Ford CEO Jim Farley Talks Culture Change

Summary

Bloomberg Talks: Ford CEO Jim Farley Talks Culture Change

Date: June 25, 2026
Host: Matt (Bloomberg)
Guest: Jim Farley, CEO of Ford Motor Company

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Episode Overview

In this episode, Bloomberg speaks with Ford CEO Jim Farley about the company’s remarkable quality turnaround, the cultural changes that drove results, and Ford’s increasing integration of technology and data-driven processes. Farley also discusses Ford’s strategy in the professional vehicle segment, growth in subscription services, movement into energy storage, and Ford's ongoing motorsport ambitions, including Formula 1 and Le Mans. The conversation highlights how the combination of American manufacturing know-how, obsessive attention to detail, and smart adoption of technology have powered Ford back to the top of the quality rankings ahead of global competitors.

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Key Discussion Points & Insights

1. The Journey to Quality Leadership

• Culture Shift (00:25 - 01:24)
  • Farley emphasizes the transformation at Ford as a “culture change” focused on putting quality above all else.
  • Every engineer and supply chain team member is deeply involved in the production process.
  • Notable Quote:

    "It took us four years of hard work to be an overnight success story... It’s really about the culture of putting quality before profits, before anything else."
    — Jim Farley (00:45)

2. The Role of Technology and Human Talent

• Factory Processes & AI (01:24 - 02:19)
  • Ford has implemented control centers that measure key metrics (e.g., torque of fasteners) and adopted AI-driven vision systems in plants.
  • However, Farley stresses “old fashioned hard work” is just as important as tech.
  • Notable Quote:

    "...most of all, it's just old fashioned hard work of our team members all working together to pay attention to the very small details..."
    — Jim Farley (01:39)

• People Power (02:19 - 03:53)
  • Ford’s workers are highly engaged with daily quality metrics and benchmarking against competitors.
  • 85% of Ford’s vehicles are made in the US by US factory workers.
  • Notable Quote:

    "These are American workers beating Toyota and Hyundai and our domestics who import their vehicles. We beat them all with American workers with the, with the attention to detail."
    — Jim Farley (03:18)

3. Financial Impact of Quality Improvements

• Profits and Margins (03:53 - 04:39)
  • Warranty and recall costs have significantly declined, saving Ford “hundreds of millions of dollars.”
  • Ford has renegotiated parts costs and optimized supply chains and inventory, contributing additional savings.
  • Notable Quote:

    "We're seeing our warranty coverages come down, we’re seeing our recall costs come down. These are all contributing... hundreds and hundreds of millions of dollars of a tailwind for Ford on cost."
    — Jim Farley (04:13)

4. Ford Pro: Professional Segment Growth

• Durability and Subscription Services (04:39 - 06:39)
  • Ford Pro’s customers rely heavily on vehicle durability, requiring years-long reliability, not just 90-day quality.
  • Ford Pro subscriptions up 30–40% quarter over quarter, with gross margins over 80%.
  • Subscriptions provide fleet customers with productivity tools, predictive maintenance, and data analytics to minimize downtime.
  • Nearly a million subscriptions; Farley highlights that providing productivity, not just vehicles, is core to Ford Pro’s value.
  • Notable Quotes:

    "What people are buying, they're buying productivity... All these productivity software tools...allows them to reduce their cost and improve their uptime so their vehicle is never off the road."
    — Jim Farley (05:41)
    "We're now able to send them prognostics or predictive failure of vehicle components so that their vehicles are never off the road. They could do that predictive maintenance, you know, before a problem happens. And they absolutely love."
    — Jim Farley (06:17)

5. New Opportunities: Energy Storage & Infrastructure

• Battery and Grid Solutions (06:39 - 08:44)
  • Ford is scaling up domestic production of energy storage batteries, targeting both sustainable grid and hyperscaler data center markets.
  • Ford aims for 20 GWh of annual energy storage capacity across two plants.
  • The company has announced a major contract with EDF (~5 GWh) and is in talks with hyperscalers (Microsoft, Amazon, Google, Meta).
  • Notable Quotes:

