DETROIT / LONDON (IT BOLTWISE) – Ford faces major challenges from US trade tariffs. CEO Jim Farley explains how the company plans to maintain production in the U.S. despite the financial burden of tariffs and growing competition from China. The strategy includes an increased focus on electric vehicles and collaboration with other companies to improve infrastructure.
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Ford faces significant challenges from trade tariffs imposed by the US government. These tariffs primarily affect imported parts that are essential to the production of vehicles. Jim Farley, Ford’s CEO, emphasizes that it is not economically viable to produce all parts in the United States. This would drive up costs for American consumers and threaten the company’s competitiveness.
A significant part of the challenge is that some components, such as certain fasteners and wiring harnesses, are not even manufactured in the United States. Tariffs on these parts can be as high as 70 percent, costing Ford around $2 billion annually. This financial burden reduces approximately 20 percent of the company’s global profits. Farley emphasizes that employees are ultimately the ones who suffer from this policy.
The threat of Chinese electric vehicles is another topic on Farley’s mind. These vehicles are small, inexpensive and technologically advanced, making them serious competition for American manufacturers. Although a Biden-era tariff on Chinese electric vehicles protects the U.S. market for now, these vehicles are gaining ground in other markets such as Europe and Latin America.
To remain competitive, Ford plans a strategic shift toward smaller, more affordable electric vehicles. An example of this is the announcement of a new mid-size electric pickup truck that will sell for $30,000. This initiative represents the most radical change in vehicle development at Ford since the Model T, according to Farley.
Farley’s approach to understanding the competition by driving a Chinese electric vehicle himself shows his determination to actively address the challenges of the future. These experiences inform the development of Ford’s own electric vehicles and underscore the need to improve charging infrastructure. In this context, Farley even contacted Elon Musk to discuss the use of Tesla’s Supercharger network.
For Farley, transforming Ford is not only a business imperative, but also a personal mission. With deep roots in Michigan and a family history closely linked to Ford, he sees his job as protecting jobs in the American auto industry and leading the company into a sustainable future.
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