Ford Motor (F) 26 Oct 172017 Q3 Earnings call transcript

Company Profile

Participants

Lynn Antipas Tyson	Ford Motor Co.
James P. Hackett	Ford Motor Co.
Robert L. Shanks	Ford Motor Co.
David Tamberrino	Goldman Sachs & Co. LLC
Ryan Brinkman	JPMorgan Securities LLC
Adam Michael Jonas	Morgan Stanley & Co. LLC
Rod Lache	Deutsche Bank Securities, Inc.
John Murphy	Bank of America-Merrill Lynch
Colin Langan	UBS Securities LLC
Brian A. Johnson	Barclays Capital, Inc.
Joseph Spak	RBC Capital Markets LLC
George Galliers	Evercore ISI
Emmanuel Rosner	Guggenheim Securities LLC
James J. Albertine	Consumer Edge Research LLC
Itay Michaeli	Citigroup Global Markets, Inc.
David Whiston	Morningstar, Inc. (Research)
Jim Henry	Automotive News

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Dorothy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ford Motor Company Fiscal 2017 Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank like of conference Motor Investor now Tyson, Lynn Company. turn Director Executive Relations to would over the Antipas I for Ford Please go ahead.

Lynn Antipas Tyson

Motor provide Financial Hackett, our Good everyone, and brief CEO, earnings Dorothy. and review and Shanks, President detail. will highlights Presenting Company's our our strategy begin Bob Ford on a operating with Chief to the Note review. results of Jim then touch will you, XXXX performance Jim third are for Thank review today Bob of and time more quarter quarterly in that Officer. will Q&A, you more day and to welcome, with the Bob quarter. the just

web with for Bob's closing Marion and call Vice K.R. deck. Kent, open President the reference, remarks. few And are Director have Also Accounting; questions. Vice we'll Corporate After Andonian, level here John your For CFO. Lawler, kept Controller; the Ford Paul Credit's the of and us President section, up we've today, Q&A, same Treasurer; a Jim following will Harris, and in of detail

in and may found of be in about Global our the And Our November Appendix Conference deck, will some XX, Conference be President statements for Executive our November unless Goldman otherwise. today in our President Barclays references. measure These XX, York. Vice to on included expectations Mobility, President Sachs Investor comparisons at Marcy and Operations, performance. upcoming Industrial results at Relations includes of reconciled the along Vice all in year-over-year and be activities most Klevorn, Hinrichs, shareholder.ford.com. presentation. factors will U.S. noted vary are the are at GAAP which of Automotive President results of discussed our to Global our on Boston. New can with the earnings materials non-GAAP earnings Also, discussion forward-looking Executive some Actual Joe comparable are include the the rest most Today's significant future Relative

to turn the me Jim. call Now, let over

James P. Hackett

Lynn. Head at thank you. Motor to welcome Lynn, your to Relations lucky Company. Investors have call We're as Well, Ford you, And, first of

Lynn Antipas Tyson

Thank you.

James P. Hackett

I And the to and good the winning many aspiration opportunity October with meet lay X, day everyone Ford you the Motor of out phone. had On on our to for Company.

to a is time not have marrying over that it verbatim the to I'm for commitment that Now, of brand and the owning of the going cars that passion transforming our read spirit the we to in our people with great but are creating trucks it has trust business it here, earned future. with and win

embracing concepts fully as and intersection smart brought independently our vehicles rather to theme smart an are with to be vehicles. discussions development in And working describe our the capabilities won't interacting in in computing be strategy on often powerful isolation, return And a world. they'll We of intelligent smart about by in vehicles ability this the We company. world. our evolution I these future an will

historically well clear that have optimistic what done future. toward to means this us, a we as leverage For we've we move path this

what in two provides we bridging we're our clear customers a what way is satisfies be. to approach and know for our future Now, And with roadmap link the imagine the investors. to that we now a

future. win in our fundamentally to that's about we to And this commitment deep you redesigning we've in embraced quarter The revenue we're where the results to that term, told reallocating that our was company demonstrate costs I our longer-term first effort, operations, in priority also the and reset more capital near and making the attack can fit. the

fitness here on our of plan. heart see our is As from really the framework, you slide can three, at

I evidence reaffirm just as Now looking you evolving. And that here. on know update I of we will want future calls, milestones to key I for are on you're how specifics

solid connected number I'm pleased turn team and of innovating We're work the four, to efforts proud this we of effectively. And services. a decisions solutions. and a deliver decisions human-centered make plans our is continuously to you the We've reduced already smart, to in slide introduce have with made the vein. team and to vehicles accelerated empowered quarter. mobility results most create that together costs to We've and XXXX of significantly If we achieved

We that I Bob. say, products the highlights business. it the As few I mention turn and F-XXX. new let Well, launched around me before to our world, we're committed compete transforming you And can I over to a from to as new win. successfully assure just quarter the such

knew already transaction that prices. reaffirm delivering it's to but higher that, You already about I want

also saw America, over North an X%. margin performance with operating We by good

and We with partners another We These collaborations goods both launched we Financial using also AV us third with markets future. the on to forward. about and ask India work profit quarter the in our us. I Well, markets. that a vehicles important we are to want hand clearly our Credit. and improve move build of we're ahead in And with often. call our have result results this potential to Shanks. Bob critical as on in a technology But move going Asia-Pacific strong this business you of work in now, Ford agreements is I'd record saw and Bob? the we reached solid Chief Officer, China help in Dominos advanced to Lyft that can a at over autonomous like today can because people lot our those We quarter, and smile

