Automotive News - February 12, 2024 - 44

44 * February 12, 2024
AVIATOR
continued from Page 4
year as Lincoln had to cease production
for weeks because of a quality issue related
to a camera recall.
Driver-assist features
For the first time since its latest launch,
the Aviator will come with the company's
BlueCruise hands-free driver-assist feature.
It will be standard across all trims
and customers will get four years of the
service free.
The Aviator will also feature the recently
introduced Lincoln Digital Experience
infotainment system, designed to be
more user-friendly. The system also gives
buyers the ability to play video games or
watch YouTube.
Officials say the new technology ties into
the brand's long-running " quiet luxury "
theme.
" With the new Aviator, technology takes
FORD
continued from Page 4
Two years ago, coming out of the pandemic, he said, the company
didn't have enough manufacturing capacity and raced to
build more products. After production constraints eased and
early adopters bought their vehicles, remaining customers
haven't been as willing to pay such high prices.
" This is a huge moment for us, " Farley said. " What we've seen,
because we offer everything, is that pricing quickly converged to
hybrids, after any benefit from subsidies. ... We're betting that
choice and flexible manufacturing is going to get us successfully
through this transition. "
'Magical breakthrough'
Farley said this week that Ford expects hybrid sales to grow 40
percent this year, after rising 25 percent in 2023. It's cutting the
hybrid variant of its Explorer and Lincoln Aviator crossovers but
anticipates more volume from the Maverick and F-150.
COO Kumar Galhotra said the F-150 could become the nation's
top-selling hybrid.
Executives said Ford is in good shape despite the longer -thanexpected
transition to EVs because of the strength of its combustion
business. That division, Ford Blue, earned $7.5 billion in
2023.
Earnings for the Ford Pro commercial unit more than doubled
to $7 billion as its profit margin rose to 12.4 percent. CFO John
Lawler said that business has " exceptional upside we're only beginning
to realize. " Farley said Ford Pro brought in roughly
500,000 paid software subscriptions last year, up 46 percent. He
said software and services would account for 20 percent of Ford
Pro's earnings in two years.
" Ford Pro is really a magical breakthrough for our customers,
our company and, I believe, the industry, " Farley said.
In 2024, Ford expects adjusted earnings before interest and
DEALERS
continued from Page 4
material from the team ran long. Given we only
have an hour and 15 minutes and there are other
franchise meetings and flights, we wanted to be
very respectful of everyone's time, so the team
called an audible when they only had three minutes
to go. It would have been completely insincere
to hold a short Q&A. "
Frick said the apology email included an offer
by Ford officials to answer any questions sent via
email. Frick also noted Ford had roughly 1,200
visitors to its NADA Show booth, open throughout
the weekend, which was filled with multiple
information stations staffed by company representatives.
" I
do think there was plenty of time to have
plenty of conversation and dealer engagement, "
Frick said. " The whole weekend was action-packed,
and every event we had was set up
for dealer interaction. "
Meeting details
Still, the lack of a formal question-and-answer
session was notable in that David Wilson, chairman
of the Ford National Dealer Council, previously
told Automotive News that he was planning
Lincoln hopes the 2025 Aviator, shown in
preproduction, will help turn sales around.
an even larger role in helping create a relaxing,
luxurious space that our clients
have come to appreciate and expect from
Lincoln, " Heidi Shaffer, director of Lincoln,
said in a statement.
" With advanced, connected features
like the Lincoln Digital Experience and
BlueCruise hands-free driving technology,
we are creating a new, digital sanctuary
on the road. "
The freshened crossover sports an updated
grille that's been raised slightly to
align with updated headlights.
Lincoln is adding a new " Jet Package, "
available on all trims, that comes with
unique wheels and special design cues.
More standard features
Lincoln said it added more standard
content on the 2025 model, including a
heated steering wheel, wireless phone
charging, adaptive suspension and a
panoramic vista roof.
