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Interview

Steven Armstrong, Ford

13 November 2017

The new President of Europe, Middle East and Africa, Ford Motor Company talks Brexit, innovation and industrial strategy

Q. You took up your current role in June as part of a new leadership team for Ford. What are your main priorities for the company in Europe?
A. To continue the transformation that we started a little while ago to become and remain sustainably profitable in the region.

There are other car companies that have decided Europe's too complicated for them. We've decided we can be profitable as a volume carmaker – and if we are, it allows us to continue to invest in the business.

I need to figure out how we're going to continue to be sustainably profitable against the background of Brexit and the other changes we’re making in Europe. It’s why we talk so much about the need for some clarity and stability. 

We're in one of the most competitive industries in the world, in one of the most competitive markets in the world. When you add indecision and uncertainty to that, it makes it very difficult for us to plan our business appropriately. 

Q. Is Brexit the main challenge you face in your role?
A. It's one of them and it's the one that we spend a lot of our time working on. But in addition to that we're going into a period where we're transitioning our business from manufacturing vehicles to becoming a “mobility” business [think connected vehicles, autonomous cars and solutions to increasingly crowded cities]. And we've got the change from general combustion engines to more electrified vehicles.

So we've got a business environment shift; a business model shift, moving into mobility; and a product shift, moving into more electrified vehicles.

Q. As a UK national based in Germany, what's your view on the strength of UK industry?
A. We love being in the UK. We've been here for a long time and we don't want to abandon one of the biggest markets in Europe. Our measuring stick for that is making sure that facilities here are competitive with the global facilities that we get compared with.

We've been here for a long time and we don't want to abandon one of the biggest markets in Europe

We've also got a lot of really smart engineers at Dunton. When we talk to the government, we stress the fact that industrial strategy needs to put in place the enablers for us to continue to invest in research and development here – and in state-of-the-art manufacturing facilities – so we can maintain that competitiveness.

We've got a great foundation here. If that strategy is rolled out appropriately, then there's no reason why we won't continue to invest here.

Q. At this year’s CBI Annual Conference you were on a panel discussing how globalisation can be a force for good. What is your take on that?
A. Ford as a company was founded and has grown due to its ability to access markets globally and to put its operations into those markets. I think that has been a force for good not only for the business but for the communities in which we operate.

We're still a family-related business and we’ve been named by the Ethisphere Institute as one of the top 10 most ethical companies in the world for the last eight years running.

Q. There is concern that SMEs can’t compete fairly at a global level. Ford obviously works with a lot of them in its supply chain, so how do you bring them with you?
A. Just two weeks ago we inaugurated our new office at the Here East facility in the former Olympic Park for our Smart Mobility business. We're there because that's right in the middle of where lots of start-ups have chosen to be. 

We recognise that however big we are, we can't expect to be able to invent everything and do everything on our own

We recognise that however big we are, we can't expect to be able to invent everything and do everything on our own. We need partnerships with established global players but also with small start-ups and SMEs who are generating much of that innovation. 

Q. Productivity and efficiency are massive issues that many companies are tackling. How are you dealing with them?
A. Our industry is well known for improving efficiency year over year and finding smarter ways to do business. Our new CEO, Jim Hackett, likes to think of it in terms of your business fitness – and that's not just driving efficiency in terms of lowest cost. It’s also how fit you are to be able to react to external shocks and changes that are coming.

You've got to have one eye on what's happening around you. And the fitter you are, the easier it is for you to adjust your positioning and adapt.

Q. For the car industry automation is nothing new. But how do you keep up with the latest technology that could change how you do things?
A. Automation touches everything that we do in-house, both in our product development and manufacturing processes. But automation is also directly affecting the products – with automated vehicles now on the horizon. 

The real secret behind artificial intelligence is the deep learning that comes from it, and turning that to good use in the products and the services that we're developing.

Q. There are obviously a lot of changes ahead. You’ve mentioned self-driving cars, and the shift to electric. How do you bring consumers with you, when their trust in the car industry has fallen of late?  
A. The key thing is to make sure that we clearly communicate what the reality is.

Our facility at Dagenham produces 500,000 diesel engines a year – and diesel has been very much under attack for their emissions. But the diesels we produce now are far cleaner than a lot of the vehicles that are on the roads today.

We're investing hundreds of millions of dollars every year in driving cleaner technologies

We need to communicate both with the government and with the public that we're investing hundreds of millions of dollars every year in driving those cleaner technologies and then our actions, such as our scrappage programme which gave our customers the opportunity to trade in their old dirty diesels, will help to underpin that.

Q. Ford’s mobility vision is an attempt to answer the increasing challenges of congestion, parking and air quality issues; changes in the way people move about; and the shift in emphasis to access rather than ownership. A lot of developments will depend on “smarter cities” and changes in infrastructure. So how do you foster the relationships with government and other stakeholders to achieve your ambitions?
A. One of the reasons we've chosen to put our mobility office in the Here East complex is because it’s close to one of our biggest customers – the City of London.

We see the city as a customer. We have a team that visits different cities around Europe and understand from the city what problems they have with their transport infrastructure and how Ford, with its traditional products and its future services, can help.

I could say I want to sell as many cars as possible but a century ago Henry Ford democratised mobility and put the world on wheels. Our job now is to figure out what this century's version of that is for Ford Motor Company. How are we going to improve mobility and freedom of movement through the city?

If we just ignore the problems, regulators will block us and our business will collapse.

We have to be just as entrepreneurial as Henry was and figure out how we're going to be part of the future.

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