By on December 11, 2017

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While General Motors has become progressively more brazen in outlining its plans for the future, Ford has kept its cards a bit closer to the chest. We do know both companies have similar long-term goals, but Ford has been (rather wisely) preoccupied, adjusting its fleet to meet global demand and ensuring production flexibilities that should prevent it from being caught off guard by an industry turnaround.

It’s interesting because, a little over a year ago, former Ford CEO Mark Fields was promising a complete evolution of the automaker into something called “a mobility company.” However, it now looks as if GM is the firm making a beeline toward alternative revenue streams and a new business model, while Ford takes a more measured approach. 

Some might argue that this comes down to Ford not having the edge in advanced technologies — and there’s some credence to that claim. But if you look at the interim period between today and the hypothetical future automakers love gushing about, Ford looks to be taking an intentionally measured approach. Whether it’s out of necessity or caution is another matter, though.

Both GM and Ford have been working on autonomous technologies and electrification for some time, with the former achieving more market success overall. Chevrolet’s Bolt has received high praise for being a desirable EV that’s easy to live with and Cadillac’s SuperCruise system is probably the closest thing any manufacturer has to autonomous driving right now — even though it isn’t.

However, Ford has placed a lot of focus on solving short-term problems before they evolve into something worse. The company plans to reallocate $7 billion from cars to SUVs and trucks in order to meet growing global demand. It also wants to cut $4 billion in engineering costs and $10 billion in material costs by 2022. All the while, the company has been very careful about keeping flexible platforms and global expansion in its periphery.

Meanwhile, Ford has also been working on all the same things GM has — you just hear about it less. Earlier this year, the automaker announced a substantial investment to build a new data center in Flat Rock, making it the second planned in Michigan. It also intends to have 90 percent of its global vehicles equipped with modem connectivity by 2020.

“Ford Smart Mobility and expanding into mobility services are significant growth opportunities,” Fields said at the time of the time of the announcement. “Our plan is to quickly become part of the growing transportation services market, which already accounts for $5.4 trillion in annual revenue.”

Of course, Fields wasn’t talking just about revenue sourced from ride-hailing, but the valuable data obtained by having customer cars perpetually connected to the internet — something GM has recently become very vocal about. But, even when we focus on the Ford’s planned ride-sharing services, it again seems like the cautious equivalent of what GM has in mind.

GM plans to use the Bolt as its go-to platform for autonomous vehicles in the near future. However, Ford doesn’t think going strictly electric is a shrewd move. Its strategy involves developing a new purpose-built hybrid for autonomous fleets, rather than retrofitting an existing model with the necessary hardware.

The downside is that the decision places Ford’s autonomous rollout a few years behind GM’s. But the automaker doesn’t see it as a loss. Jim Farley, Ford’s president of global markets, told Automotive News that a hybrid vehicle developed specifically for autonomous tech will be more capable overall. The Blue Oval is also one automaker that has relentlessly researched how the public reacts to autonomous vehicles.

“Others have made a big deal about verifying the technology; we think that’s table stakes,” Farley explalined. “We think what’s important is to verify the business model. The most important thing is that we execute well. We don’t want to get ahead of our skis.”

That’s a good way to sum up the difference between Ford and General Motors. The former is clearly taking a measured approach to most new technologies by ensuring it’s working on something without diving in head first. But it has suffered while GM gains positive attention from investors from what looks like a winning strategy. Then again, this could be a tortoise-and-hare scenario where GM finds itself confronted with problems Ford has already had time to troubleshoot.

Farley thinks powertrains could be one of those rough spots. “Anytime you’re not carrying goods and people, you’re losing money,” he said. “The most important thing is uptime and profitability. What we see is the [hybrid] is a much better cost-of-ownership model.”

The company expects its autonomous vehicles will be on the road for around 20 hours a day. Farley doesn’t believe battery-electric vehicles make good business sense because they would need to recharge multiple times a day, creating lengthy stretches of downtime and cutting into profits.

Ford is also looking at multiple ways to use autonomous tech, while GM focuses largely on nabbing fares. “We have to have a more diverse revenue model than ride-hailing,” Farley said. “I think in this world, you can hear all sorts of examples of getting out there and building a platform, but the business model — how this all comes together — is very important for us,” he continued. “We want to be production-ready, commercial-ready from day one.”

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33 Comments on “The Difference Between Ford and General Motors’ Longterm Strategies...”