Customers can choose from two new
exterior colors on high-end Black Label
models: Cenote Green and Whisper Blue
Metallic.
While executives once said the Aviator
could be the brand's top-selling nameplate,
last year's sales decline made it Lincoln's
smallest product by volume. Officials
are banking on a rebound in 2024 as
part of a push to reach at least 100,000
U.S. sales for the first time since 2020. x
WAYMO
continued from Page 8
require self-driving service to be
authorized by a local ordinance
in each city and county where
the service operates. If enacted,
the legislation could hinder
Waymo's sprawling advance by
giving local governments authority
to
determine when,
where - or if - it can operate.
Currently, autonomous vehicle
deployments and commercial
businesses are regulated at
the state level by the Department
of Motor Vehicles and the
Public Utilities Commission.
The proposed legislation marks
Ford financial results
4TH QUARTER
Net income
Adjusted EBIT
Revenue
EBIT margin
Source: Ford Motor Co.
taxes of $7 billion to $7.5 billion for Ford Blue and $8 billion to
$9 billion for Ford Pro.
Lawler said Ford is benefiting from selling EVs, even though
they are not yet profitable. The company is learning a lot about
early adopters' buying habits, he said, and each F-150 Lightning
essentially offsets 12 combustion vehicles when calculating
compliance with emissions standards.
" Please make sure you're seeing the big picture as you look at
Ford and compare us to others, " Lawler said on a call with media.
" I very much like where we're at, where we're going and
how we'll lead and win. "
Ford said it expects total EBIT of $10 billion to $12 billion this
year and adjusted free cash flow of $6 billion to $7 billion.
The company expects lower pricing and higher labor costs this
year from its recent UAW contract, but executives said a $2 billion
cost-cutting effort will help offset those headwinds to
achieve its earnings target.
Parallel park feature to be removed
For example, Galhotra said an engineering team developed a
new aerodynamic design that saved $10 million on one vehicle
line, and the company is removing a little-used parallel park
feature to save another $10 million.
" These are the kinds of very robust ideas we have in the hopper, "
Galhotra said, " along with less inflationary claims, along with a
stable supply chain, that's going to help us close that gap. " m
for more such interaction this year.
" We're going to have a dealer panel at the make
meeting, and there's going to be more Q&A from
the dealer body, " Wilson said ahead of the show.
" We're going to have more of a two-way conversation. "
A
Ford spokesperson declined to make any executives
available for comment immediately after
the meeting. Wilson, reached later by phone,
declined to comment on it.
The 75-minute gathering included presentations
from dealer council leaders and subcommittee
chairs, according to people in the room.
Elena Ford and Rob Kaffl, director of U.S. sales,
spoke on behalf of the automaker. Executives
who attended but did not speak included Frick
and CMO Lisa Materazzo.
The speakers discussed the need to improve
quality, help with vehicle affordability and improve
dealer communication, dealers said, but
gave few specifics.
" There was not a lot of meat and potatoes, " one
attendee said.
During the earlier meeting, on Feb. 2, executives
acknowledged that Ford had caused " pain
points " for dealers on a number of issues and
promised to adapt its transition to EVs in response
to their concerns.
$526 million loss
$1.1 billion
$46 billion
2.3%
2023
$4.3 billion
$10.4 billion
$176 billion
5.9%
the latest political effort in the
state to wrangle autonomous vehicle
deployments. A bill that
banned self-driving trucks from
public roads passed the California
Legislature last year, but Gov.
Gavin Newsom vetoed it.
The new proposal, Senate Bill
915, would augment, not replace,
state regulators.
It " returns control to the local
communities who know their
streets best, " said Cortese, a
Democrat whose district encompasses
much of Santa Clara
County in the heart of Silicon
Valley.
Cities seek a voice
Cities have clamored for more
over
local authority
deployments,
especially after a rash of
high-profile problems and
crashes in San Francisco. Robotaxis
have clustered at intersections
and interfered with first responders.
