Ford CEO Jim Farley says company will be advantaged around tariffs: Fairest fight in decades

Nearly two months after Donald Trump’s far-reaching tariffs were unveiled, Ford Motors CEO Jim Farley told me how — despite that added complexity — he has never been more optimistic about Ford’s future.“I mean, how exciting is it to go from being criticized for our US plants — in every investor meeting I had, [hearing] why do you make so much in the US, why don’t you localize overseas, why don’t you do more of what your competitors do? — to actually be advantaged because we’re building an American car company and always have.”Despite globalization, Ford, a publicly traded but family-controlled company, has consistently invested in American operations, manufacturing high-value products domestically and exporting more than it imports.It’s the largest US automaker by domestic production, and the F-150 is the biggest consumer product by revenue actually made in America, according to BCG. The Trump administration’s focus on American manufacturing, Farley said, aligns with Ford’s long-standing strategy.“We’re not quite there yet,” he said of how tariffs could motivate re-shoring, “but that’s the place we’re gonna be.”Getting it right has never been more challenging, amid global supply chain disruptions and economic uncertainty.

Even with its emphasis on being an American company, Ford still sources a number of parts from outside the US, particularly China.While some high-value parts such as transmissions could be re-shored, others, like wiring looms and bolts haven’t been made Stateside in decades.Starting that market up again would, realistically, be cost-prohibitive.

On its earnings call, Ford said that the tariffs could increase its costs as much as $1.5 billion this year on adjusted earnings.“If we made 100% of the parts in the US and not [Ford’s current] 85%, that 15% times the US premium for all the other things I mentioned would add thousands,” Farley said.For years, Ford “just had a lower margin … It c...