Automotive News Canada - November 2022 - 10

10
11.22
OPINION
Ford is getting bloody,
but for good reason
ON THE SURFACE, FORD TELLING
dealers they have to spend upward of
$1.3 million to join a new program so
they can sell electric vehicles seems,
well, nuts.
The new
These are franchised dealers whose
sole reason for being in business is to
sell Ford vehicles. That's what they do.
Now they have until Dec. 16 to decide
whether to pay extra to sell EVs? That
seems nuts until you consider where
that money is
going: into their
own stores.
programs for
Ford dealers
to sell EVs
seem draconian,
but they're
likely the only
way to have
standardized
sales and
service.
Mirroring a similar
plan in the
United States, there
are two membership
programs that
Canada's 440 dealers
need to consider.
They both begin
in 2024 and they're
tiered, as you might
find for a membership
with Spotify or
your local gym. The
first program, called
Model e Certified,
costs about $560,000 per rooftop,
according to Ford, and provides dealers
with what could be termed as
basic access to EVs to sell.
The second tier - the $1.3-million
program aptly called Model e Certified
Elite - gives dealers full membership
access to EVs to sell as well as to
internal combustion vehicles, like they
have now, actually. Dealers who don't
want to join either program can sell
only internal-combustion vehicles.
More details on the programs are
in a Page 1 story, but what's missing
is why Ford is taking this approach.
Automotive News Canada did not get
that answer, but I'm going to take a
stab at it: Dealerships are going to
have to spend money on infrastructure
and training to sell and service EVs, so
Ford just formalized that and gave it a
name.
Toronto Bureau Chief David
Kennedy likened the approach to that
of McDonald's restaurants: No matter
where you are, a Big Mac tastes like a
Big Mac. He might have said cheeseburger,
but the point is consistency.
Better that than the alternative:
Dealers, unsure of what, exactly, to
invest in, spending money on the
wrong things. A standardized approach
- doing things the Ford way, just as
EDITOR-IN-CHIEF
JEFF
MELNYCHUK
the franchises have always done - is
the best way to get all the dealers on
the same page and moving in the
same direction, and to keep a certain
standard of sales and service across
the country. (Ford, if I missed the boat,
you can certainly call me out.)
According to a Ford spokesman,
about 90 per cent of the program
money will go for infrastructure, which
is a good thing. We did not find out
what the other 10 per cent is for, but
training, administration, communication
and overhead would not seem out
of the ordinary.
Where this comes off the rails a bit
is the amount dealers pay should be a
variable, reflecting their markets.
Perhaps the amount should be based
on total sales, because there's no way
that a small Ford store in a rural area
needs the same (90 per cent of)
$1.3-million infrastructure as a
large-market store.
" Ford has to be open-minded, " said
Steve Chipman, CEO of Manitobabased
Birchwood Automotive Group.
" One size doesn't fit all. "
Indeed.
Chipman said he's upgrading his
stores for EVs anyway (Birchwood has
24 dealerships representing 22
brands, including three rural-Manitoba
Ford dealerships and one in Winnipeg)
and is taking the new Ford programs
in stride as part of the cost of running
a franchise.
But Ford must be on the right track,
because other brands are quietly
watching how this is playing out. They
know that they will need to prepare a
similar strategy to ensure Big Mac (or
cheeseburger) consistency of EV sales
and service and that their retailers are
on the same path and spending
money on the right stuff. How will
Stellantis or GM Canada or Honda
handle the same issue? We'll probably
find out soon enough.
In the meantime, Ford is likely to
keep getting blowback from dealers -
especially in the United States - but
the first one through the wall always
gets bloody. - ANC
DURING HIS ADDRESS TO A recent
industry gathering in Windsor, Ont.,
Rick Rajaie, Foxconn's vice-president
of North American operations,
made a point of highlighting his
dual citizenship.
" I'm a proud CanadianSuppliers
should
start courting
new EV players
that want to plant
a flag in North
America.
American citizen, " Rajaie told about
300 attendees of the Automotive Parts
Manufacturers' Association's (APMA) annual conference
Oct. 19. Although his current employer is headquartered
in Taiwan and known more for assembling
iPhones than cars, the engineering executive mentioned
his lengthy experience in Ontario's automotive
industry, credentials seemingly aimed at forging a
connection with his supplier-based audience.
" Today, I have a real agenda and a hidden agenda, "
he said. The " real agenda " focused on a slide
presentation of Foxconn's
development into an international
electronics giant and
recent foray into automotive.
Rajaie joined Foxconn about
17 months ago and currently
steers the company's electric
vehicle business in the United
States, which includes a contract