    "We're now going to be one of the biggest domestic makers of energy storage batteries... Not only for sustainable grid and the grid reliance, but also hyperscalers."
    — Jim Farley (07:19) "We've had literally hundreds of customers now in the contracting phase. We announced one large one, EDF, and they've committed about 5 gigawatt hours over the course of several years now."
    — Jim Farley (08:10)

6. Financial Outlook and Growth Prospects

• Sales & Guidance (08:44 - 09:41)
  • Farley is optimistic about 2026 performance, highlighting strong truck sales and continued growth in both core and non-vehicle businesses.
  • No updated EBIT targets provided due to upcoming earnings release.
  • Notable Quote:

    "I love American consumers. They absolutely love our Ford trucks... I really believe June could be a breakthrough year month for Ford sales."
    — Jim Farley (09:26)

7. Motorsport Ambitions: F1 and Le Mans

• Formula 1 Partnership (09:41 - 11:03)
  • Ford’s Red Bull F1 powertrain declared “the most powerful” in the series by the FIA.
  • Farley praises Max Verstappen’s talent and notes Max’s contract includes performance clauses.
  • Notable Quote:

    "The FIA and the Formula One said that the Red Bull Ford powertrain was the most powerful powertrain in the paddock... if we give it to Max, he will definitely deliver..."
    — Jim Farley (10:16)

• Le Mans Return & Recruitment Aspirations (11:03 - 11:50)
  • Ford will return to the Le Mans Hypercar class in 2027; Farley hopes to convince Verstappen to drive.
  • Highlights Ford’s historic Le Mans legacy.
  • Notable Quote:

    "We're still the only [American company] and we're going next year to win. It would be great to have Max in the Ford hypercar. You know, I'm going to have to really put on my charm school act to get him in that car though."
    — Jim Farley (11:30)

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Memorable Moments & Quotes

• On transformative company culture:

  “It took us four years of hard work to be an overnight success story... putting quality before profits.”
  — Jim Farley (00:45)

• On US workforce pride:

  “These are American workers beating Toyota and Hyundai and our domestics who import their vehicles. We beat them all with American workers with the, with the attention to detail.”
  — Jim Farley (03:18)

• On the productivity of Ford Pro:

  “What people are buying, they're buying productivity... All these productivity software tools... allows them to reduce their cost and improve their uptime so their vehicle is never off the road.”
  — Jim Farley (05:41)

• On Ford’s battery opportunity:

  “We're now going to be one of the biggest domestic makers of energy storage batteries... Not only for sustainable grid and the grid reliance, but also hyperscalers.”
  — Jim Farley (07:19)

• On motorsport (F1 & Le Mans):

  "The FIA and the Formula one said that the Red Bull Ford powertrain was the most powerful powertrain in the paddock."
  — Jim Farley (10:16)

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Timeline of Important Segments

• 00:25–01:24: Ford’s culture change and winning back quality leadership
• 01:24–03:53: Technology, AI, and the human factor in process excellence
• 03:53–04:39: Financial impact of improved quality
• 04:39–06:39: Ford Pro: vehicle durability and subscription business
• 06:39–08:44: Energy storage strategy and new contract wins
• 08:44–09:41: Ford’s current financial outlook and market momentum
• 09:41–11:50: Ford’s ambitions and successes in Formula 1 and endurance racing

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Summary

This episode underscores how Ford’s return to the top of automotive quality rankings required a holistic, multi-year transformation in both culture and process—one rooted in American manufacturing, empowered labor, and smart technology usage. Jim Farley’s insights reveal a company thinking beyond cars: from next-gen productivity services for professional fleets, to building the batteries of the future for both vehicles and America’s energy grid, all the way to motorsport ambitions on the global stage. The narrative is one of grit, skills, and forward momentum—anchored in the belief that excellence is a collective, sustained effort.

Transcript

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[Jim Farley]

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[Matt]

Let's, let's kick it off, Jim. I mean, it is such an incredible feat, not only coming back from the slide that you were in, to take number one, the number one spot, I mean, number two or number three would have been impressive, but beating Toyota, beating Honda, they're legendary for quality. How did you actually achieve that?

