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Yeah, I want to welcome our Bloomberg Television and Bloomberg Radio audiences to Michigan Central Station here in Detroit. I'm sitting down with Jim Farley, the CEO of Ford, as well as Laurent Meckis, who runs the Red Bull Racing team.
It's a pleasure, gentlemen.
I'm very excited as a fan of the brand and the league. And let me start Laurent with you, because you've said that this is the steepest hill f one has ever had to climb. New regulations this year are sweeping. It's not just a tweak here and there. And you're starting with the brand new partner with Ford, who is going to build the engine with you as a collaboration. Why choose Ford as a partner?
You know, first, you're right, you know it's the biggest regulation pope in the Heast twel one, at least in the modern heastorield phone on one. It's also on that very same year that we chose the let me say crazy challenge to to go and build our mpoion it and if you.
Do that, you want to part with the best.
And we are in a lucky positions where we we have managed to strike these strategic technical partnership with Ford in this crazy advantage of building from absolutely zero our own POI in.
It, and we go together and these in these new regulations.
Jim, for you, this must be exciting because you've built honestly a new legacy for Ford in terms of racing. I mean, on the one hand, you've got the new industrialized America here. On the other hand, you're going back to Lamont with a hypercar in a couple of years.
You're essentially doing DFV two point zero.
Right, This is like the cause worth of old.
Why do you when you're talking to Bill Ford, when you're talking to shareholders, how do you justify this, this spend and this you know drive to go racing?
Well, a couple of things.
First of all, the tech transfer, this sport that Laurent leads, this team that Laurent leads, you know, leader and aerodynamics, predictive failure components and software control of the hybrid system, high dis charge batteries. These are all core capabilities that we need for the next five to ten years as a company. So the tech transfer is very relevant for us. Like maybe four valves or overhead cams were in the sixties, you know, but the tech transfer is totally different today.
Formula one is a complete digital sport and that's where we're going as a company.
Number one. Number two is, you know, racing, especially in the.
Off roll world, gives us credibility for customers that the product they buy has real capability that's been tested in a way that a brand who doesn't race can't say. And that's what portion Ferrari knew for a long time. Especially for us in the off.
Road world, this is really important.
Racing is a fundamental part of our company's business because to beat all the great off road brands and to establish ourselves now we're two ex cheep sales in the US, to keep that going and keep growing the off road brand, off road racing into car Baha is where our customers will say, hey, that forward has the real deal.
It's the real deal, it's not a poser product.
So racing is integral into our credibility as a company.
And you've obviously got a deep, rich history there and you're bringing your software and battery technology those capabilities to red Bull racing. But for you, Laurn, this is a whole new thing right building the engine. I know you're getting a lot of help from Florida. What are they helping you with on the fuel side?
That helping us on many different topics, and at least the Flipp's easy is expanding every day.
But let me give you a couple of practical examples.
Gym's team have unique advanced manufacturing capabilities that we use to produce some of the most critical parts of our engine. And not only the able to manufacture this pass for us, but also they do it in less time than we will do otherwise, and that gives us a crucial You know, our businesses is the time to market business. We could
it a time to raise business. And when we're able to manufacture complex components in a short amount of time at this incredible level of quality that we are looking for, that's a key competit competitive advantage, especially.
Since I think you've said you gave up some time focused on last year's car, so you're in a hurry to make sure that this year, this new car, when Max gets in it in Bahrain right, that it's a winner and not a learning moment. How do you make sure that you're winning straight out.
Of the game. You know you will have to be with us a little bit. The sky scale of the challenge is monumental.
We are starting, we have started to design and build these engines in what was a field.
You know.
We we've made the factory, We've bought the dino, We've We've put together an unbelievable group of people and group of partners such as GIM.
And Tys team.
And it will be foolish a knife to think that from the first day you are going to be at the same level than people that have been doing it for nine years.
So bear with us.
It will It will give us a few sleepless nights, it will give us a few heads. We feel we have the right people, the right tools, the right spirit across what red Bull means and what Ford means. Will eventually come out off top, but the first few months will certainly be full of learnings.
Jim, what can you bring back from this I guess laboratory if you will, to the forward customer here in America, because yesterday we saw figures from the Bureau of Labor and Statistics that showed prices for the average passenger car not forward. But you know, across the industry are up more than five hundred dollars. Prices for the average truck across the industry are up more than one thousand dollars.
