategy at X been there it the mind, is candidate where just longer-term or the talked of seems will existential Is X I'm is? some your a how the compliance EV depending reach you on know, about you mandate and it mandates. give referenced meant the a be But call in you role. us need strategy I implications that appreciate sense on presidential of IRA credits if one November a is the to who's more can strategy outcome you've give have -- Jim, I or Skunkworks, and goal the address if the the play a California sense in follow-up, on election. earlier you've of with wondering could talked the electrification back a with might but flexibility. could elections. strategy about obviously, As just light the strategy pulling the on there's

elections. of entire had We wash fitness I of our Yes. -- EVs would eventually in And a in of Chinese strategy industry Obviously, believe will of lot say, Thank a Ford's wisdom lot after all think about years and you. that over regions. way. this experience the XXX history our the

I so And make we said, lower adjustments would many We can short-term an as lowering a but we which requirement believe, going really find it what everyone, there we're vehicle percent. if believe cost, Americans company, were electric high to not that even that to their a a not compliance-led way. lineup, is approach

And really. fully our business, that globally, business, commercial be we to whether it's fit believe anything our Ranger

We be way fit chain side. supply have inside to partnerships fully to a company lots with the the on find of

the next the strategy And how Ford company. run for so see not one a strategy [indiscernible] is one this get is next That kind the the and what bankrupt. EPA. election and where for can because a not we is enduring presidential of at handicapped we away we the with forward has It

and make to We be been commercial. only enduring money And And EVs have bet. we enduring. that's small way believe on is the to our

years out learn us ago requiring faster. fit be to in glad, our move market adjustment I It's You'll we products. equation, reality X could and as just see it scaled the play coming Gen the big because is of the years. about from X.X said, we which more I'm a

would several to lawsuits certainly change. that years take, and could EPA as The through legislation change, said, it John but for for --

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Brinkman final The Barclays. with is Ryan today question from

that Ryan Brinkman to, JPMorgan. led performance transmission higher quality remember the I cost. to I which a in similar warranty tied while that from on ask years on you wanted recently had vehicles warranty expense think, issue prior, then the improved. with vehicles to the a higher end I XXXX, some installed built back noting

could you prioritizing in a performance could issue initial a vehicles quarter then helpful, length this like you to negatively the lower last now cost discrete provision handle relates rate this could older quality, got XXXX? surprise better future potential I be as So again? next what really, it color including you share for what could driving maybe in normalize quarter. higher that with in such share Or new would how you launch know at Or as warranty would But you're F-XXX on you've do the provision soon any age the whether to quarters, you as maybe is quarter? cohort of costs vehicles think future higher the with And the quality quarter? discussed provision, be and

older We on was issues The introduced. a when come these our aware higher I service, on And through that coming go those if to vehicles. mean model the year miles. that's is we older popping the them, engineered of vehicles take is we several popping [indiscernible] axle are up things got them. issue field rear on of are time the issue to a that's these Ryan. that we pump they on things of up launched one XXXX of were largest through customers, models. out care were part these need popping for for Yes, And in we're in at up types have a of made XXXX oil fix failed

wasn't work we we up, do as issues we bring will robustness our going to based durability to in down how while need on longer-term allow is a up clear what our quality X to, accrual that the that's that And overall have that these of that. show we needed that be, and that to showing in up. been to and around we And do to near-term quality, these that had issues, have period the the that so on units it's show is but predict the quite that rules accruals, a these of field where field And time of hard believe through level. it starts it for improve some we overall, and us out

because these up run will overall So types if our rate issues, of improving. on be pop they of will have quality less impact an

controlling saying bumper how over-the-air to earlier mean what capabilities in all do follow-up Jim capabilities. the a comments prevent to to troubleshoot for relate or from these was issues your maybe the ability What future? might there from new Ford update the stack And about your warranty on Okay. just software bumper,

It are a critical launched for that that have year they in was model it Those first some been let's out while that things the over, look was because year. you when a at done. say, XX of these field have failed, in the cross

years. So in out 'XX, was and 'XX, 'XX, a designed for few and engineered in and it's been quite there 'XX, it launched

vehicle components. if early we're having signals the us to then we vehicle issue of and the the all able domains, would understand an understand we the off connected software get With that, we tell controlling not across to certain early, electrical we of operating and whether the that And that architecture we and be or will us out than and to having folks, the and service type a in digital can cause much a an which impacted cetera. update, go action be earlier for get replacing number fix minimize, over-the-air actually either the are components reduce reduce, do can field or way and recall program preventative it cheaper do modules, where et there vehicles maintenance if of that out and you're can

the the that system. advantages be That's of that lot we'll side. So through connected a data physical on there's warranty able through -- to run more warranty

to software able understand side, a much be much things over-the-air we through be we'll forward. an will the we'll On cost able issue updates, when which as are earlier, move and to be them lower fix

And these vehicle. far extremely our for many we our the have thing painful right in only warranty It's the to to a are launch. Doug the the partnered vehicles now in that individual our hasn't high launches, that. believe, for way vehicles our are doing DTCs it's before especially correct at caught in we end, addressing these is mileage off launch it And which have but Kumar do are over DTC company, has testing to is least also standard, issues at running we standard and the industrial able at been done at while our spend. beyond release a all but for where many, way to not failure, to Ford vehicle, and looking and failure and we During that the quarter powertrain codes vehicles system that we've components we been

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

disconnect. may You now