Ford CEO Mark Fields talks F-150 and more in Detroit

[MUSIC] Welcome back everybody. We are continuing our live coverage here at the North American International Auto Show, Detroit Auto Show colloquially. It's the Road Show stage, Ryan [UNKNOWN], our editor-in-chief Tim Stevens, and now being joined with one of our friends in the biz, Mark Fields, CEO of Ford, of course. Hey, Mark Always love being on with you guys. [CROSSTALK] You've got a lot of passion, you've got a lot of energy. That's what it's all about. So despite the fact that we're two weeks in a row here, we're going from [UNKNOWN] back to back. But we're hanging in there. We're all moving like a mob from CES to Detroit now. You didn't have any lack of news at the press conference today. Let's start with F-150, which had a lot of Very specific new innovations going on, including a diesel. Why is diesel so important? Well diesel is important because, our customers are using the F-150 as a tool. And when you look at diesel and you look at the capability, the low end torque those type of things, our customers were telling us, hey we'd love to have this. And we were listening to them. And that's allowed us to be the best selling truck for 40 years in a row, the best selling vehicle here in the US 35 years in a row. Here's a little tidbit, last year we sold an adversaries every 39th Seconds. So we really stay attuned to what the customer's asking. Probably about 20 by the end of this interview then. Right, we're already, we just sold one. This is profitable time for you, so [UNKNOWN]. Now the new app's been out what? Basically two years now, a year and change. Yes, yes. Why was the [UNKNOWN] not there originally? Give us a snapshot of how product roll outs work that that couldn't have been there right away. If the demand was [UNKNOWN] Yeah, well obviously we did an all new ground up F-150 a little over two years ago and as you've seen, every year we've added features and models, all right. Last year we added the rapture, we added the 10 speed, this year now we're adding the deasil going forward. So As you look at that, there's so much resources that you have engineering-wise and you wanna make sure that you get them focused on the base product. And then as the vehicle goes through its life cycle, you keep adding more feature, more content, more models that customer wants. And that allows you to stay in a leadership position. The eco boost and aluminum obviously were a higher priority to go to market with. Right. And to get people's heads wrapped around the fact that you don't need a big gas V8. That was as much as a breakthrough mentally as getting them used to aluminum structure, right? Well, if you look at our sales right now here in the United States, when you look at our ecoboost options, they represent a little over 60% of our sales. And so as we go forward, the naturally aspirated V6, The Va and now the DC will make the rest of that but our approach on the F150 that we were showing here today is very in sync and consistent with what we've done on the last number of years. Make it the toughest, smartest most capable F150 ever And our customers are agreeing with us, and that gives us a lot more motivation to do even more. And talking trucks, you guys did confirm that there will be a smaller truck, a Ranger, coming to the US market, something that a lot of people have been asking me about. When are we gonna get a smaller F-150? [LAUGH] We're tired of answering the question. [LAUGH] So thank you for- I've never gotten that question. Thank you for announcing it. [LAUGH] But we will load off us. A, we didn't see the truck let me just say that we're a little disappointed about that, but how will that impact F-150 sales? Is that going to be taking away from the success of the F-150, having this smaller presumably more affordable option? No we don't think so, there may be some customers who would have purchased an F-150 that are gonna purchase a Ranger, but when you look at our total Sales for trucks, I think that's gonna be very incremental because we've listened to our customers, and a number of our customers want a smaller truck. They want one more affordable, more maneuverable, functional, and of course built Ford tough. And that's why we're bringing the Ranger here in 2019. And listen, we got a lot of lawyer loaners And they were waiting because the last one that we built was in 2011. And we can't wait to get it into the marketplace to them. Now I know you can't give us any specific answers on the new Bronco, which talk about tapping into a passion, that's a cult. But can you tell us this? an you at least tell us have you locked The size of the thing yet. Or is that still a moving target? Well, we're in the process. As we said, we're gonna bring it to market in 2020. So, as you can imagine, we locked in some key assumptions around that vehicle. I mean, the first thing is as you look at that segment, that rugged segment of the SUV market, that's been one of the fastest growing over the last five year And so when you look at our history, as you said, there's a lot of love out there for Broncos. Just count the number of websites. Yeah. Advocate websites that are out there. And so you can expect that it will be about the size of a Ranger. It will be body on frame. And it won't be aluminum, it will be steel with probably some aluminum closures, those type of things. And the reason for that is cuz we want it to deliver what the Bronco is known for. Cuz keep in mind, we had the Bronco on the market for 30 years, from 1966 to 1996. So there's a lot of expectation that we live up to. Yeah, the Bronco meant a lot of things over those times. It was a much larger vehicle toward the end. It was incredibly small and almost square in its footprint when it was young. The first series, 66 [UNKNOWN] I think 69 or 71, it was a very [CROSSTALK] small [CROSSTALK] And it grew over time. But it'll be about the, think about it in the size of a ranger, in terms of the footprint. Okay, that's helpful. So we should also talk about tech because Yeah. We're all about tech here at Road Show. Yeah. There's been plenty of tech announcements both here in Detroit and also last week. Pretty significant autonomy announcements