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Farley wants Ford to run like a Deere with commercial trucks

Reuters  /  September 8, 2020

DETROIT -- From the moment he was named COO and heir apparent to the top spot at Ford Motor Co. in February, Jim Farley has touted the growth potential of its commercial vehicles.

But it's not just more trucks and vans that Farley wants to sell. As Farley prepares to takes over as CEO on Oct. 1, he is betting Ford can transform its commercial vehicle business to generate recurring revenue through sales of services that take advantage of the software, data and connectivity in its F-Series pickup truck and Transit vans.

"Think of it as a second F-150," Farley told Reuters, referring to the U.S. automaker's lucrative full-size truck business that generates $50 billion in annual revenue. "We have the F-150 everyone loves. There's this other business out here that's huge."

"Think of the data being more powerful than the fuel economy of the vehicle," he added.

Automakers like Ford have talked for a long time about generating post-sale revenue from connected vehicles, but they have struggled to deliver. As a result, Ford has been abandoned by growth-oriented investors, despite its lucrative F-Series franchise.

Ford wants to show it can grow, and build a competitive moat around its commercial vehicle business before Tesla, several startups and larger technology players like Amazon enter those markets.

The U.S. market alone last year accounted for more than $58 billion in sales of commercial trucks and vans, everything from Class-1 regular pickups to Class-7 heavy-duty trucks like the Ford F-750.

New hire

Farley is counting on a new hire to help build data-generated revenue from Ford's commercial vehicle business: Alex Purdy, former head of agricultural equipment maker Deere & Co.'s Silicon Valley office.

At Deere, Purdy led efforts to deliver artificial intelligence on the farm through smart equipment and founded John Deere Labs to help build a "sticky" relationship with customers. Deere's aftermarket parts and services business accounted for about 15-20 percent of $35 billion in sales last year.

In his first interview since his May hiring to lead Ford's commercial vehicle connectivity business, Purdy said he "helped transition an industrial goods business that thought about metal bending into a service business."

Among the products developed by Deere while Purdy worked there were the ExactEmerge planter that offers improved seed spacing at higher speeds, freeing up workers for other jobs; and the See and Spray distribution system that will use smart cameras to distinguish between healthy and unhealthy crops, allowing for reduced use of herbicides when it's introduced next year.

Purdy, a 35-year-old former investment banker and consultant, grew up on a farm in Okotoks, outside Calgary, Canada, and describes himself as "passionate about smart connected vehicles, automotive, AI."

Truck leader

Ford is the leading commercial vehicle brand in the United States and Europe -- with shares of 40 percent and almost 15 percent respectively -- thanks to the F-Series trucks as well as its Transit vans.

"Ford is the 900-pound gorilla in the commercial business," said Rhett Ricart, a big Ford commercial vehicle dealer in Columbus, Ohio. "They've always had this competitive advantage."

Earlier this year, Ricart moved into a new 116,000-square-foot commercial truck facility that dwarfs the old 18,000-square-foot building, and said he looks forward to working with Ford as they roll out additional connected services.

Purdy and other Ford officials want Ford's commercial customers to regularly pay for services, creating a revenue stream that flows throughout the vehicle's life, beyond a one-time transaction every few years.

Ford officials talk about products as such geolocation services to optimize route planning and reduce gasoline usage, predictive products that allow for faster oil changes and fleet management operations.

Lower costs

"When you measure time as a commodity like money, there are lots of those kinds of experiences that customers are willing to pay for because they're in the productivity business," Farley said.

The goal for Ford is to lower the total cost of ownership for its commercial customers; raise productivity, such as increased package delivery; and reduce downtime for customer vehicles, said Ted Cannis, head of Ford's North American commercial vehicle business.

"So now the total addressable market, instead of being just new-vehicle sales is the entire process -- parts, service, accessories, connected services," he said.

Hans Schep, head of Ford's European commercial vehicle business, said the shift in focus is playing out in meetings on quality. Five years ago, those meetings were about how to reduce Ford's warranty costs, he said. Now, the discussions are about how to keep its customers' vehicles on the road.

Ford's push in commercial vehicles will work hand-in-hand with the push to electrify its vehicles, including the F-150 and Transit.

As part of the efforts, Ford and Volkswagen Group said in June they would make up to 8 million units of mid-sized pickup trucks and commercial vans over the lifecycle of the vehicles, starting in 2022. Farley believes the automakers' alliance will allow Ford to use their combined scale to build its European commercial vehicle business even more.

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45 minutes ago, kscarbel2 said:

 

I can't believe it- they actually screwed up and showed an early 80's F-600/700?

But they made up for that mistake by showing a 150 being loaded by a skid steer with gravel.  Heaven forebid that they at least show a 350 one ton dump being loaded.  Might convey the wrong message that Ford builds stuff beyond Lariats!

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9 hours ago, Red Horse said:

I can't believe it- they actually screwed up and showed an early 80's F-600/700?

But they made up for that mistake by showing a 150 being loaded by a skid steer with gravel.  Heaven forebid that they at least show a 350 one ton dump being loaded.  Might convey the wrong message that Ford builds stuff beyond Lariats!

