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00:00I talked earlier today with Ford's CFO, John Lawler, about managing his traditional business while moving into EVs. Well, when you look at us right now, we're in the midst of a double transformation. There's things that are going really well. We're number two navies in the US. We have a great product lineup in that space. Lightning is is sold out our F 150 electric pickup. Our software business is moving forward. Subscriptions for our fourth pro software services grew at over 70 percent last year. So there's parts of the business that are going really well. And then there's parts of the business that need to improve and aren't performing where they should be. And we've talked about that yesterday in our earnings calls. We feel that we left about two billion dollars of adjusted EBITDA on the table that we should have delivered and we didn't. And so where we are being hit with supply chain issues, we're being hit with manufacturing issues, logistics issues, et cetera. And there's areas where we need to improve. And that's what we're working on. One one set of issues. These is supply chain, what you can do to improve that. There's the cost issue overall. You get costs down. Jim Farley earlier had a target of three billion dollars in savings. We heard yesterday that, in fact, that number is going to go up. What's the new target and how are you going to reach it? Well, we're looking at two, two and a half billion dollars plus in 2023. And the new target is going to be based on where we are competitively. So we have a position in the marketplace today. If you just take our cost of goods sold and look at our cost of goods sold as a percent of revenue and compare that to our competition, you see that we have opportunity. And as they improve, we need to improve more. So it's not a stagnant target. It's a moving target. And what we need to do is we need to be competitive and we need to be best in class in that ratio. So that's what we're moving towards. And we're gonna do it is we're going to get back to basics. You know, we know how to do this. This is what we've been doing for over 100 years. So we're going to improve our operations. We're going to a lean focus. We're going to improve the core ability of our teams to drive waste out of the system. We're bringing in new talent that's helping us do that. We're going back to our roots. We're going to be more simplistic in what we're doing from a standpoint of complexity, et cetera. So there's opportunities across the board in our industrial system. We've got talent now, both existing Ford talent and new talent that's showing us, you know, bringing us back to our roots and showing us new ways to do it, which are in some ways the way we used to do things. And that's that's encouraging. So there's a lot there for us to lean into and we just need to get after it. Does that mean fewer people and indeed less production? Because I think I saw in January your inventory to sales ratio went up to 2.5. Are you concerned about excess inventory at this point? Well, that's an opportunity for us. Absolutely. Inventory did go up and that's part of our supply chain issues as part of our logistics issues. So, yeah, there's opportunity there for sure. Everything's on the table. What I would say is that we have to improve our productivity. That doesn't necessarily mean that we're going to cut the number of programs where we're we're designing or the output that we have. We just need to do more with less. And that's the life blood of a company, right? You have to drive productivity improvements. And we're not where we need to be. And so we're gonna get there.

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Ford CFO Lawler Says Job Cuts Are 'on the Table'

Ford CFO John Lawler says Ford is "getting back to basics" and needs "to do more with less" during an interview with David Westin on "Balance of Power." (Source: Bloomberg)

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