Ford Motor Company (F) Wolfe Research Auto, Auto Tech and Semiconductor Conference summary

Opening insights and strategic focus

• Emphasis on cost structure improvement as the primary opportunity, with a unique focus on the Pro business and capital efficiency as a new management priority.

• Pro business highlighted for its differentiated, less cyclical revenue streams, especially in services and software.

Cost structure and operational changes

• Leadership overhaul and third-party validation implemented to drive cost competitiveness, with 2025 as a key milestone.

• Over $1 billion in material and manufacturing cost improvements achieved, with further robust plans for 2024.

• Cost savings are back-loaded due to compounding effects and timing of supplier negotiations and part redesigns.

• Warranty and material cost reductions targeted through process changes, over-the-air updates, and improved dealer communications.

Free cash flow and financial outlook

• Free cash flow expected to decline from $7B to ~$2B in 2024 due to lower EBIT and working capital swings, with a rebound to ~$4B in 2025.

• Inventory management and timing differences in warranty accruals are key factors in cash flow projections.