Robert L. Shanks

Thanks, morning. go few perspective before with to don't that remarks had to a you missed to this earlier Q&A, Instead, Jim. that haven't share through plan going I go through on provide you the material mentioned I'm today. chance if might as to highlights quarter's that we filed our slides going key along earlier, facts have any the yet Lynn Well, a

balanced solid flow. cash profitability said, Jim in delivered we results more growth, as year-over-year So and quarter improvements with a including

highlights. few a provide me Let

First, gains Automotive our our a billion adjusted was and profit Services was pre-tax our ago $X.X Financial was both year driven that up in (X:XX). and segments. XX% That company from by

Now, was due saw lower are favorable we to was but that than mainly XX%, by profit also higher million of market within cost, factors our explained which up pricing. more saw $X.X segment, we and Automotive net that

was was performance up Our through $XXX of which points, where and cost which by automotive The profit commodity of $XXX X%. over operating million. million. we over performance our $XXX Within Automotive, year-over-year over up margin points. gain was $XXX margin was earned cost of million inclusive North X.X% that we up cost $X.X That this and driven increases America, of XX%. X.X was the solid X.X achieved at was despite commodity was billion, The operating increases achieved favorable was about million of

addition, Navigator, Expedition the results were last any which By we fact, with In all XX,XXX less products the new in wholesaled those of X,XXX about product. and in launch. in And, didn't of achieved these the product; year. than comparison, for we were high-margin wholesales wholesale quarter the old were third

did profit and, year-over-year America, record operating This Like and that operations America million, were than cost a X.X improvement $XXX Now, up outside about outside breakeven. included North in performance driven China, an particular, Automotive what profit segment, was margin India. I'd Asia-Pacific more last in by in of we quarter also the doubling drove favorable the was third results gain. North with year, points. which Australia X.X%, the of note of

higher was XXXX. saw On the This costs effects. the commodity loss first hand, of quarter but Europe of the by which we other first in with million, by $XX effects explained Fiesta a nearly since loss Brexit our affected along was also launch completely

expect drive the the year. to quarter and, return fourth volume will profitability We the to in to in profitability. return course, Higher of for full Europe

be in We higher quarter expect to the than and than the fourth the XXXX. it of in units XXX,XXX quarter production quarter fourth in was Europe XX,XXX higher third units

Credit Finally, another X%. quarter, the improvement. strong residual earning performance turned $XXX was Favorable in drove mix with profit up million, and which lease along volume Ford

the made origination, collections servicing disciplined to also FICO and parent its continued and distribution Scores a practices strong, our and Credit totaling $XXX Ford to remained million. in consistent. quarter be

we for noted, three-year had expect down at result, average now be XXXX to As values to expected, and, continue values on from we auction constant mix. higher XXXX than X% we see full-year about auction a as

both The operating $X.X $X.XX. in X%. and be the from tax which and recall, an rate results to and in of billion the $X.XX, you'll income first quarters, As up second to Credit about net to decline coupled we contributed adjusted of Ford a that adjusted increase Automotive operating was expected XX% EPS XX.X% an with

payables. year along and due flow Automotive billion, Our improvement to with The was from which $X.X timing ago. negative a an differences operating other capital, negative results working mainly were cash unfavorable was

our is to flow than cash expect year, guidance. prior for full which to positive continue with XXXX, lower the We be although consistent

billion balance $XX Our and $XX and investment grade remains and over strong sheet liquidity cash ended at billion. we with

So, be with Credit half in which is performance unchanged before of tightening we're to and to our to this, at guidance prior initiatives, XX%, traction rate tax above within is tax from a ability we're our confident range our of the previous fact, fully in today on cost And, improvement $X.XX that deliver against in guidance. operating to we're $X The raising the target for our guidance. remains billion. upper effective prior adjusted about profit Ford the guidance. which And, $X.XX,

to for Ford our and good, down a fitness. improve on us, for efforts overall overall, quarter a So our high-quality payment

with back So, us that, Q&A like on turn session. it get started our to the Operator? will who to I'd operator,

Operator

David from the comes question first Your line Sachs. Goldman with Tamberrino of

David Tamberrino

and morning, questions our Good thanks here. Great. for taking

follow-up just first Let me the Ford Credit. Motor on

from down you're for thinking You're X%. X% Curious to taking down to values auction next your about year. what

fourth demand. the moving values the for where again, for I vehicles and some wondering recovery-related view is the residual XXXX of XXXX what we from still auto ecosystems off-lease have quarter coming But en think masse. and, back into your improved hurricane

Robert L. Shanks

think texture maybe I away one. guidance general can, in take And to We're XXXX, but David. to it's Thanks, and for And that give just me going color. first. that question. some, we think I stay we and comment your let we'll where from some can response I'll provide appropriate a do

we've seen year we So, much performance what this than had clearly, expected. better

are auction as we them We new we low will be as quite previously. values to writing what be that say I an that still not expect thought assumption on But had contracts have to lower.

with moving improved to values has outlook our forward. So auction regard

David Tamberrino

from perspective. good lapping Jim, some pretty the then, does see a were is headwinds Fourth perspective? manufacturing And last increase? year standpoint a being And think you've from need looks seen that that from you're a Do appropriate, year a quarter it. company and that one-time earlier. like some quarter you headwinds execution field an more these has level materials. expense announced the year? this of warranty Got last the Obviously you'll that you done were Okay. is lot in now actions accrual booking from far address or so passed service to What that to warranty warranty

