AUTOMOTIVE NEWS WORLD CONGRESS - JIM FARLEY SPEECH
Thanks, everyone.
It is a privilege to be able to speak to you on this historic day – Inauguration Day – because as we inaugurate a new president, we also inaugurate a new age of the automotive industry.
As a new administration takes office, many Americans are looking forward to a year of change… and at Ford, so are we.
So much energy has been spent on stakeholder concessions that some have lost sight of what this business is really about… consumers and product.
While 2009 won’t be an easy year in any respect, I think it will be a year marked by very exciting, positive change. Real change. At Ford, you’ve already seen the change in our products.
Our product portfolio is different, with nearly 60 percent of our product investment now flowing to cars and crossovers, so these products can be as strong as our trucks.
Ford quality is on par with the best in the business, unsurpassed by Toyota and Honda.
Plus, across the lineup, my teammates in Product Development – led by Derrick Kuzak – are delivering the best or among the best fuel economy in every new vehicle we bring to market.
Ford Focus. Escape. F-150. Flex. Fusion. Fusion Hybrid. And now Taurus. The Ford vehicles alone showcase the power behind Ford’s largest-ever powertrain investment.
Six-speed transmissions. EcoBoost engines. Even more I-4s. These are the high-volume changes that are going to help us deliver affordable fuel economy for millions.
And on the marketing side, we’re going to talk a lot about this.
For years, fuel economy has been a reason for customers NOT to buy a Ford. Now that Derrick and the team have delivered the goods, it’s our job to make sure that people know Ford’s real fuel economy story…
- That Fusion delivers America’s best fuel economy in a mid-size sedan, whether it’s a hybrid or powered by a gasoline engine.
- That Ford, already the largest domestic producer of hybrids, makes the world’s most fuel-efficient small SUV and is doubling the size and volume of its hybrid lineup.
- That our F-150 – part of the F-Series family of trucks that have been America’s favorite for 32 years straight – is unsurpassed in fuel economy and unparalleled in its capability.
- That with our strong new lineup of EcoBoost engines, which deliver up to 20 percent better fuel economy and up to 15 percent reduced emissions versus larger-displacement engines, we’ll soon be able to deliver V-8 power and V-6 fuel economy in the Flex, Taurus and even the Lincoln MKS.
These are the facts, of course.
But I challenge my team everyday, asking, “How do we make these facts compelling enough to get our customers’ attention in this challenging marketplace and motivate him or her to get out of their chair and ‘Drive One?’
I tell my team every day that they must get so close to their customers that they can smell their breath! That is what it takes to learn what makes them tick.
We’ve done it with truck customers, allowing us not just to market to them – but also to deliver the pickups our customers truly want and value.
Capability is the name of the game with the core truck buyers driving the segment today and, as you can see, they’re looking for authentic, pull-no-punches ads that highlight substance instead of gimmicks.
Ford understands what’s in the hearts and minds of car buyers, too, especially in Europe and other parts of the world. We plan to pick up our game here on the car side, too.
Ultimately, we’re not just trying to make great ads. We want to transform and activate our employees and even our customers to become ambassadors for the Ford brand.
Success means on a random weekend, either in a coffee house or in a chat room, you hear customers saying, ‘I bought a Ford – and here’s why.’
Let’s face it, when the industry volumes are at a near 30 year low, it’s a little easier to talk to customers on a 1:1 basis… I suppose that’s one of the few upsides.
We’re using this time to build our base and watch it grow as the industry grows.
This is exactly what is at the core of “Drive One.”
Ford is one of the few brands that can pull off this personal touch. Ford is a family, let’s face it.
When the founding family is still running the business, there is a different feel to the brand… one we want to make sure we preserve and hold sacred.
That was one of our guiding principles during the development of ‘Drive One,’ and it’s interesting to reflect on how the development of ‘Drive One’ marked a turning point in our relationship with dealers.
Before my time at Ford, dealers were involved in Tier 1 communications further downstream, often when the structure and foundational elements were already in place.
With ‘Drive One,’ we brought them in at the start. In fact, prior to even the idea development phase, the dealers were brought in for input and alignment on strategy.
Feedback was solicited from the entire Ford dealer body, and that feedback was shared with the Marketing Dealer Advisory Board to help inform campaign development.
The dealers were the 'difference makers' and together we arrived at a campaign that worked at both Tier 1 and Tier II and now serves as a rally cry for an entire company.
Building a campaign together also helped to foster a level of trust and partnership that broke down some of the barriers that can exist between an OEM and its retailers.
Let me assure you, our commitment to our dealers – from Alan down to our Zone Managers calling on dealers – has never been stronger, even as we continue working through significant business challenges.
This new spirit of cooperation is delivering significant benefits – including the creation of a cooperative Tier III program with our dealers.
During our Advisory Board meetings last year, we learned dealers had to pull some of their own advertising money out of the market due to the sluggish economy.
To encourage them to stay in the game, we created a Tier III coop advertising fund that benefits us both. We help them to create a message that better aligns with our Tier I and II advertising, and they keep us in front of the customer in their local markets.
With 'Drive One' we have alignment on our creative execution at all three levels – this is something we've never done before at Ford. We've also demonstrated that we can build the brand and successfully merchandise our products simultaneously. Today everyone is merchandising and every month is a sales month. The difference is the consistency you'll see in our Tier 1, Tier II and Tier III communications.
This is a great example of how our dealer partners are helping us to become “better together.”
Another example is how we’ve been working with dealers to aggressively reduce the complexity in our vehicle ordering system.