 

Photo 5.jpg

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I always wondered that, too. Ford was always, and still is, big in the fire apparatus business. Why not showcase some of them in the recent ads about Ford commercial trucks. "C" models were everywhere back in the day and "Super Dutys" are today. I'm waiting to see the "F-600", that should be a popular fire apparatus chassis.

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2021 Ford Bronco Won't Ever Come with a V-8

Connor Hoffman, Car & Driver  /  September 14, 2020

Bronco chief engineer Eric Loeffler says Ford will never offer a V-8 in the new Bronco.

Loeffler claims that even if Ford wanted to put, for example, the 5.0-liter V-8 in the Bronco, emissions regulations wouldn't allow it. He says that Ford is also confident the Bronco's existing engine options will satisfy customers' needs.

Currently, the Bronco can be had with either a turbocharged 2.3-liter inline-four that's projected to produce 270 horsepower and 310 lb-ft of torque or an optional twin-turbocharged 2.7-liter V-6 that'll make 310 horsepower and 400 lb-ft of torque.

Separately, there are rumors of a more capable Bronco Raptor which, like the F-150 Raptor, could use a more powerful EcoBoost V-6, and Ford has confirmed that, as with the Wrangler, there will be a hybrid powertrain as well.

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3 hours ago, bulldogboy said:

I always wondered that, too. Ford was always, and still is, big in the fire apparatus business. Why not showcase some of them in the recent ads about Ford commercial trucks. "C" models were everywhere back in the day and "Super Dutys" are today. I'm waiting to see the "F-600", that should be a popular fire apparatus chassis.

Agree 100% on the F-600.  And at 22,000lbs vs 19,500 for 550, that translates  into another 300 gallons of water.  All of a sudden it is a much more capable "first responder" in the same size package.  In particular for MV accident response.

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2 hours ago, kscarbel2 said:

Loeffler claims that even if Ford wanted to put, for example, the 5.0-liter V-8 in the Bronco, emissions regulations wouldn't allow it. He says that Ford is also confident the Bronco's existing engine options will satisfy customers' needs.

 

But somehow Jeep has figured out a way to get the Hemi into a Wrangler......

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17 hours ago, Red Horse said:

I can't believe it- they actually screwed up and showed an early 80's F-600/700?

But they made up for that mistake by showing a 150 being loaded by a skid steer with gravel.  Heaven forebid that they at least show a 350 one ton dump being loaded.  Might convey the wrong message that Ford builds stuff beyond Lariats!

Must have been a mistake.  They took a chance loading the F-150 with gravel, remember what happened when those Chevy guys tried to load an F-150 with cinder blocks?

This is all kind of weird, Ford's commercial truck ads feature dolled up F-150's and the new CEO is focusing on subscription telemetrics rather than real commercial product.  I am not too sure how many fleets are going to be that interested.  Our fleet already collects a lot of that information through our mobile data terminals and it's our own equipment.    

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5 hours ago, RoadwayR said:

Must have been a mistake.  They took a chance loading the F-150 with gravel, remember what happened when those Chevy guys tried to load an F-150 with cinder blocks?

This is all kind of weird, Ford's commercial truck ads feature dolled up F-150's and the new CEO is focusing on subscription telemetrics rather than real commercial product.  I am not too sure how many fleets are going to be that interested.  Our fleet already collects a lot of that information through our mobile data terminals and it's our own equipment.    

Yeah but cinder blocks have square corners!  Wasn't the real killer the dumped tool boxes?  Either way hope Cheby didn't spend too much on those ads. If they did you can't prove it by the sales numbers.  And with all the "loominum" 150's on the road  how many complaints do we hear?

As for the telemetrics, all the more reason to be showing REAL commercial trucks-and in all classes.  But I hear you on your company experience.  I've been away from that stuff for so long but I guess their push is "why spend on aftermarket when we have it included"??  

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22 hours ago, Red Horse said:

Yeah but cinder blocks have square corners!  Wasn't the real killer the dumped tool boxes?  Either way hope Cheby didn't spend too much on those ads. If they did you can't prove it by the sales numbers.  And with all the "loominum" 150's on the road  how many complaints do we hear?

As for the telemetrics, all the more reason to be showing REAL commercial trucks-and in all classes.  But I hear you on your company experience.  I've been away from that stuff for so long but I guess their push is "why spend on aftermarket when we have it included"??  

Ford puts the optional bedliner in almost every truck now. They were having a lot of issues. The bedliner is a hard type liner but you'd think that'd negate the weight savings of the aluminum floor. GM uses aluminum on any panel that swings, tailgate, doors, etc. 

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5 hours ago, Dirtymilkman said:

Ford puts the optional bedliner in almost every truck now. They were having a lot of issues. The bedliner is a hard type liner but you'd think that'd negate the weight savings of the aluminum floor. GM uses aluminum on any panel that swings, tailgate, doors, etc. 

The new GM 2500 and 3500 HD's are all steel (I checked with magnets!) but you are right about the 1500's.  Every panel that moves is aluminum.  