[Jim Farley]

Well, it took us four years of hard work to be an overnight success story. You know, it's been, it's been just an amazing culture change at Ford. Literally, Matt, every one of our engineers has been in the plant. Every one of our supply chain teams are in our suppliers. We are paying attention to every detail. It has taken a few years to get there, but I think it's really about the culture of putting quality before profits, before anything else. And that really is what's exciting about this because now what I'm seeing is the team really focusing on long term durability.

[Matt]

So was it your team? Was it an employee, a labor issue? Was it, you know, technology? Did you use AI? Was it factory processes? Like, can you get into specifics of how you did it?

[Jim Farley]

Yeah, if you, if you were to visit today, the Rouge plant where we make the F150, Matt, what you would see is a whole control center around data and quality data. So we measure the torque of every one of our fasteners. We have AI tools for vision system. But most of all, it's just old fashioned hard work of our team members all working together to pay attention to the very small details that will make a difference between a perfectly built Ford and an okay built Toyota. It's just an incredible attention to every single detail.

[Matt]

So I mean, it's interesting now that we're in the age of AI and we're talking about this technology killing jobs, but it seems like in your case, it's really experienced human workers that made the big difference.

[Jim Farley]

It did. I have to say, the process coaches, the area coaches, you know, they get up every morning, they look at the last shifts, quality data, we look at how many vehicles are repaired, and we work that process every moment of every day. Every employee walks into any one of our plants, they know exactly are we winning or are we losing. Yesterday and today, everyone is fully aware of where we stand. We know exactly where Toyota is. We knew exactly how to, you know, where we needed to get to beat Tundra and Super Duty better than any of the other domestic competitors. And so everyone is aware. Exactly. The quality is coming out of our plant in any particular shift every 50 seconds. And that is that human motivation to pay attention to everything is amazing. We make 85% of our vehicles in the U.S. matt. That means these are U.S. factory workers versus even our domestic competitors. They're some of the biggest importers in the US we're not building these vehicles in South Korea or Japan. These are American workers beating Toyota and Hyundai and our domestics who import their vehicles. We beat them all with American workers with the, with the attention to detail.

[Matt]

It's an incredibly compelling narrative. I agree. Of course being at Bloomberg, we're focused on the numbers and quality issues. Recalls and the like had dragged down profits and margins to some extent over the past few years. Can you quantify in dollar terms how much this will contribute to your recovery this year?

[Jim Farley]

Hundreds of millions of improvement. We're seeing our warranty coverages come down, we're seeing our recall costs come down. These are all contributing to liter hundreds and hundreds of millions of dollars of a tailwind for Ford on cost. But we didn't stop there. We also negotiated our parts costs with our suppliers. We've looked at all of our bill material and even our manufacturing inventory in our plants and all our manufacturing logistics costs.

[Matt]

Imagine for Ford Pro it's the most important. You've got incredible growth there. You've got double digit margins, you've got 30% subscription growth. Correct me if I'm wrong on any of those numbers.

[Jim Farley]

Yes.

[Matt]

How important is this for Ford Pro and does it change the picture at all?

[Jim Farley]

Why? Good question. I would say for Ford Pro. Really what this means, Bill, Ford Tough really means something to our pro customers on the vehicle side. But what we're really seeing there is an obsession with long term powertrain durability. We're testing every every engine, 2 to 300,000 miles with transmissions, axles, everything. So those pro customers use their vehicles literally 90% of the day to they can not only be happy with 90 day quality but also 5 to 10 year quality. That's what it means for our pro

[Matt]

customers in the pro business. I'm really interested in the subscription growth that you've seen. Can you give us targets there? Are you looking at even stronger growth as that business grows?

[Jim Farley]

We are seeing quarter over quarter as you said, between 30 and 40% growth. The margins are over 80% on our gross margin side. Here's what people are buying, they're buying productivity. These vehicles, you know, they run their business. Plumbers, electricians, ambulance, police, you know, these customers, they use the data off the vehicles. They teach the drivers how to be easier on the brakes to accelerate, better not to go past the speed limit, you know, to do telematics and route the vehicles efficiently to their next job. All these productivity software tools that we offer customers allows them to reduce their cost and improve their uptime so their vehicle is never off the road. We're now able able to send them prognostics or predictive failure of vehicle components so that their vehicles are never off the road. They could do that predictive maintenance, you know, before a problem happens. And they absolutely love. We're approaching a million subscriptions now for

[Matt]

pro so and at a time when we see, you know, $800 billion of hyperscaler capex this year alone to build out US infrastructure, tell us what kind of opportunity this is for Ford and how much you're able to participate in that, in that data center build out.