manufacturing plant in
Ohio, building EVs for Fisker
Inc., and Lordstown Motors. It also plans to manufacture
electric tractors and battery packs for Californiabased
Monarch Tractors.
Foxconn, said Rajaie, was drawn to the Ohio
plant's " proximity to Michigan and Ontario. "
And it has aggressive growth plans on this continent,
he said. Hence, his " hidden agenda. " Foxconn
is seeking partnerships with Ontario's rich supply
chain, he said. It's an invitation parts makers seeking
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Potential gold rush of business
for suppliers of new EV brands
MACALUSO
MANAGING EDITOR
GRACE
a foothold in the emerging EV market
should seriously consider, said Joe
McCabe, CEO of AutoForecast
Solutions, a U.S.-based industry forecaster
and consultancy.
Foxconn is among a growing
number of new players looking to
plant a flag in North America's EV
market, said McCabe, also a speaker at the APMA
conference.
The list includes: China's GAC,
Geely, Chery, SAIC Motor and BYD
Auto; Vietnam's VinFast; Amazon's
Zoox, Inc.; California's Faraday
Future, Rivian and Lucid.
Suppliers need to look beyond
traditional car companies, such as
Honda, Volkswagen and the
Detroit Three, and begin courting
companies " that want a position
in North America, " said McCabe.
Governments in Canada and
the United States, he noted, are
" pushing for more nontraditional
[automakers]. It will be a very
profitable course. "
BYD, which is partially financed
by U.S. billionaire Warren Buffett, is " on the top of
our list of potential China-based carmakers to launch
EVs in North America, " said McCabe.
Its global expansion has focused on Europe, but
it's laying the groundwork for North America, and it
currently produces electric buses in California, he
said.
Foxconn's Rajaie wrapped up his presentation with
a pitch to his audience.
Rajaie:
Foxconn's
growth
plans spell
opportunities
for Canadian
suppliers.
FILE PHOTO
" I want you guys to reach out to me, " he said.
" We have a ton of opportunities. " - ANC
A laundry list of challenges
to drive self-driving vehicles
SADLY, IT APPEARS THE
closest I'm ever going to get to
enjoying a driverless vehicle is by
watching reruns of " Knight
Rider, " a childhood TV favourite
of mine. In the show, a Pontiac
Trans-Am named KITT - powered
by artificial intelligence -
drove actor David Hasselhoff
around to fight crime.
I came to that realization Nov.
2 when I interviewed Hanif
Datoo, Telus vice-president of
technical sales and the telecomm
Building
an
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KEITH E. CRAIN, EDITOR EMERITUS
autonomous taxi
is 'harder than
putting a man
on the moon.'
giant's expert
in connected
vehicles.
Since I
began this
job more
than six
years ago,
I've been
hearing and reading that
self-driving cars are coming, and
soon.
Not so, says Datoo, who was
my guest on the Automotive
News Canada Podcast.
He laid out a laundry list of
challenges the industry faces.
There's network lag and
incomplete coverage of 5G connectivity;
the integration of networks
with traffic systems; the
ability to identify and connect
with other vehicles, critical infraDIGITAL
AND
MOBILE EDITOR
GREG
LAYSON
structure, cyclists and pedestrians;
precise positioning within a
lane of traffic, inclement weather;
and congestion.
As I read back the list of
potential problems, I imagine one
of those voiceovers at the end of
an American ad for a new medication
warning me of all the risks
and side effects involved.
" There's a lot of work to be
done, " Datoo told me.
No kidding.
Maybe that's why Ford and
Volkswagen Group on Oct. 26
pulled out of Argo AI, the autonomous-vehicle
technology company
partially bankrolled by the
automakers.
Doug Field, Ford's chief
advanced product development
and technology officer, said building
an autonomous taxi capable
of navigating in a dense urban
landscape is " harder than putting
a man on the moon. "
And Ford isn't NASA.
" Profitable, fully autonomous
vehicles at scale are a long way
off and we won't necessarily
have to create that technology
ourselves, " Ford CEO Jim Farley
said in a statement.
So, just how far off?
" There's no good way to make
a prediction, " said Datoo. " Level
4 and Level 5 autonomy is hard.
The way we think about it is. . .
what does it take to get technology
innovation to about half the
population? "
Well, when it comes to cellphones,
Datoo said, for example,
it took 20 years - from 1985
through 2005 - for 50 per cent
of Canadians to own one.
" Assuming Level 4 and Level
5 technology
challenges are
solved by the
end of this
decade, we're
probably looking
at mass
adoption by
the 2045 or
2050 time
frame. That's
nothing more
than a
guess. "
I'll be 74
years old.
Datoo:
" There's a lot
of work to be
done " to bring
self-driving
technology to
the masses.
FILE PHOTO
At least I won't have to drive
to my doctor's appointments.
And surely I'll be able to watch
" Knight Rider " on the way, right?
- ANC

Automotive News Canada - November 2022

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