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'Fireside chat' part 3. Observations from Farley about how engineering within Ford has been evolved for a new era with EV design: 

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I heard my Head of Engineering say, there's no design cost difference between a model and a monkey. Monkey is super popular with customers. So let's just talk the part that customers don't see the cost. I was like. So, the reality is, our wiring harness is 1.6 kilometers longer, it's 70 pounds heavier in battery costs, it's $500 of weight just to carry the wiring harness around.

The battery is so expensive in these vehicles that the math totally changes around aero, around simplicity of engineering. Even the cooling system that we use, which is an ice cooling system metric had to withhold like 4x the pressure of the cooling system that we actually had to use in the Mach-E. We had -- even the piping of the cooling system was triple what it needed to be in terms of spec. We have 50% more fasteners.

So, we've redone all of our platforms, completely changed the engineering, large castings, a completely different math. And what you'll see (gen 2 EV) is a vehicle like half the labor content, half the fasteners have not just lower parts, but radical simplicity. That's what John was talking about. And every watt of energy is measured. It's like Apollo -- the Apollo program.

Everyone has to be measured. If you need to spend more on the wiring system, not just for weight because it's much more efficient and save $900 in a battery, spend the money. Aero, a fully optimized full-size truck on aero, 75 miles more range.

 

Farley has a very interesting take on how Ford had to change in its approach. It's not finger pointing, it's recognized 100 years of having done things a certain way because institutionally most of those approaches had been learned over decades (but had to be changed for the EV era): 

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We needed a completely different prejudice. Our (current) prejudice will never get to 8% profit. We have to design the vehicle totally differently. We have to manufacture it, we have to source it, and we have to sell it totally differently. And that's been a big transition. (For example) You have a standard at Ford for the thickness of the cooling system, of a standard for what a wiring harness cost. It's because we have a prejudice and that prejudice was formed after 100 years of doing it that way for good reason.

Aero is a good example. An aero in the ICE world, it makes a difference, but it's not a total game changer. But in the EV world, with an expensive battery, aero is a complete game changer especially for larger three-row type products. A traditional silhouetted three-row crossover versus an optimized arrow for the same interior space or maybe even larger, it's thousands of dollars of battery cost difference. Now that is just a mindset difference.

The battery is so expensive in these vehicles that the math totally changes around aero, around simplicity of engineering. Even the cooling system that we use, which is an ice cooling system metric had to withhold like 4x the pressure of the cooling system that we actually had to use in the Mach-E. We had -- even the piping of the cooling system was triple what it needed to be in terms of spec. We have 50% more fasteners.

So, we've redone all of our platforms (gen 2 EV), completely changed the engineering, large castings, a completely different math. And what you'll see is a vehicle like half the labor content, half the fasteners have not just lower parts, but radical simplicity. That's what John was talking about. And every watt of energy is measured. It's like Apollo -- the Apollo program.

Everyone has to be measured. If you need to spend more on the wiring system, not just for weight because it's much more efficient and save $900 in a battery, spend the money. Aero, a fully optimized full-size truck on aero, 75 miles more range.

 

Lastly, Farley revealed where Ford are in their design generations for EVs and the upgrading of their EV architecture in each generation:

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We've been engineering a whole second cycle (generation). You haven't seen it but it's being locked down now. What's even more important is the third cycle (generation) because no one's going to stand still. We have to think about the next breakthrough beyond what we've already learned. But the biggest change, which we haven't talked about, is the competitiveness of our embedded electrical architecture because we've never had the chance to send software to the car.

We now know there's three software stacks we can ship to the car that the customers will pay for. Productivity for our Pro business, ADAS, there's a lot more revenue to be had there in Safety and Security. Whoever has the best electric architecture, we'll have the best software revenue. And so at the same time, we're doing all the lessons learned on the EV side, we're engineering and in-sourcing our embedded electric architecture to take back that. So, we have a fully software-enabled vehicle before competitors.

And for the traditional OEMs creating in-sourcing 100% of your embedded electric architecture and all the software that runs a car is a huge task. It's a real breakthrough project. And I'm proud to say at Ford, I've already seen the working prototype. So we made that much progress Ford.

