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Lessons From Ford’s Biggest Bet

by Admin
May 26, 2022
in CEO
Lessons From Ford’s Biggest Bet


More than a decade ago, I was walking the floor of the Detroit Auto Show with Bob Lutz, one of the key architects of the Chrysler turnaround and one of the best-known “car guy” executives of his generation.

I was prattling on about Silicon Valley’s culture of “embracing failure” and failing fast, etc., wondering what lessons Detroit might learn from this revolutionary new way of developing products when he stopped mid-stride and stared down on me with his cool smile atop a baring that was pure Marine aviator (which he was) addressing a far-lesser being.

“Dan, do you know what happens if carmakers embrace a culture of failure?” He asked. I sputtered that I did not, so he enlightened me: “People die.”

Car companies can, too—but that doesn’t mean they can avoid taking risks. That walk, and that moment, were very much on my mind last week at our Smart Manufacturing Summit, our annual pilgrimage for a select group of CEOs who get a chance to deep dive on the issues of top concern to them right now and see some of the most iconic, most important production facilities in the world.

Our group was the first to tour the Ford Motor Company’s brand-new factory for the F150 Lightning just a couple of days after the first truck had moved through the line and off to a dealer. It is one of the—perhaps the—most important vehicle the company has produced since the Model T and the most high-profile part of the biggest bet in the history of the company. My immediate takeaways from the visit:

  • Tesla killer. In the Lightning, Ford CEO Jim Farley appears to have produced the first true mainstream EV for the U.S. market—and stolen Tesla’s psychological stranglehold on all-things EV. America is a nation of truck buyers, not sedan buyers, as evidenced by the 200,000 pre-orders the company is already racing to fill. That shouldn’t be surprising: The gas F150 is the bestselling vehicle—not just truck—in the U.S., and that one can’t be used to light your house in a power outage.
  • Experience counts. By so far avoiding the “production hell” Tesla had to painfully traverse in coming to market, Ford is showcasing that when it comes to making vehicles, know-how is a formidable edge. It’s a brushback pitch to a slew of upstart carmakers looking to grab the future and stumbling to do so.
  • Most important: It’s an early validation of Farley’s $50 billion bet on EVs, his splitting the company into an electric newco and an internal combustion legacyco with nothing less than the future of Ford on the line. If consumer spending can keep chugging along into the inflation headwinds, this massive-margin vehicle will fatten Ford nicely.

In the most recent issue of Chief Executive, our Dale Buss, who has covered Detroit for decades, digs into Ford’s big bet, talks with Farley to unpack the strategy behind what he’s doing and reminds us that sometimes—no matter the stakes, no matter the risks—failure just isn’t an option. Read the full article>



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