James P. Hackett

it Well, that like show I looks the company, a I'm you but performance. improvements words, want happy them there's I with in through tell in financial parsing quarter, to in I'm the And seeing scanning not because definite hinted about But is one. I'm the things quarter my days good up the really XXX-plus it underneath. comments.

call what clarity For of [pf] who (XX:XX). we terms role example, view of points owns our in decision-making,

linked You'll design the the and procurement Hinrichs it shift organizational the of group. we've Joe quality the would development And make that system FCSD product. that execution our manufacturing with linked the that product our with established relative with with recall we've under was and in more organization connected to premise with

something sitting to quality So, any not perspective. from go over there's a a news cliff about that I'm on

we're So I'm optimistic improvements. those show that that going are making the changes to

David Tamberrino

share. more them about opportunity to market Do think couple just years you year, into the next you retail your think about to one There the was XXXX went a one push going and And as well. as real F-XXX where opportunity as pickup is for of a and we're share? last market through ago, an your me take backdrop competitors refresh. I take A large for Understood. is, through good truck competitor headed are the really

James P. Hackett

giving of one that gifts it's keeps for us. those on Well,

And the so part question. you answered of

increase F-XXX face kind transaction you the prices activity competitive in the So, of that referenced. we witnessed of

extremely doing So we we we're good a had think in Duty is counted on position. and really The well, that. Super

we're so with And that happy very franchise.

David Tamberrino

taking Thanks Okay. our questions. for

Operator

of with from comes line question Brinkman next Ryan Your JPMorgan. the

Ryan Brinkman

Thanks morning. my for Good Hi. taking questions.

the range. first question about guidance is just The

large. be but $X.X half So, just pre-tax prior, the it EPS narrowed little $X.X a backing billion range. implied a I more total company range profit guide, the significantly appreciate still it's to to from that's from $XXX back million $XXX the seems into million billion like in or

if thinking curious the you that toward the that just you that might of more I'm What high to potentially low guidance? the are can about share are So, of factors track cause why range. range the you ends swing or

Robert L. Shanks

we in that, the Yeah, what year. have recalls. what terms all provide around degree from question I'll the when around and What this in to time we history had the back do And, over take that at one, business to Ryan. We around of we just could parts look moved of It go of point place. be be wholesales, be a could it it frankly, the end it's could on that. and production,

guess see is up be we're that with balance as variable of But marketing. now right front that we – what Although one effects. think of around everything It sheet we in could that aware is well, picked recently. particularly another X-K us we we I we have exchange issued

think We of although have I coming those. underway, out we're launches

So, feel I we think pretty comfortable.

see we're going feel the try our quarter very one or comfortable the But to what But based coming feel we're we we that with good way we guidance. of that's working been. certainly either about provide results. don't swing confident strongest say, can We deliver to possible the I the we're it. to the suggests very result that I on other. and obviously, And anything that experience range So, third off can has just

Ryan Brinkman

you're of the know, cetera, at newer differently what just your with share to strategically in had certain anything success still you given I all about don't America. at is they And material. you're track cycle point materially when Great. is low but a Thanks. the maybe are losses I'm a the question some years the there just losses, do term and markets another larger Hyundai competitors thinking region given But on maybe the then on appreciate a in of market some curious long the in magnitude I with like an return than XXXXs, from of they year return. Thank maybe the or profit relative last just ago, of make entrants even if like me that recent et to Brazil, incurred and in sure, Volkswagen profit they're South were lower a The to you. need the to volumes the with to, maybe you'd selectively that. or like, market, automaker, in exit and like alliance any slower pretty

James P. Hackett

investment, talked us you from real you warrant and I that issues are Ryan. Well, just the XXX attention, there days, address that you And working we've about, conceptualize the nature warrant the of ways to public October pile In of world, laid some the specifics are about, about Then markets, talking nature implications another that talked coming what when relationships, in I that out. the in want that we've want of a in like progress things lot nature discussions the in questions today, I I the to about XXX of And the are that the just thanks, the story from made detail the put get to in these that. couple where X strategy number of about vehicle history. you're days a attention of of would smart nature are imagine things a understand we're the hard of and that areas. then And smart strategy. the really there of to in

one I'm the I I unanswered all not don't want heap pile same want anything I a of these position – in you and view to term pile. the to questions what confirm with inside announcing us But in where, grips that So, to believe, use company I have we're And just coming same. is point will the today. and on is direction a that from of

Ryan Brinkman

Great. Thank you.

Operator

line Your next Stanley. of question the from Morgan Jonas Adam with comes

Adam Michael Jonas

Good Hi. morning, everybody.

question. Does a Ford need restructuring? First

James P. Hackett

you a to need I What way, Adam. by that that? mean you ask do second

Adam Michael Jonas

changes least, be management actions, when restructuring of the strategy, head anything organization precedence at in of changes of term, need lot Ford et like a big write-downs, have there's that? fitness, cetera. it you when quite this count you long reassess fundamental of Sometimes Does pivots in adjustments, big asset the and direction industry

James P. Hackett

October cost about Well, are tracks work better assigned. I itself that two in streams we've we've bottoms what about in earlier. gave revenue That I think you diagram on XXXX One in the work that And of I'd are Ford sensitive. I've It's time or stand position you, two with working different the excited which really Very seen and getting business things, the up. that's future. that comments streams top-left this a the XXXX the created been operations. redesigning and undertaken is attacked and different of what kind is that near-term is period, has we the in coming six showing is

on plan area itself. the reporting that as to I you present so, And news in starts to

Adam Michael Jonas

Great.

