Why Ford CEO Jim Farley is bullish on 2024 — and why racing is key to selling 'passion' cars
By Pras Subramanian, Yahoo Finance
I recently flew down to Charlotte, N.C. — the home of NASCAR in the US, among other things — to preview all of Ford Performance’s new race cars and meet its CEO/race car driver-in-chief, Jim Farley.
Farley was in good spirits; for one thing, he enjoyed showing off the new Mustang GT3 race car and new high-performance EVs like the Lightning “Switchgear” pickup. Another thing he enjoyed talking about? His expectation that 2024 will be a big year for Ford — one of the biggest since he took the helm three years ago.
How Ford intends to win on the race track and the sales floor
But let’s begin with Farley’s passion for racing.
In a first for Ford Performance, the company motorsports division highlighted all of its racing endeavors with what it called its 2024 Season Launch. Ford’s motorsports presence has been growing rapidly in recent years, from racing Mustangs in NASCAR and now in Europe with the GT3 endurance series to off-road endeavors with the Ford Bronco and an upcoming Raptor pickup in the Dakar Rally.
Farley said the company races for two reasons: to bring attention and focus on “passion products” like Mustang and Bronco, but also because he believes motorsports is good business, and not just for marketing. Ford believes racing can also be a profitable venture.
“We think that racing could be a business, a sustainable business [that] I’ve ever seen over my 40-year career,” Farley said in an interview with Yahoo Finance (video above).
Since becoming CEO, Farley — a former Toyota exec — tried to change the way Ford approached the market. It would no longer be all things to all people, like Toyota for instance, which has a vast portfolio of car offerings.
Farley said Ford was done with making “vanilla,” or normal, cars — he wanted to sell cars that excite. “We want racing more and more to inform our production vehicles, not in the past like it affects our suspension geometry [for example]. Like we actually want to sell street race cars, lots of them,” he said.
Not surprisingly, Farley is a race car driver. He has, for instance, competed in Rolex classics racing at Monterey in cars like his 1966 Ford GT and 1978 Lola T298, which I saw him drive at Laguna Seca, among other purpose-built race cars.
Farley posing with fans at Daytona International Speedway ahead of the IMSA Vo Racing SportsCar Challenge motor race last January. He finished 12th. (AP)
And it’s that focused attitude that Farley wants to bring into 2024. Last year wasn’t the best for Ford; a bruising six-week contract negotiation with the United Auto Workers (UAW) and slumping demand for EVs had the company rethinking its long-term strategy. But the company still expects to make $10.0 – $10.5 billion in adjusted EBIT (earnings before interest and taxes) in 2023, basically in line with 2022, despite having to deal with the UAW’s stand-up strikes.
Another hiccup in its EV transition was revealed just this week, with Ford transitioning 1,400 workers off F-150 Lightning production at its Rouge electric vehicle production center as EV truck demand continues to wane.
Despite this, Farley is optimistic that 2024 could be big one for Ford as it doubles down on its popular vehicles and adjusts its EV rollout. While it will cut a factory shift for the Lightning, it will boost production of the Bronco SUV and Ranger midsize pickup.
“I’ve been leading the company for three years, and 2024 is the first year I can say we really have a chance to have a breakout year for a lot of reasons,” Farley said. “We’re past our labor issues and negotiation in the U.S., but most importantly, we’re launching like six new products, and we already have a fresh new lineup of Broncos and Mavericks.”
Farley believes Ford’s new product strategy of not being everything to everyone and focusing on passion products will pay dividends in 2024. Ford EV strategy is also evolving with a long-term focus on bringing prices down as the company sees EV sales stabilizing at around 10,000 a month. A pivot to hybrid is helping alleviate the cost of that transition to EVs — in particular the F-150 — as Ford attempts to give its customers what they want.
“We’re No. 2 in hybrid [sales in the U.S.],” Farley said. “So at Ford, we have all this choice, an F-150 electric, or a hybrid, or an ICE [internal combustion engine]. We don’t really care, let the customer choose.”
Wall Street may be skeptical of Ford and Farley pulling back their EV ambitions after being gung ho only a year ago, but if Ford can improve sales and maintain profitability, all is likely forgiven.
Coming out of a decent sales year in 2023, Farley believes Ford is set up to keep winning on the dealer lot with new products in 2024, as well as on the track with new race cars. As Farley spoke about the prospects of both of these endeavors, the conversation of course turned back to this year’s big races — and he revealed the one race he’s really excited about winning.
“To bring a Mustang back to Le Mans [24-hour endurance race] and beat Porsche and Ferrari at home, on their turf in Europe, not with a GT prototype or a one-off car, but an American car that someone could buy for 30 grand? How cool would that be to beat Ferrari and Porsche,” a moment that all Ford employees, and chairman Bill Ford, would be so proud to see, he said.
“We’re gonna put everything,” he added, “We are throwing everything at Ford Motor Company at that race.”
Does that plot line sound familiar?
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