Those
problems fomented a
backlash from local residents
last summer. Some placed orange
construction cones atop
the front hood of robotaxis,
which rendered them inoperable.
In
October, a vehicle operated
by GM's Cruise ran over a pedestrian
who had been tossed into
its lane following a collision with
a human-driven car. The Cruise
stopped, then resumed driving
to pull over, dragging the person
underneath. California DMV officials
revoked the company's
" I know you're not feeling great right now, and
I'm here to fix it, " Elena Ford said during that
meeting, two people in the room told Automotive
News.
After publication, a spokesperson clarified that
her exact comment was: " I know you're not feeling
good right now for several reasons, and we
are working to change that. "
Betting on network
The earlier meeting was for dealers who sell
fewer than 300 vehicles annually, a group that includes
about half of the company's 3,000 U.S.
stores, officials said.
Farley told those dealers that EVs are risky for
the automaker and the retail network and that
he had anticipated the company wouldn't make
the transition flawlessly, the two people at the
meeting told Automotive News. Farley promised
to continue adjusting its EV certification program
and said Ford bet on its retail network rather
than a direct-to-consumer model like Tesla
uses.
Tesla CEO Elon Musk " doesn't like you or our
model, and we will continue to support you, " Farley
said, according to one attendee.
Frick said Farley's listening tour, which will take
place from March to April, will involve meetings
permits, and the crash has
brought self-driving safety concerns
to the forefront.
As more widespread service
unfurls, city officials want a
greater voice in how those vehicles
are deployed.
" Right now is the time for
Cruise, Waymo and Zoox to say,
'We welcome sensible regulations,'
rather than do what
they've done the last half-dozen
years, " said Aaron Peskin, president
of the San Francisco Board
of Supervisors.
But SB 915's passage would
mean that in Waymo's case, the
company would need dozens of
municipalities to pass ordinances
to bring expansion plans
to fruition. That's an arduous
hurdle to widespread deployments,
and it could deny the
company a critical mass of riders.
'Harm'
innovation
" If I want to go visit my mom
one town over, and that town
doesn't have the ordinance,
then I can't take a Waymo there, "
Brulte said. " What this bill does
is harm California's innovation
economy. "
The bill likely would not receive
a vote until
later in the
year.
Meanwhile, the California
Public Utilities Commission will
consider Waymo's expansion
application. The staff has until
Feb. 20 to approve, deny or suspend
the application. In the case
of suspension, the staff may continue
its review for as long as 120
extra days, according to a commission
spokesperson.
The decision will be made by
the agency's staff rather than a
full vote from the commissioners.
That would change if the
agency received a protest. In
that case, a vote would be held
in a public meeting.
The commission process is
" rigorous, " Waymo said in a written
statement. " We remain committed
to our safety-driven,
community-first deployment
approach that has served our
riders well in San Francisco and
Phoenix. " a
with about 900 dealers.
" I think we'll get to go through a whole other
level of engagement on issues the industry, our
dealers and Ford is facing so we can all get on the
same page, " Frick said.
During the first meeting, the company said that
it will implement a U.S.-only version of its Salute
to Dealers honor specifically to recognize small
dealers doing notable community service work.
It also plans to reinstitute a program to ensure
small dealers can satisfy customer orders even if
they run out of allocation.
" We heard from them that they sometimes felt
their voice wasn't being heard, " Matt Atkenson,
Ford's U.S. field operations manager, told Automotive
News on Feb. 2. " They heard from all the
way at the very highest levels of our company
that we want to hear from you. "
Frick, who noted that dealer sentiment will be
folded into performance reviews for each member
of his team globally, said he was pleased with
this year's NADA Show.
" I think the sentiment in the room was far
greater than it was a year ago, " he said. " We're another
year into a very complicated industry dynamic.
The dealers left knowing that improving
dealer sentiment is top of mind for all of us at
Ford. " a
Automotive News - February 12, 2024

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