Robert L. Shanks

can I just before, if question. going another Adam, if add to

Adam Michael Jonas

Yes.

Robert L. Shanks

read I your commentary... So, thoughtful

Adam Michael Jonas

Thank you.

Robert L. Shanks

...around restructuring.

that do would talked I and change material reset addition specific so about who $X means in do business. when billion New we of fitness of think substantial Jim we think Redesign or cost York, the what related I $XX and billion say, Jim So, reductions forth. to a with the it to But paradigm the we nothing to said, the do to in you the redesign. what the How and engineering.

will what we've business I achieve. objectives in the think out that and as restructure XXXX, since to the we've required So, we said that bucket achieve consistent aggressively with to set

to and to New York. we those prepared always what have we're talked But to specific we in two open certainly about do and related nothing do. nothing So, improvements big

Adam Michael Jonas

Bob. you, Thank

Smart both against you separate, a company? and potentially carve-out Can traded it LLC are Just from sides? a follow-up. of for or Ford a publicly argue What into arguments Mobility the separation

James P. Hackett

I that see that day you the you could when to growth have that is ask the our business think biggest question. such that advantage segment of one I want of

that to we've its implication so good isn't things promise scale had it and it's And it's on really deliver yet. has yet where things that started of one the lot at there, of but of kind the got any a it

Adam Michael Jonas

Okay. If in one can I just sneak more.

Your hard. raise don't you in There's have bonds to capital to. either you a rallied saying when want business, have

environment time to want uncertainty you. don't to. you You final particularly to of That's safety opportunity Thank a at my insure force have the when a good to it a majeure, against this change? Is sock-in economic some margin question. do of strategic around

Robert L. Shanks

that. did billion we out felt, We took time. point, of were strategic part the we take beyond see do Relatively the and recently, good purposes. need don't we no, thought actually for holding going moment to we the loan that. that, It's up your rates a Well, to be to balance we're nearly at the use was we cash could $X because of I that now, that a and thought going sheet right intend that. But to

Adam Michael Jonas

Thank you.

Operator

of next Lache from comes line the Your Bank. Deutsche Rod with question

Rod Lache

here. Oh, man. They gave clarification question. and us some want I a a limitations

Robert L. Shanks

still love Rod. you, Well, we

it works. can put paragraph, of one in that all you If maybe

Rod Lache

to part your clarification your rate, I the by is tax it your you tax hundred just a like rate, guidance at just by dividing guidance will keep new the try few raised by But simple. dollars. it million looking divided looks like

versus now is guidance billion than Services $X $X.X Financial the Your greater previously. billion

So Financial guidance just Services is change improvement clarify, to the outlook? in basically the the

Robert L. Shanks

It's be quite be the better Services But declaring as look of had we're we a expected, at But we're expected same, Ford had rate tax I good Automotive. Financial point we're end the as what year noted. we'll had we for moving company Credit, course and now up in if what the think the the overall, going I versus we're you where in not doing the towards at than where to actually. is – of over delivering been Well, that.

Rod Lache

the And texture. would things? whatever you should is I'm And launch picture should that a you're some you significant big positives. know us give be costs, to the I a you about XXXX, driver of was warranty. so and is increase some that, cost provide But just brackets to back next should to Okay. guidance thinking? side, around those and we cost about. launch. on Super able be content think Duty for increase, key There of then talk there some mitigated you're Expedition performance brackets costs. things thinking How what year? I some going Obviously, about that And on of can some be for in had America, any thinking did be for volume not around North we the giving got big a but thinking texture big can you've the achieve Navigator you potential the non-recurrence we

Robert L. Shanks

that we prices as I conversation at the points the take forward move fitness, at providing than have I year. in say through the I'll and focus we other around ahead say we more look to curves. year, think that, see going the you've we up evidence so the as still seen to on still when that we of that proof costs obviously quarter, a see, on next on pass to the we'll commodity moment that look be the

that look have mitigate as next So, at to something that is we'll year. we

Europe world. And, the then next will so We wholesale strong in in significant And around course, volume case be launches that year I got that there's note something have of really be year we've a product, going I Europe. elsewhere. new for XX% mentioned like Europe, some launches Credit. of would of we the the to Ford

James P. Hackett

a Rod, ready the Expedition, go. are And Everything's good I add, would Navigator roll. launches to that there,

confirming just that So, the plan. that's still

Rod Lache

that often in significant you've very positives new offset products the transaction of been so from get that When prices some increases those have costs forth. and in there's you launched the past,

cost is structure, you charges non-recurrence of of year. last that had your And the terms so seeing some far, we're in what of it

some you're significant structure a on go-forward whether basis? just to get progress actually of I'm So, the terms in trying a sense cost of seeing

Robert L. Shanks

just look let's well, Yeah, the quarter. at

sales About million So, is of or that $XXX $XXX about engineering, advertising million million, promotion. cost commodities. $XXX material is $XXX million so excluding is

the we me, did of factors, level that would quarter. But more towards this about normal back performance, think I to have ongoing of the means those we're is that majority that's a non-repeat and cost recall. how the So

terms This is high quarter, at. look of anything really that not being in really there as or bad, I unusual, quality mentioned good earlier, I

doubt. basis, there and good both the other on good a I And going think tougher, really and we not far. big to of performance launch we've so very, as recognizing as the off next got necessarily October, to can't view got some which event. And about not a And is was this that's bad. a come always it Ryan – probably we've start. business if which getting a some that of early I thing, the in is back seeing once forget I is But effects well, to that holding let's already to David a And then very strong we've prices year no run-rate Mustang just look are it, seeing up – want expected, question, that course, started but coming is back Duty good what we're are we Super remember transaction I thought, asked we it or new lapping that launched F-XXX well. a as I in new too,

good us as help So, we've I ahead things into going year. next that are move got to think we some

Rod Lache

Great.