you've been saying 2021 and recommitting to that date. Mm-hm. We're seeing a more advanced sensor package, a little bit smaller, a little bit more discreet. Can you give us an update on where you are with your autonomy testing? And where we are in terms of progress of bringing those sensors to the price point that we can actually get them on a car that anybody can afford. Well, as you know, we're out there with our commitment, the intent to have a fully autonomous vehicle, a Level 4 vehicle, by 2021. And the reason I say Level 4, I strongly believe that the industry is throwing around the term autonomous very liberally and there's different levels. And level four is the level in which the passenger never has to take control of the vehicle. So in a predefined area that's been mapped, no brake pedal, no gas pedal, no steering wheel. And where we are in the process is we've showed at CES our next generation fusion hybrid autonomous vehicle research. Development vehicle, and it includes the latest lighter systems. A year ago at CES, I gave a keynote and I showed the puck version. The size A hockey talk that's now integrated into the vehicle from a styling standpoint much more integrated cameras, seven cameras that now much more greater ability to see through fog and rain and things of that nature but we'll have, we have 30 of those vehicles on the road this months. We're gonna triple it to 90 so we're on plan And as you know we're working on in the four elements of an autonomous vehicle. The sensors, you have the lighters, the cameras, the radars we're working in the algorithms for path planning, where the vehicle wants to go to. We're working on the computer vision and also the machine learning and then finally those 3D high definition maps. So let's talk about the cost of all the equipments. First of all the hardware I mean what's the point if the hardware is not a commodity It's very expensive, especially if you work down the miniaturization of it. I think the Google WAMO people are saying, they are gonna work on building their own sensors, just to drive cost down, not to become a vendor. Maybe as much as 90% they're envisioning fairly soon. Can you do that beauty to get in the sensor business, and if not Is there any kind of government incentive program that you're hoping will crop up the way has come up around electrification to subsidize the costs of early AVs? Well I don't think we're looking for subsidization from the government. I think what we're looking for from the government for is unified regulatory approaches, standard 50 state wide as opposed to individual state by state. And I give the Department of Transportation and Secretary Foxx a lot of credit because they've been very forward leaning on this because they see the societal, the environmental, and safety benefits of autonomous vehicles. But, as we go forward, we're working on all elements of the vehicle. Our first application of it will be in a commercial, kind of ride hailing or a ride sharing service. But the costs will be higher than obviously a non A.V. vehicle and also because of adoption rates. But you know we're really excited about the about where we're headed on this. Isn't there a reason or a rationale to subsidize autonomous vehicles? We believe in electrification. Why not go after what I think the auto industry agrees is already a better driver than most drivers. It has to go a long way for acceptance. Why wouldn't the government subsidize that? In discussions or understandings you have, has that ever come up or is that just a non starter? No, it hasn't come up. And part of the reason is when you think of autonomous vehicles and the first applications of it, as I said the first applications will most primarily be in a ride or sharing or ride hailing service. purpose. As opposed to let's say dual use for a private customer. Now, could you get to a point where they would subsidize that? Don't know. We would always be open to that. But at the same time, we want to make sure that this technology stands on it's own. And we'll have to see what happens. I'd like to make sure that The Governor's really focusing on that regulatory environment and also helping us with That would be enough of a subsidy to clear the path. Exactly. And a legal construct. Right? In terms of what is the legal Leave a construct of this. The vehicle has an accent or things of that nature. And how much is that [UNKNOWN] mess that you mentioned now slowing down or impacting your testing? You can't really drive now one EV in every state, at least not without making a lot of trips to the DMV. How much is that slowing you down or are you able to do enough of your testing in Michigan now and a few other states tha have regulations in place? Well the guys news as you said, we've been doing our testing in Michigan, which is a very forward leaning state. And they've just enacted, a couple of weeks ago, some new legislation which will enable it even more. We test in Arizona at our proving grounds. We're beginning to test in California So I think, to answer your question, it's not slowing us down. Great. And we're going very aggressively in making sure we get, not so much the miles wrapped up, miles are important, but what's even more important is scenario. That a car will encounter. Because you can go lots of miles on Route 80 and never encounter a scenario. You almost want to rack up challenge miles if you want to put it that way. They call them corner cases in the industry. Of course. That's where you know, some wild combination of People, cars, animals, you name it. All at once. Yeah. Yeah, Mike before we let you go, gotta ask, cuz we do every year, what are you driving these days? I drive an Explorer. An Explorer, [UNKNOWN] Mustang last time. I [UNKNOWN] A Cobra I think. And the good news is I get to drive a lot of different cars. The even better news is when you look at our lineup it really is a tremendous lineup these days. And And the best news is customers are voting. I mean we just wrapped up 2016 here. Obviously in the US, best year we've had in over a decade. Best selling brand. And again, wrapped up some really great sales awards for either our S Series or Lincoln etc. Congratulations. Great. Thanks a lot.