What can you bring back.
That you know puts value into those price.
Increases, Well, Matt, I think Lauren said it really well. If there was an initial premise of what those transfer technologies would be to help the company. But what we're learning working with him over the last several years is actually that list is growing and it's more diverse than we thought. Of course, we thought it was arrow and high discharge batteries.
For performance hybrids.
Well, now it turns out performance hybrids are really important for the company. Twenty f one fifty is now hybrid sales. People are buying it because of pro power on board, not just because of efficiency. And every day, honestly, the list of things that we can take from the effort with or on his team, because the sport is so hard and the time pressure is so high, that list
is getting longer every day. I could give you a long list, and most of the value that we're seeing on the tech transfer side are things that we didn't even have on the list when we started four years ago. It's a long list but I would say that the real signature is for me is really the software, the control software for the hybrid system predictive failure components. These are the essence of the new software defined vehicle globally
to beat China, and they are really good. We need these capabilities from Formula one and we can put them right into transit van. He can help us with the language models and the logic of predictive failure for a component on a Formula one race, where you can use that same know how hopefully to help our customers in a transit know that something's going to break way before it breaks.
And that's the same capability he has to deliver Firmax.
This is really the cool part of Formula one. It is such a high pressure, high tech sport that actually the list of value, like lubrication, it's just gonna.
Keep getting longer.
Laurent the President of the United States, was with Jim a couple of days ago here touring their plants. As the US turns more inward, it's interesting that you're participating in this sort of global sport, right. We just learned of new visa restrictions on people from many nations, including Brazil, do you find it harder to get people in to Miami, to Las Vegas to Austin. I know there have been problems already holding up gear at the border.
Really, you know, it's not an issue today.
We are global spot as you have said, we are enjoying racing in pretty much every part of the world, on nearly every part of the world.
We have incredible.
Logistic capabilities, which is also some things that we have brunstorming and exchanging with with with Jim and his steam and and these teams together with the help of Formula one, makes it very, very smooth to go wrong. And we were back to back races from the US to the opposite side of the globe without without any issue. So you know, uh, it's it's a privilege of the sports have as a global sport to be able to move around very freely.
Jim, how are your discussions with President Trump? I know that you have pointed out in the past that the tariffs as they're set up now, as they're designed to put you at a disadvantage to somebody, even an American auto manufacturer that produces in South.
Korea or Japan.
For sure, I know you're going to meet with jameson Greer tomorrow in the great state of Ohio.
Have you had a chance to talking to the President.
Have you made any progress in getting many carve.
Outs or really encouraged.
I mean, look, Ford is the most American car company. We produce the most, most hourly workers, we export the most, and so the administration has been great to work with. They always answer the phone. But there is a long list of things we got to work through. I think we've made progress on mitigating some of the tariffs, but we have more work to do. For US, we have a high exposure aluminum, for example. The EPA changes are really welcome, frankly, and we're seeing that play out really
in our business. Part of the reasons why our valuation is increasing is because people understand we can build more profitable vehicles now and that's more employment in the US.
But there's a long list.
We got the USMCA coming up, very important negotiation for Ford.
We need to change USMCA. But we built our entire vehicle.
Business as an industry between Canada and Mexico and the US.
We have to get this revised, but it will be very important.
I think continue to work with administration tariffs, How we handle the China. You know, if you look at what's happening in Europe right now in the UK, the Chinese are now quickly almost ten percent of the marketplace, and electric cars even higher. They pose a lot of threat to labor locally. They have huge subsidies from the government that they're exporting. As a country, we need to decide how what is a fair playing field from a cost
how do we handle you know, these vehicles. If we're scared of a balloon, you can imagine a car with ten cameras that can drive itself. You know, these are incredibly sophisticated technologies, and when we deploy that in China, it has to be approved by their defense department because you know, those vehicles can be guided into all sorts of things.
Well, we need the same. You know.
We have a good starting point for that philosophy of the ITC of the vehicle, the digital footprint. Now we have to, you know, make sense of that for the China threat. I know that the President talked about that during his visit at the Economic Club.
How do we handle Chinese cars? Now? His personal opinion was we should let them into the US.
But but maybe you know, I think we need to work through that as a as a company and as as a country. I think there's always a lot of big topics for the car industry because it's so important for our for our country.
Well, we'll be covering all of those here uh in Detroit with you Jim and you Laurent. Thank you so much for joining us.