Okay. you. Thank

Operator

Lynch. Murphy of next the Your line question America Bank from John with Merrill of comes

John Murphy

try question I'll limit as to one myself and a well. morning. clarification Good to

Motor mean just vehicle really pricing, But, can basis down come you derivative a real you X% the benefit I vehicle or down new on residuals if better to of is, what helps that on a for how first because curious vehicle for resids X% going in the means quarter the wonder if mean for a Ford auctions Bob, pricing from about saw lot can that's at The pricing. talk question, that question realization should versus what on I'm expect Credit. I that first understand new new forward. just you really in

Robert L. Shanks

terms new we've something and between isn't all thereof is or of talked a happening this values lack about vehicle pressure the with prices. it? in auction that what's relationship is There Well,

that precipitous So about the I vehicle we we're the better you make is prices thought, be that we think forward. not in for about I terms think new should of a it, the as us that way to would it going think that to seeing to encourage it do decline fact bit easier as

John Murphy

Okay. And vehicle new the was as side? far that quarter in as pricing a factor on the

Robert L. Shanks

I hasn't has thought been that I can't as what probably in the earlier had as bad been that the we for it positive but think a say directly, year, fact us.

John Murphy

the quick $XX Okay. assume be saves to tech cost that And is have bulk then The for the and business you in billion target forward, reinvested the future one we should going going of clarification. development?

Robert L. Shanks

no. Well,

are In traditional bulk we I proposition would be ICEs to past more That areas winning fact, what the the both be going we clearly flowing that is would capital, to where EVs. to about we're expect business talked And we to we've the hand. within if with we the know winning bottom then are line. cash us through the be question to had and generates, around York, about a – your seeing of do that Jim and generate going ability reallocating will got to the the less that the done and than fact talked or we in invest a planned on that accelerate New giving in in investment it

James P. Hackett

of are that play just business. in software, a can John, but be role Vehicle, margins And, because remind of OpEx the World, I too. lower some of kind services capital Smart that in better, much appetite digital higher you Smart the that's would

John Murphy

much. Okay, you Thank very great.

Operator

line Your next from question UBS. Colin comes the Langan of from

Colin Langan

number sort improved back the But look China this ops the it China great. positive that joint venture out, to sustainable a drivers have I significantly. about, have seemed Oh, venture mean, it's profit Thanks consolidated for taking quite And now? down should gone at think quite you dramatically. my color Any Because one, we the like seemed What on Asia-Pac? joint I of core is how a pull question. and to profits? the when looks are Asia-Pac to number.

James P. Hackett

this, but in with our to you in is I and would they I that I the global Farley's oversee I'm Asia-Pacific, China Peter Bob Jim assignment Well, history going as what attacked Fleet, leader would the effort. all markets some overall think really just our fitness tell of ask to have say for part

some there. taken actions being And are significant

as inference covering that sustainability China you competitors that (XX:XX) well. there's add? to And indigent are pressures going offing. a all follow about says Bob, your so, I'm been I've would things so pair Automotive, the pricing you knowledge more there, and there's to got that the like time that in with and have optimistic lot the and But, in that what that

Robert L. Shanks

too Yeah. I couple things. I of by right improvement the consolidated just guess And ago pretty mentioned, you're is a that Taiwan, restructure would improve the encourages operations the ASEAN, about not That's driven New outside that of need or to is, the been and me about those incredibly that is I broad-based. businesses. Zealand, successful, talking we're thing it's year-over-year One not South it's I Korea. just India, mean, add long China. Australia,

to it. and the about their set So, to some focus done have really feel things that team was fantastic do they as what achieve able I on great

at look therefore, So, as China. we me gives it confidence

towards I marketing also in enormous And that says, end think delivered that we've say we by for to in cost products Jim going have opportunities There's the of add it's operations really of front really China, of lot business think in quality sustaining I see after I China. Asia-Pacific got improve the our coming which overall would that of products the As huge consolidated lot would going have it's come. efforts. further of the I we've like cycle the the performance next well. a we is what opportunities But opportunities we help operation. to as XXXX the a and and to starting new on a

Colin Langan

Got it. I just one could And if question, in of but... kind follow-up unrelated squeeze

Robert L. Shanks

Well, clarification. let's a just it call

Colin Langan

there drivers? billion to have being key year-over-year, cash? this clarify should can mean, of only it's some that $X.X You've guided issues or we to we you the year-to-date QX? is closer Well, cash are get the I that What expect that really a in down year kind but billion. to QX, flow? $X.X dragging it down strong Or are unless

Robert L. Shanks

No.

good I think a question. that's

very think strong going a have we're fourth quarter. I to

better get don't year-to-date. year, to we we $X.X the achieved it's billion but I up that So, to $X.X the have much billion to going expect be than that last

Colin Langan

Got it.

much. very you Thank right. All Okay.

