What are your priorities as chairman this year?
We always focus on policy, and that never goes away, but things are moving so fast, both with the industry and with Ford Motor Co., that I think the most important thing we can work on is the communication. Things change so darn fast that if you go four or five days and you don’t really take the time and energy to make sure it’s communicated out to the whole dealer body, all of a sudden things get off the tracks. That’s something the entire dealer council has done to try and improve. You can never overcommunicate, and that’s going to be a big piece of what we concentrate on this year.
What’s the inventory situation like now and what’s the outlook for 2023?
It’s improving significantly. I have probably three times the amount of inventory on my lot that I had as recently as 60 days ago. I’m still well under half of what I was at when we went into this. But I also think the world we’ve lived in has shown us that I don’t think we’re going to get back to the inventory we were at going into the supply chain shortages. We’ve seen the most important thing for a Ford dealer is how fast we turn the vehicles, not how many we have.
Where we end up is probably going to end up somewhere in between. It’s proven to be a good model. It took a lot for us to figure it out. At one point, 70 percent of what we were delivering had been from what people had previously ordered. We realized that when they get delivered and come off the truck and someone picks them up, that’s a real good formula. As we evolve, we’ll have more stock inventory than we’ve had recently, but I also think we won’t walk away from the lessons we’ve learned in how important ordering and turning inventory is.
Where are your Lightning buyers coming from?
On Mustang Mach-E, we’ve seen an incredibly high percentage, as high as 80 percent, are people who have really never done business in a Ford store. They’re really completely new to our world, which is incredibly exciting.
Lightning is slightly different. There’s kind of a few buckets. A bucket of people that haven’t done business with Ford, so it’s a growth opportunity. I think you have a bucket of people that are Ford customers, but they’ve never been Ford truck customers. They might be SUV or even passenger cars. And for whatever reason, whether it was fuel economy or whatever, they weren’t in trucks. We’re also seeing loyal, longtime Ford truck customers that are transitioning into the world of electrification. It’s an exciting demographic because it almost excludes no one. It’s an eclectic group, but the common denominator is that they all seem to love the Lightning.
What are the Lightning’s chances against vehicles like the Chevrolet Silverado EV or Ram’s upcoming EV pickup?
I’m confident in that we’ve always held serve in that segment. With Ford, it’s in our DNA. That [gasoline] segment is very competitive and is really the foundational segment of our brand. We’re certainly not flat-footed. It isn’t as if it’s a big surprise GM or Stellantis are entering into electrifying the full-size truck segment. Just like in our [internal combustion engine] world of trucks, we’re the leader. It’s not an accident that we are the first entry into that segment. By the time they’re delivering theirs, we’ll have delivered tens of thousands if not hundreds of thousands of our electric pickup.
It’s hard to make up ground in this industry. When you get that kind of head start … we all know that products evolve. We’re going to continue, like we do with all products, to expand, refine to always make better in all ways that we can. By the time that some of our competitors get into the game, we’re going to be into our second and third model years, and we know that every model year that comes out is better than the previous.
I feel very confident in the approach that we have. I also think we have a competitive advantage based on the structure of the company. I don’t think it can be overstated what a really good setup we’re in by splitting the two divisions. We’re just seeing the tip of the iceberg in terms of what that will do from a competitive standpoint over the three, five or 10 years.
Is the pushback to Ford’s dealer EV certification program fair?
I think the concerns are fair.
I’ve had a lot of conversations with state associations. Franchise laws are really interesting. I’ve become more of an expert on them then I ever thought I would be. The interesting thing about it is that it’s state by state.
We’re on a really good path right now. We’re working together with the company to make some adjustments. What I’ve tried to share with the state associations is that dealer council is made up of 30 dealers representing the other 2,900-plus. They represent all sizes and regions. I think the most effective way is to work within the process.
We’ve got a really good process in place. It’s very collaborative with the company, and the company is very transparent with the council.
In a perfect world, I would have preferred more time to work on the initial certification tenets and not have that be announced when it was. But the company is moving at a very fast pace, and I understand that. So they announced them last year, but the critical piece was that was the starting point, not the finish line. I’ve been working with the company and going back and forth with the state associations. I’ve also appreciated the support of NADA and their role in helping facilitate all of us together. I’m confident we’ll come to a place where all sides feel we’re fair and within the boundaries of the franchise laws and in a position where Ford can compete and win and where our customers can be put in a position where they have a level of service that is industry-leading.
What’s missing from the lineup?
I think it’s an industry issue, and we’re not immune. Affordability is not getting better, it’s getting worse.
If I was going to add something to the portfolio, be it ICE, Model e or Ford Pro, it would be an affordable vehicle that provides as inexpensive transportation as possible. Costs continue to go up and now for the first time in really a decade, we’re now in a world of much more normal interest rates. We’ve operated in a world of free money, or close to it, for the last decade. Vehicles are substantially more expensive than the last time we had normal interest rates.
Affordability isn’t going away. It’s going to be a bigger challenge as time goes by. People would be amazed at the amount of consumers who purchase a vehicle and have a car payment over $1,000. There are no bad ideas when it comes to affordability, other than not having something that’s affordable. We have to continue to figure out what better idea is there in terms of an inexpensive vehicle or a creative way to finance that vehicle. Over the course of ’23, I see that as one of the biggest challenges our industry is going to have.
Is the Maverick a good first step in terms of adding affordable products?
Credit to the company because they showed affordability isn’t another word for cheap, meaning no content or quality.
Maverick, I think, is the best value of any product in our industry. A testament to that is that it’s sold out, and every time we open the order bank we don’t open it for long because it sells out again. It shows that when you come with something that has as high a quality and all the capability that Maverick has and can do it at a price point that makes sense to the American consumer, you can’t build enough.
This year Ford will begin selling a redesigned Super Duty and Mustang, as well as an updated Escape. What’s going to be the most important launch of the year?
It’s the all-new Super Duty. Because of the microchip and supply chain shortages, there’s a pent-up demand for Super Duty probably unlike any other time in history. So to bring out, quite frankly, the greatest truck in the history of mankind with all the things it encompasses, the timing couldn’t be better. Dealers are chomping at the bit. Ultimately, that’s the halo over our brand. We’re Ford, we’re Built Ford Tough, and F-Series is how we pay the bills. And it’s not just this year. When you look over the next few years, this Super Duty will be really critical to the success of the company and the dealer body.