Funny I was at the local Line-X shop last week.  They are located right across the street from a big Ford dealer.  Guy was telling me that particular dealership actually didn't order the 'factory' spray-in bed liners on their new trucks but instead steered their customers to him.  His Line-X jobs were much thicker and he did a better job prepping the surface of the bed for adhesion.  He said he also took the time to fill in any gaps between the bed sides and floors you sometimes see on the aluminum beds.      

 

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Ford to expand its largest factory to make electric pickup trucks

The Wall Street Journal  /  September 17, 2020

Ford Motor Co. is expanding its largest and oldest factory to make electric pickup trucks, a high-profile manufacturing investment in a key battleground state where jobs remain a focus on the campaign trail.

Ford will spend about $700 million to expand its River Rouge plant, adding 300 jobs at the sprawling, century-old complex a few miles from the company’s Dearborn, Michigan, headquarters, the company said Thursday.

By mid-2022, Ford will begin making battery-powered versions of the F-150 pickup, its flagship vehicle and major source of its bottom line.

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Somebody at Ford must read these forums. I posted on Monday that Ford should feature fire apparatus built on Ford chassis in it's commercials and, lo and behold, this morning on the national TV news there was a Ford truck ad featuring fire trucks and ambulances built on Super Duty chassis.

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4 hours ago, bulldogboy said:

Somebody at Ford must read these forums. I posted on Monday that Ford should feature fire apparatus built on Ford chassis in it's commercials and, lo and behold, this morning on the national TV news there was a Ford truck ad featuring fire trucks and ambulances built on Super Duty chassis.

Well good  news!  They announced today a new add campaign called "Built for America".  I  had that immediate thought about showing Ford fire trucks and PI's in some adds.  Hopefully will see some 650/750's too-if not FD, municipal trucks.....maybe cleaning up riot debris is Seattle?😎

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Ford says electric F-150 cost of operations will be nearly half of gasoline truck

Michael Martinez, Automotive News  /  September 18, 2020

DETROIT — Ford Motor Co. executives say the upcoming battery-electric F-150 will be cheaper to operate and more powerful than the current gasoline-powered pickup, addressing two common concerns around electric vehicle ownership two years ahead of its debut.

While the company wouldn't provide specific figures, Kumar Galhotra, Ford's president of the Americas and International Markets Group, said the lifetime cost of operations, which excludes the purchase price, of the electric F-150 will be roughly half that of the current-generation vehicle. The lower estimate is based off zero gas and oil usage, low electric charging rates, lower maintenance costs and increased vehicle uptime, Ford said.

In addition, Galhotra said the F-150 EV, due to start production in mid-2022, will boast the fastest 0-to-60-mph time and produce the most torque and horsepower in the nameplate's history. In the absence of an engine, Galhotra also promised a "giant" front trunk, which would mark the first time the F-150 offers significant enclosed storage space.

The new details are part of Ford's effort to position the F-150 EV as a purpose-built work vehicle that can provide numerous benefits to fleet operators as well as traditional retail customers. The automaker has long been the leader in the lucrative full-size pickup market but will face increased competition from EV makers Tesla, Rivian, Nikola and others in the coming years.

"While other electric pickups are competing for lifestyle customers, the all-electric F-150 was designed and engineered for hardworking customers that need a truck to do a job," Galhotra told reporters ahead of an event announcing a standalone assembly facility for the vehicle.

EV building

Ford said Thursday that it plans to invest $700 million on a 500,000-square-foot building under construction at the historic Rouge complex in suburban Detroit that includes the Dearborn Truck Plant. The automaker agreed to the investment in its 2019 contract with the UAW. As part of the project, Ford will hire 300 workers to support battery assembly and production of the F-150 hybrid and EV.

Ford says the facility is scheduled to be completed next summer. Gary Johnson, Ford's chief manufacturing and labor affairs officer, said it would be the company's "most technologically advanced plant in the world."

Johnson declined to say what the site's annual production capacity would be. He said F-150 EVs would go through the same paint and body shops as the gas-powered models before moving to the new building.

Galhotra promised the F-150 EV would look "distinct" from the gas-powered model but did not provide specifics.

Ford has said for years that it planned to build electrified versions of the F-150 in Dearborn. Bloomberg last month reported Ford's plans to use a standalone facility within the Rouge.

New ad campaign

As part of the Thursday announcement, Ford officially kicked off production of the redesigned 2021 F-150 and launched a new "Built for America" ad campaign touting the company's contributions to the country.

The TV spots highlight the fact that Ford employs more workers and builds more vehicles in the U.S. than any other automaker — facts it has been quick to point out amid calls by the Trump administration for more manufacturing investment within the country. The spots were produced by agency Wieden and Kennedy, which Ford first brought on for creative work in 2018 and used for its "Built Ford Proud" campaign.

The automaker also released new details from a Boston Consulting Group study it commissioned about the economic impact of its F-Series pickup line.

According to the study, the F-Series generated $42 billion in revenue in 2019, more than McDonald's, Coca-Cola, Nike and John Deere. That's 27 percent of Ford's total revenue last year.

The F-Series is the most popular vehicle line in 39 states and accounts for 6.6 percent — 16.6 million — of all vehicles currently on the road in the U.S.

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