Operator

next Johnson the line Your with comes Brian Barclays. from of question

Brian A. Johnson

Yes.

touched to I a And it's theme others that want go know have question/clarification. Just a back. on, but

across and it that too. with the mentioned like goals, You've in it the office cost stream right? hear business answer to that the questions cost-cutting is of spends it that, related about spending kind or saves programmatic the that. units? sounded timing Did engineering rolling more around America some one specific And, to whether saw in cost-cutting around reengineering, question the actual isn't Is we I even reduction, second, of out top-down where a and material that and extrapolate shouldn't North hence perhaps is the or program work we was effort and of effort from

James P. Hackett

on heads the graphic the There's longer to again, two calling and X, part heard Brian, showed it. this You first October term. in a screen a near-term we mind to fitness has the that, right,

reporting terms improvement. longer-term sits I definite executives running targets streams talking There's review. I of effort the we've six that work small whole and And directly. that's about You identified team and me been and goals have the to company that in this identified and are have for

the is, a new ideas. on that? when you going are to answer The ask these give you question could state fair okay, us should-be working the design they're is, of Now, of

but of a test as So, both effectiveness. think of the also fitness efficiency,

the factories child time complex over of age, there. inform into those the drive way systems the of companies is that nature poster way of computing configuration what evolved in the in publicly factory our very about and products systems to build, So, I'm enterprise the using

were And system start-up moves lot faster. an doing so, order say you the a buy don't have you if a a it a car you today, let's management leaner system, for really and simple that, like, company, so like money electric it's and

how of of at because now the and history and that. And tremendous in they're I performance order going system and are So, warranty stare modern. to what to the capital, Ford they value that terms and create has kinds errors to reducing things make back of things is work-in-process do like improve of do know these it

that. just that's projects small sits So, example like of in the a what

Brian A. Johnson

is we looking example, things those America work North mean, is there just cost timing underway? reduction were for the also cost My this I program questions for – like saves or office saw a short-term stream that's already and in were quarter, that

James P. Hackett

I'm two sorry fitness. Yeah, that I'm to describing interrupt. approaches explicit That to way is the these in

working that a there that's reset we're right So, on is short-term now. effort; the

there's, quick Hinrichs effort. effort in and of the we Jim both benefit Joe why quarter. this applying things with turnaround And Farley course, the a that seen had that here is coming are You've

to there's more come So, there.

Brian A. Johnson

Okay. Thanks.

Operator

comes Joe line next Your RBC Markets. of from with question Capital the Spak

Joseph Spak

Good last Bob. planned the versus easier guess, Jim? a structural the at on having lower or said you look cadence, that, engineering reviewed morning, the in much was is I started, everyone. and of that quarter, point, advertising, either cost think launch Thanks. just and I If follow-up an comp you since which, Jim already we Maybe given how just been

James P. Hackett

that And it's really a costs your company and size on question, in aren't don't Joe. where management breath a which across just a the quarter get to wasn't some some good the in sync. you the what hold where With breath, for means your have hold working just then correlated is we called want I Well, I use Europe, you here can to launch phrase this gone. marketing that a you cost to in the product return. really is costs that regard spend, of of are

want since I that credit, they're know didn't this. your lot those it we kind was tell I it's value want you I match coming bring faster the I what do where get realize am substantially the had here of saying that want those can Ford work, and identifying to spend that design I that. and effectiveness do the not then recast of the money a we and of we areas team, to that and both But of where we coming. revenue hold So, efficiency we the I to had breath give costs in us, money I've spent have a the see would some can the to us I I'm And And more have that to how them value. to is creation. time giving And number what said to you you with of is, value benefit quickly. very what gotten

are And you to to these so, prove warrant to things that quarter instincts that quarter. going your we have of the kinds to I'm are

talking that am. about, about to return that you talking we these things sustainably are instincts the things can you're I kinds quarter. Your I'm of each

Robert L. Shanks

I Joe, that, One think you add is if touched it. can just something. on and I

happened a happens costs It's Your it's will ago quarter; quarter. be what in a that quarter. in variable year by what

and the that through expect you business they'll at the I back just be in about, I be that general be variable expect to to still than cost going he's look period, to we trends up, but quarter. planning go be would going lower was gave it Jim by presentation in otherwise. curve New that to much what The least So, remind at talking to want York. effort

Joseph Spak

that conversation between quarter anticipated? shift related then of the and Credit. then just And some think would than just fourth the range also guidance a Ford is differently maybe there I was terms the And bit had? to timing automotive had you change Thanks. to some we to in mentioned owing Okay. It came the third and in on on follow that of appear that that, earlier little you side cost to

Robert L. Shanks

of the that disclosed of announcement we quarter obvious thing million $XXX Well, was and that know we most about didn't second the the call. just at recall, the that the is time

Joseph Spak

Thank Okay. you.

