Ford CEO Says Transportation Secretary Had 'Basic Misunderstandings' in Letter

Dow Jones
9 hours ago

Ford Motor Chief Executive Jim Farley strongly rejected claims from Transportation Secretary Sean Duffy that the automaker was growing overly reliant on Chinese car companies, including in its business tie-ups overseas and a battery plant in Michigan.

"These are basic misunderstandings, mistruths, whatever words you want to use, that could be cleared up in a simple five-minute call," Farley said in a Wednesday interview with The Wall Street Journal.

Farley said Duffy's comments, made public in a letter Tuesday, mischaracterized the examples of Ford's operations. Duffy accused Ford of "actively intertwining its future with Chinese state-backed enterprises," including a plant that licenses technology from Chinese battery giant CATL.

"We're not enabling the Chinese to come here," Farley said. "Actually, you could argue the opposite is the case."

A Transportation Department spokesman declined to comment beyond Duffy's letter.

The exchange illustrates the continuing friction in Washington and beyond over the potential of Chinese automakers making their way into the U.S. market, which industry executives have described as an "existential threat" to American companies' long-term viability.

It also represents an inconsistency in how the Trump administration has portrayed Ford's business strategy. Commerce Secretary Howard Lutnick recently praised Ford's investments for bringing thousands of jobs back to America, while the White House recently touted the automaker's battery plant investment that Duffy had singled out.

"We have great relationships with them that are informal where we can call each other, in either direction," Farley said. "And we've never been surprised like this."

In his letter to Farley, Duffy said Ford "intentionally chooses to deepen operational dependencies on strategic competitors." Duffy added that companies like Ford "are expected to out-innovate competitors" instead of relying on them.

Most major automakers, including Ford, have backed pending legislation to ban China's upstart companies from making or selling cars in the U.S. But they are increasingly working together with their competitors in overseas markets, where Chinese carmakers have gobbled up market share.

Under a deal with Chinese automaker Geely, Ford's plant in Spain will be used to make Geely vehicles for Europe, and the two companies will co-develop an SUV for overseas sales. Those vehicles aren't intended for the U.S. market, Farley said.

China's carmakers have been effectively boxed out of expanding in the U.S. because of hefty tariffs and a ban on Chinese connected-vehicle software.

Ford took a bruising hit on its EV investments last year, taking an expected $19.5 billion in charges. The company is repurposing battery plant capacity for a new energy-storage subsidiary that it launched this year with an initial $2 billion investment.

Ford has long staked a claim as the U.S.'s top vehicle manufacturer and employer of hourly auto workers. About 80% of the vehicles sold by the company in the U.S. are built in the country.

Duffy said in his letter that Farley proposed a "framework" to U.S. officials earlier this year at the Detroit Auto Show to facilitate the creation of joint ventures in America for companies to build cars with Chinese carmakers.

Farley said Ford didn't propose such a framework. "N-O, period," Farley said. "That's flatly wrong. Ford does not propose any framework described in the letter. We are America's car company."

While outspoken about the threat China's carmakers pose to the American auto industry, Farley has also acknowledged that Ford needs to work with those competitors in some capacity to maintain an edge around the world.

Farley said the battery plant in Marshall, Mich., is owned and operated by Ford. Batteries produced there will be used to power future electric vehicles.

"I sure would love the Secretary to come to Marshall, Michigan, and to Louisville like others in the administration to see our breakthrough technology innovated here in the U.S.," Farley said.

 

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