 

Edited by Harley Lover
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39 minutes ago, Harley Lover said:

'Fireside chat' part 3. Observations from Farley about how engineering within Ford has been evolved for a new era with EV design: 

 

Farley has a very interesting take on how Ford had to change in its approach. It's not finger pointing, it's recognized 100 years of having done things a certain way because institutionally most of those approaches had been learned over decades (but had to be changed for the EV era): 

 

Lastly, Farley revealed where Ford are in their design generations for EVs and the upgrading of their EV architecture in each generation:

 

HL

Thx for taking the time for these summaries....ball in my court?

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Interesting observation about Tesla in Norway and echoes what many of us have been saying.  Once you go from boutique mfr to mainstream long term mfr you have to start doing things that incur a lot more cost.

 

Farley’s comments show he understands how Ford needs to navigate this new journey while taking advantage of their inherent strengths.

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  • 3 weeks later...

Ford to Host March 23 ‘Teach-In’ About Financial Reporting, Strategic Implications of New Customer-Focused Segments | Ford Media Center

 

DEARBORN, Mich., March 15, 2023 – Ford next week will take the investment community and other stakeholders through how new, customer-focused business segments – Ford Blue for iconic gas-powered and hybrid vehicles, Ford Model e for breakthrough electric vehicles as well as the digital platform and software for all Ford and Lincoln vehicles, and Ford Pro for commercial vehicles and services – will affect its financial reporting and is expected to unlock significant strategic potential of the Ford+ growth plan.

The Thursday, March 23, event, featuring John Lawler, chief financial officer, and Cathy O’Callaghan, vice president and controller, will include a presentation and question-and-answer session for analysts. The company will also provide recast financials for 2021 and 2022 that align with the new organization.

 

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Thanks for sharing this interesting post! It's always interesting to see how large companies adapt and evolve, especially in an industry as competitive and rapidly changing as the automotive industry.
Reducing costs and improving quality are both important goals for any business, and I'm curious to see what specific strategies Ford has for achieving these objectives.
I have a small business now and use stephenswmg.com to attract more clients. However, I hope to reach the popularity of big corporations once.

Edited by Keybab
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On 2/22/2023 at 11:28 PM, AM222 said:

Not surprising after Ford having the most recalls in 2022 (at least in North America), they just had another recall that involves the Ford F-150, Mustang, Explorer, Bronco, & Lincoln Aviator, and it's only the second month of 2023.

 

Looks like Ford should continue its streak of having the most vehicles affected by safety recalls. Latest recalls from Ford announced in March 2023.

  • 1.2 million 2013 - 2018 Ford Fusion and Lincoln MKZ with faulty hoses that leak brake fluid. RCAK-23V162-1202.pdf (nhtsa.gov)
  • 222k additional 2021 - 2022 F-150 with faulty windshield wiper motors. This is an expansion of a previous recall that affected 474k F-150 of the same model years. RCAK-23V163-6739.pdf (nhtsa.gov)
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15 hours ago, rperez817 said:

 

Looks like Ford should continue its streak of having the most vehicles affected by safety recalls. Latest recalls from Ford announced in March 2023.

  • 1.2 million 2013 - 2018 Ford Fusion and Lincoln MKZ with faulty hoses that leak brake fluid. RCAK-23V162-1202.pdf (nhtsa.gov)
  • 222k additional 2021 - 2022 F-150 with faulty windshield wiper motors. This is an expansion of a previous recall that affected 474k F-150 of the same model years. RCAK-23V163-6739.pdf (nhtsa.gov)

Imagine if Ford would have put half of the recall and warranty expense ($1b+) into better quality and evaluation of components from the start...

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1 hour ago, Chrisgb said:

Imagine if Ford would have put half of the recall and warranty expense ($1b+) into better quality and evaluation of components from the start...


That’s the problem - you have to make the decision to spend the extra time and money up front when there is no guarantee it will pay off in 5-7 years.  It’s too easy to take the savings now and gamble that something bad won’t happen.  Ford is losing that gamble so you’d hope they won’t keep taking those risks.

 

It’s no different than us making a decision to put off a roof replacement because we want to buy a new truck and hoping the roof won’t have a catastrophic leak in the meantime.  If it works out it’s great.  If not your $8000 roof replacement became a $30k repair.  It takes discipline not to take the savings now.

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10 hours ago, Chrisgb said:

Imagine if Ford would have put half of the recall and warranty expense ($1b+) into better quality and evaluation of components from the start...

To simplify, imagine if Ford did the right thing for its business instead of short sighted expediency ……….that would be a decades long list.

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