Operator

comes line Galliers George of question Evercore. from Your next from the

George Galliers

AV, be quarters morning. Tuesday, they see succeed, out have insight relative take to driver their autonomous the and to you taking Good you do your as on in threat? programs not for you thank Barra they'd And If Cruise? do a my or saying able into Yes. And Argo years. On that are commented data question. good Mary she thought where

James P. Hackett

we've talent number went probably as from you who. they've is were that staff. recruited what really that yesterday a company. high we've different if It's our we on Ford can assembled that along looked very efforts made run watermark good. is hit The way into and number control investment and And in I They the that a company adjacent it's a and think lot of that Came talents in to the reported. who's at the evolution about The in the far the I Argo, substantial. and unheralded way are as of not this employees about choose back of space, that the think

of that have saying market what that real is. test for is AVs we we this some We're a we're this well. of XXXX, in into bringing sense time evolution So, have in key as technology us the the

is And to markets serve We we X the will that announced of their smart. this that the vehicles and write about the world I XXXX, October this markets intersection said in that all that it, think that in as the And it And evolving the is By you are really this the brought question it way. way, in administration's has day the an And non-linear you to question. haven't is a about city of the as elusive I in in the full about was I I trying something is way And technology is in you axis that, happened last the a when because want well. and technology position. see smartphone first to fully market. corresponds up peg with which or think about capability as that the is They number their yet. evolve technology. computing is on didn't market of

isn't yet. are possible some of are correspondingly started Maybe narrow without that a about applications sense driver sense. be So, a going to geo-fenced, know in regulatory the the a talking really market launching vehicles in people I

the a some in of to news about quarter-after-quarter. involvement or driver of there's markets vehicles' other this to so last about media claims of any And that without night caution ability in talk technology all the It's the we're observation. about evolution going the is something driven be

remind Company. in let at the you, tour one was ago I'm So, Motor OEM of me in really participants, XXX days of we that I XX first this then Ford the topic years you happy summarize only that. in DARPA were really by my independently telling

we test And to You the the this all being testing have. be We're have we pull these that's driven. off. mentioned getting we assembled continually, I've tracks so forget miles vehicles over can that which world, team already

at So it's what I check a the company. want here is not on Ford that box to going confident to about something do really track the question all. very that and It's is AVs I'm at for

George Galliers

Great. Thank you.

Operator

of Emmanuel from comes next Your Rosner Guggenheim. from line the question

Emmanuel Rosner

Good Hi. morning.

of drives On weak flow. Can the drivers cash clarification cash issues. side, your on It the free And you in I quarter? flow? cash wanted some you're expected the highlighting back please go timing strong like importantly, seems conviction quarter's the fourth over some more what ask this to of your on free flow

Robert L. Shanks

take that I'll one, Okay. Emmanuel.

If by at pretty at driven looking differences negative other a you look slide timing It's and billion. XX. large of – I'm $X.X

timing. forth. as such just Just marketing, under And and difference between compensation, the payments accruals largely half warranty, is in areas so of that and that's pension

reversal intercompany of differences in dividends and the bit of JV timing of We differences the have them. are there's terms a on some well. from little profits differences as that of There's some taxes, cash adjusted the

So, things and it's in in unusual how the is pretty terms large of of it host it's quarter. a whole

Working capital, As improve. profits. we good we we look see And of ahead, expect don't activity. see that type we to

than So, a the fourth what we're much seeing quarter, expect quarter. as said, third in I stronger we

Emmanuel Rosner

company, review I do development then higher? And level the cost or need you've Ford's conducted that to towards you initial that after they think guess, of are that this do Understood. mobility feel appropriate, you go of

James P. Hackett

as big Argo we're of I tests and moment a in announced we've We've And in the of said per ago, we've de commitment made the sense Well, that various share. our cities. think way they're a the program. I investment in I appropriate. earnings they're terms they're work doing that this in But think minimis to announced tipping

development of continue to about Domino's this things has active in big effect are and a I about knows as cumulative know thinking markets this, technology world new they we writing really problems. delivery, where The our that solves way which you discussion I think terms about, that's the hailing, about potential. opportunities of have this terms AV realm the is in that, in talk in of the the it about commitment, applications, been something in think a that but and some about businesses. test, for excess also wanted partnerships of other kind So, applications of billions where in lot more technology of there's report pizza Well, dollars of market proof the this in is in new in Ford we'll market the last I business very ride of about were us add there's on. that for brewing you but to don't Emmanuel,

in reward So, partnerships, as I markets. how help partnerships, part will you of investment. advantage that's know of we new the they the that get answer develop your us with that of that the capability question And, about this is of cost course, to to much it going

Emmanuel Rosner

you. Thank Understood.

Operator

line comes Your the Consumer Edge. James from next of Albertine from question

James J. Albertine

Hi. item. wanted taking the and for spend my strategic you on more Good morning to I question question. a thank

Ford of Motor EVs AVs great generation, forth. in what's us could But was You've and the with job, for as done if out and laying and you so think, opportunities for you them vision and see what will, Credit's the role next X.X? a emerging Ford lacks you I clarify, of help I hoping the Auto

James P. Hackett

of transaction proud FinTech it's the like and course, well nature that that And financed, et with understand and moment the had cryptocurrencies week. thank which It's way. very to who their we cetera. sits efficiencies business cost to time, can the is in you just and a a I board in bank want our But this and Credit, sat get on question, this about have a the a because of as speed long well customers But used as cetera, I run moving run. deal for future tech. the financial it's vehicles can discussion Jamie, part a is deserves a read Ford runs probably applause the I lot of of FinTech, innovation structure know also thought I et services that so around, We that. risk I'm things that profile. about really because, just the for our Joy, which speed financial And, all about structures. that they in enterprise

that team business. can commitment great that We've We we're the of and sharing But really that about there's a the very going be some And that's made Joy been in market. number thing doing future. and small. things the have put good to big we'll So, the wins. this in to scale have a some early this tests,

James J. Albertine

luck. the color, and Appreciate Excellent. of best

Operator

the Michaeli question Itay next of from Your line from comes Citi.

