The Department of Energy announced that Ford will receive $5.9 billion in loans meant to modify factories to make more fuel efficient vehicles. In my opinion, most government driven attempts at industrial policy are destined to fail, but in the context of the immense government bailouts for General Motors and Chrysler, I suppose that $5.9 billion is a mere rounding error.
Mr. Mulally even states that “we wouldn’t have changed our plan one bit” without the financing. This is supported by prior comments he has made, some of which I have posted on this site. Let’s take a look at Mr. Mulally’s comments today on CNBC.
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Disclosure: The author does not own shares of Ford Motor Company.
In late May, I posted an interview with Ford Motor Company’s Chairman Bill Ford regarding the company’s plans for battery technology. CNBC interviewed Ford’s CEO Alan Mulally today. Topics covered include Ford’s product lineup, plans for hybrid vehicles, the impact of the GM and Chrysler bankruptcies, the health of auto suppliers (recently turned away in their requests for additional Federal bailout funds), the “cash for clunkers” plan, and more.
I found two interesting video interviews with Bill Ford that are applicable to recent articles on this site regarding electric vehicle technologies. Ever since Berkshire Hathaway announced its investment in BYD, I have tried to follow developments in the industry. BYD’s new e6 electric car appears to be a breakthrough in terms of performance and range. Since I posted a number of videos of BYD’s founder Wang Chuanfu, it seems appropriate to post Bill Ford’s view of the industry as well which appears in the videos below.
What I found interesting about the first video is the very different approach Ford is taking toward electric vehicle technology compared to BYD. While BYD is a vertically integrated manufacturer, Ford is not involved in developing battery technology and instead purchases the batteries from vendors. While it is too soon to know for certain, BYD’s origin as a battery manufacturer could be a competitive advantage compared to automakers that view batteries as just one component of the vehicle rather than a proprietary technology.
While I am not a Ford shareholder, I do own two Ford vehicles and I tend to be “brand loyal”. With Ford being the only American automaker that has not yet received government assistance, it would be beneficial for the country and the industry if Ford and BYD both find strategies to succeed in electric vehicle technology. I suspect that multiple approaches will be attempted before the industry standardizes on a technology for mass production.