[Jim Farley]

Well, I have to say in the old days we used to look at housing. Today what we look at is construction. The construction trades are booming. Super duty, transit, exportable power to the job site. This is what customers want. They want new vehicles that are efficient with software, but also what they want is storage batteries. We're now going to be one of the biggest domestic makers of energy storage batteries. Now we're scaling that plant we actually have two plants will have 20 gigawatt hours of energy storage and not only for sustainable grid and the grid reliance, but also hyperscalers there. They're going to use our battery electric storage batteries to run, to really run our country, help run our country. Between pro and best our energy storage business, we're very well positioned.

[Matt]

Have you got contracts with any of these big hyperscalers? Microsoft, Amazon, Google, Metta that you can tell us about, Jim?

[Jim Farley]

Yeah, good question. Well, we're in the middle of building out and converting these batteries from, from vehicle batteries to energy storage batteries, which are actually very different chemistry wise, format wise. Matt, to your point, we've had literally hundreds of customers now in the contracting phase. We announced one large one EDF and they've committed about 5 gigawatt hours over the course of several years now. And we're in the process of contracting many, many customers. It's a mixed mat. We see sustainable grid, you know, wind and solar. We also see hyperscalers building out. They want that 100% uptime on their facility. The Ford Batteries are really useful for that. So it's a mix of customers so far.

[Matt]

If, I mean since we're on Bloomberg, you're talking to every single investor on the planet so you can share financial information with us that's material. Is this the right time to boost your EBIT target for the year?

[Jim Farley]

Great question. Because we're right about, right about a quarter to earnings. I don't want to give a preview. I would love to, love to give everyone insight into where we're running. But I would say, you know, good solid progress at Ford in our base business but also our non vehicle business. We're just seeing growth across the board. Boy, I got to tell you, I love American consumers. They absolutely love our Ford trucks. So you know, on the sales side, you've seen two months of sales, very strong results so far. We got out of the escape business but still our sales are growing and actually I really believe June could be a breakthrough year month for, for Ford sales. So we'll see how it ends.

[Matt]

I have to say that I love watching Max Verstappen and it's been frustrating in some races but he's been incredible to watch. So I'm rooting for you and Hajar getting a podium was amazing. Can you confirm that they're going to drive for you next year as well?

[Jim Farley]

Well, Max has, I think Isaac, we're in good shape. Max does have a specific in his contract around, around the car being competitive. But I think, you know, he's world champion as you said Matt, he'll have the option to choose that what I'm most confident and it's a bit of a dilemma for us. But the FIA and the Formula one said that the Red Bull Ford powertrain was the most powerful powertrain in the paddock. Unfortunately, that doesn't allow us to make as many changes as our competitors who are behind us. But I am really proud of the four team that a brand new powertrain that all the competitors are struggling with that we at Ford were able to partner with Red Bull and give Max multiple world champion such a great powertrain. But we got to put the whole package together. We got a big race coming up this weekend and we're going to do everything we can to give Max world championship caliber powertrain power unit and then the rest of the team has to do the work. Boy, if we give it to Max, he will definitely deliver. How about some of those qualifying efforts this year? He is just amazing.

[Matt]

He is amazing. And you know I was with you in Le Mans last year when you announced you're coming back to the Hypersport class in 2027. Will you get Max behind the wheel of that car?

[Jim Farley]

Well, yeah, Max have been driving a Mercedes at the ring and you know, it sure would be great to see him in in a Ford. You know, look, we won four years in a row. We're the first American company win Le Mans. We're the only Ford American company that had a chassis, driver and an engine by an American company win Le Mans. We're still the only one and we're going next year to win. It would be great to have Max in the Ford hypercar. You know, I'm going to have to really put on my charm school act to get him in that car though.

[Matt]

I think you can do it, Jim. I think you're capable. You can pull that one off. If anybody can, it's you.

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