Itay Michaeli

you share with everyone. number Great. employees Jim, reached you Thanks. Argo at the clarification. a that recently Can start Good currently for morning, quick Maybe mentioned Argo? a milestone employee I'll of staffing.

James P. Hackett

Nope.

Itay Michaeli

enough. Fair Okay.

So, I'll on question. the to move next

years, So, up of price five to show potentially reinvested as in kind back could material the of billion in content in cost or next that you the share variable materials billion vehicle $XX of – cost how can going savings be might you the ex-commodities the much of $XX for? that might that

Robert L. Shanks

as it line. Well, impact as of flowing we've at the we plans, had into forward-year bottom the through that majority that that has to our is rolled the look

content, the we terms thought plan product way to think the in would needed is question I had our that characterize So, I already what technology. answer in your we we features, of

too And that's a probably that. opportunity say or have assess work certainly I right In wrong that's or may would combination an underway of the fact, to we anything, things. that's the stream things if much because

opportunity through So incremental as about $XX line. flow largely bottom to billion to the you should think the

Itay Michaeli

Great. you. very Thank helpful. That's

Operator

comes question the of next Morningstar. line from Your Whiston with David

David Whiston

now Lincoln someone changes. stressing was really Company always that My of about the the I morning. Lincoln and thinking the on personnel role Good being coming question between you Lincoln Kumar's split role. wanted is brand under XXX% Motor were the Thanks. you recent impression the Lincoln and broader CMO back. time and

Is your plan changing time? that at all? not is the Lincoln that be to of on So, have someone XXX%

James P. Hackett

when broken like really turn David, this we're say, people, the like running and like the What that hey, I'd commitment. company. you with I to this we've about you changes and shouldn't stride is Jim. question make assume fair That's a that

choice. then this address as You isn't of that to a way position our like. can case, to do direction that oversight. we There's this you'd ownership that's pushing our retain any Kumar in not is want a choice force In us how sequence we have

want Jim share do hit extraordinary give Kumar has So, I done We've to noticed. new marks of to be part revival. to Farley Kumar Lincoln's needs that time an A in that. that. job and with

people, don't want I terms used of top-tier We rankings, credit, surveys. of have kind in customer sat some anyone recent industry to we've have them ratings that and believed own them that of of the I to think gone in some give would in the past the

a whole inside Jim logic is over the we the this, me keep days, this again, of part as of stability he's So little business building over. XXX want with Farley, in our to

broke just work assume It's don't to stride So, that done we've discipline. with be that there.

David Whiston

forward, are saying Lincoln be going on to you to Kumar changes was in and have Are Jim course more some clarify going then. keeping is Or more that And Mark? under Okay. some to there significant just strategy place time? it more once the

James P. Hackett

and The evolution difficult it's were are really achieving looking usually the that. much market we Lincoln Those luxury that that shrunk of I'm recent for. saying times. share gained the in periods, most in

But it happy of building in to may do. want and I to we're having look way still So, terms really that. I there's want Kumar things you compete lots that as I and to to And the win, we're also say want business. say Jim that want of Farley they at managing with I'm credibility here

David Whiston

Okay. Thanks very much.

Operator

Automotive comes question from last line News. with of Your Jim the Henry

Jim Henry

I can long-term, prices medium-term strategy, regard Hi. that car am question. change. Ford to used or I a had Credit-related with long to clear the

thing? from are How down. How expect down. that? Is still coming expectation go do can educated going the that expectation go you do said long-term that to writing values of with going does like used make are some you contracts guesses, contrast limiting go this thing sort values that You car to better one I contracts, extremely And that earlier, we're values you. down. but to

Robert L. Shanks

What in much lease we be No. are contracts, year. that will saying as as the be thought what terms auction in the that I the of declining, for was is early will but assuming had we not values auction what values

around of our values So, year. you lease-end aspect leases earlier if business the outlook, has improved will, and this our that from for

Jim Henry

to for not means have this able that used originated leases what? have So now? there so they begun I'm whether values residuals means affect set higher hung car you're in future to since on future your That sure are that that outlook? long,

Robert L. Shanks

we are today Well, steep that mix. do had expect it has be previously. where extent that expect to not as they But as decline from a to we decline the constant them at we to

Jim Henry

Okay. All right. Thank you.

James P. Hackett

Jim. the end you, Lynn, to just Thank want I with comments. with operator, some

this of are you're they some indications things, The substantial asked, want performance Those is to more stays us improvements are balanced point course, If highlights recap to slide that of questions believe we the you flow. these solid out. are you see and I growing to want quarter with sheet, third more growth, this strong, with improving our do results and We indicators turn We we And key stronger just hit kind cash all today as this can in balance of XX. profitability do believe because and in becoming fitness. fit? of the great cash the quarter. liquidity. hold-your-breath to of our or

guidance the reserves, kind And shape; the It's hear full-year Credit. Ford kind we're as news confident the in right the Bob talked margins. It You great delivering today. that earning it's the fully of has understands it's in of we've great got right about adjusted about. residuals,

everyone us. about you in give to for look continuing dialogue the plans much. thank want future. you joining Company, more to specifics and Motor I our and Thank again, to once And Ford our progress our I So, forward very

Operator

This Motor for Company Thank call. Ford XXXX third you earnings your concludes the participation. conference quarter fiscal

now may disconnect. You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.