When I arrived a little more than a year ago, Alan and the team were already working with dealers to focus our design and manufacturing efforts on key “high-velocity” models.
We like ‘velocity’ and so do our dealers.
Ford used to be good at this. And now we’ve redoubled our discipline to keep complexity from creeping back into our product system.
Dealers were great at sharing their expertise about what really appeals to customers, as they also do when top dealers meet to review our product plans. Today, we’re both benefitting – with lower days’ supply, lower engineering costs and lower floor-planning expenses.
Ford was one of the few OEMs to deplete dealer inventory in the fourth quarter – and we reduced gross stock at the highest rate in December.
We have among the lowest days supply in the industry (441K units gross stock). And here you can see how our approach is different than our competitors’ in managing capacity to meet demand.
The result for Ford is more stable production levels for our assembly plants and suppliers, and also more stable inventory levels for our dealers.
Working together, we’re seeing similar traction inside the company, too, by making sure PR and Marketing are aligned more closely than ever, pulling on the same set of oars. The best example of this is the recent 2010 Mustang reveal televised nationally on SPEED. The Marketing, PR and Communications Team all collaborated to deliver a reveal viewed by an estimated 2 million people instead of 200 of our favorite journalist.
This is what I call 'scrappy' because it spread the word about the new car and it involved the enthusiasts who participated in the reveal live and in theatres across America. These enthusiasts are now out there spreading the word about the new Mustang further amplifying our message.
For 2009 this new alignment between PR and Marketing will focus their efforts on quality and fuel economy, concentrating on the key products that best show customers and the outside world how we’re doing business differently.
Fusion, Taurus and Fiesta will all be front-and-center this year, paying off the Ford brand promise.
Ford has always been about democratizing something. That goes way back to the time when Henry Ford democratized transportation by mass-producing a car almost anyone could afford to own.
Looking ahead to the next decade, Ford will be known for democratizing technology. Ford already has started bringing to market the finest automotive technology available anywhere – through clever strategies that allow scale, speed and affordability.
EcoBoost engine technology as well as SYNC and our partnership with Microsoft are great examples of this democratization.
EcoBoost will be offered on nearly 90 percent of our nameplates by 2013, further illustrating the technology trajectory we are on. .
As for SYNC… in addition to linking people with their Bluetooth devices hands-free while driving, this year SYNC is going to be able to deliver Traffic, turn-by-turn Directions and Information – without a monthly fee – using a driver’s cell phone.
Of course, we haven’t forgotten that Ford stands for great products, too.
The new 2010 Ford Taurus is a great example of Ford at its best.
In record time, the team has delivered a stunning all-new sedan with an amazing amount of technology starting at the same price as the 2009 Taurus.
We’re not planning to pepper the airwaves with superficial ads that talking about how this upscale, aspirational sedan can move people physically and emotionally.
We want to talk with people about how these new features – and how this great new car – is going to make their lives better.
We understand that consumers don’t want a one-way conversation. They don’t want marketing spin. They want a relationship, founded on something real that they can believe in.
One-to-one marketing is so critical. It comes down to what happens in a dealership… or on the auto show floor – and I hope each of you were able to see the hands-on science museum-type features at this year’s Ford exhibition at Cobo.
It’s about bringing the brand promise, the technologies and the story alive for consumers, giving them reason to believe. This is how I got Scion off the ground, one customer at a time.
What we’re doing with the introduction of the Ford Fiesta is a great example of how we’re looking for new ways to get people talking. In fact, in this initiative, we’re going to let the consumer do almost all the talking.
In true ‘Drive One’-style, we’re going to invite consumers to experience the product, give us feedback and share with the world their experiences – nearly a year before we bring Ford Fiesta to the U.S. market.
About 100 tech-savvy vehicle enthusiasts will be chosen to become Fiesta Agents.
Our agents will complete monthly missions in their European- and Asia-spec’ed Fiestas. They’ll go to new places, meet new people and experience new things with their friends and followers along for the ride.
Then, they’ll relay their experiences through social media channels.
This is more than just marketing… this truly is a relationship-building experience, as we’ll be gleaning feedback from our agents that will help us improve the product as we get closer to launch.
In addition to exposing our agents to the Ford Fiesta, we will also offer 100,000 test drives to consumers all over country before launch introducing more people to the Ford Family.
Now, the important thing to keep in mind when you’re turning to consumer conversation to drive your marketing is that… there had better be something real to talk about.
Fiesta gets people talking with its dynamic, bold design and a level of manufacturing quality that American consumers may not be used to seeing in a small car of this type.
And that’s really the crux of the Fiesta Movement… and, essentially, ‘Drive One.’
Today’s consumer is smart. They’re sophisticated. They understand – and reject – what worked in the past. Because this is a new age.
An age of change.
‘Drive One’ and our marketing efforts will help accelerate the transformation of this company because of their unique human element.
Frankly, I couldn’t be more excited about our future at Ford. In hard times, good companies entrench and innovate in an anticipation of better times ahead – and that’s exactly what we have been working on.
As you’ve heard us saying, we’re One Ford, leveraging all of our global assets. We have a plan and it’s working.
We’ve pulled ourselves up by our own bootstraps.
We are driving toward a position of fuel economy leadership.
We have incredible products today!
We have a tremendous partnership with our dealers who are keeping us honest, and we have marketing plans in place that will engage consumers the way they want to be engaged, providing them the information and motivation they need.
It is our turn as marketers at Ford to deliver the goods, and we intend to do it.
And we know that whatever lies ahead, Ford is ready for change.
Thank you for your time today, and now I should hand it back to Keith so we can take your questions.