  • avatar
    PrincipalDan

    Slow and steady wins the race.

    Cue EBFlex rant in 3… 2… 1…

  • avatar
    Wheatridger

    I’m glad to see Ford endorsing more hybrid models. I’m a latecomer to the hybrid sphere, only buying my first this year. But halving my gas consumption without range limitations is my choice, not pure EVs. I want be able to drive anywhere I want, whenever I want, and pure EVs can’t do that, and may never.

    • 0 avatar
      Lorenzo

      Elon Musk says: there will be charging stations everywhere! You’ll be able to recharge your car in 5 minutes, just like a gasoline powered car!

      In 1970 I drove a ’65 Impala with the 283-V8 and 2-speed auto. 12 mpg and a 20 gallon tank meant a stop for gas every 200 miles. A fillup took five minutes.

      So Elon is promising a return to 1970, sometime soon! Of course, in 1970, gas was no more than 36 cents/gallon in most places. That’s like $2.45/gallon adjusted for inflation, and doesn’t include increases in state and federal gas taxes. Where can you find gas at that price today?

  • avatar
    SCE to AUX

    This corporate rush to autonomous vehicles can’t really be consumer driven. When people realize they’ll still be liable in an accident, I can see them either switching it off or not buying at all.

    As for hybrids vs BEVs, I think both have a good future. Both are easy to own, but for different reasons.

    • 0 avatar
      PrincipalDan

      Autonomous vehicles are all about “optics” at this point.

      “Our investors, PR department, etc expect to see us investing in autonomous vehicles or they’ll wonder what’s wrong with us.”

    • 0 avatar
      Matt Foley

      “This corporate rush to autonomous vehicles can’t really be consumer driven.”

      Exactly 100% right. Ditto for the rush toward electrification.

      So who is pushing this so hard?

      • 0 avatar

        All those who believe carbon dioxide is air pollution, for one…

      • 0 avatar
        MrIcky

        I don’t know about who’s pushing autonomous vehicles, but I’d bet their internal statistics gathering says it’s important to tomorrows influencers.

        Electric vehicles on the other hand: China, Britain, France, and Norway have all set timetables to ban gas vehicles. Many states have proposed guidelines too that is potentially only an election cycle away from being a new law. But China has an unusual position in that they are big enough that they can really influence the electric market and autocratic enough to just say ‘make it so’.

      • 0 avatar
        raph

        Electrication is easy enough to identify. It’s a global concern with China and Europe leading the charge in the name of climate change although I’m convinced China is playimg the long game and after the world goes electric they will have the new “petro” currency in the form of mineral mining and refining capacity

        They have been making steady inroads into Africa for just such a reason I believe.

  • avatar
    brettc

    I like the concept of EVs but I think hybrid is the best solution for the time being until someone figures out a way to improve storage density in batteries.

    I’m sure it’ll come eventually, but for now with the lack of range and limited places to recharge, hybrid is still the smartest choice to me. That could be completely different 5 years from now though.

    • 0 avatar
      Scoutdude

      Hybrids are the future in the short, medium and maybe long term. Way too many people live where they could install a charger because they rent or own a Condo where there would be no practical way to install chargers and meter them. As range keeps increasing there will be no need for local chargers for those that actually have an EV so the public charging infrastructure won’t grow, in fact it is already shrinking as the stores that had them around here found out that they just weren’t used anywhere near enough to justify the installation. Fact is when you run to the grocery or drug store you are not going that far from home so chances are even the worthless Plug in Prius will get you to the store and back home.

  • avatar
    jack4x

    I’m no GM apologist. But the tone of this article seems to be in the pro-Ford/anti-GM style this site is sometimes accused of. Regardless of how their executives spin it, Ford has no Volt competitor, 7 years after that car went on sale, and no Bolt competitor in the near future. Of course they will downplay them, what else can they say?

    Bolt and Volt might not be the best selling cars in the world, but the CAFE standards and fuel economy ramp-ups are still coming. To me that means it’s unavoidable that plug-ins and battery electrics increase, and drastically. And right now it’s hard to argue the fact that GM has a significant lead over Ford in that department. I hope I’m wrong, since I’d like it if they both succeed.

    • 0 avatar
      EBFlex

      Ford is still trying to figure out how to make a vehicle that isn’t ridiculously heavy and is still relying way too heavily on the gas guzzling Ecoboost engines. This after they had to severely reduce the actual mileage of their most popular hybrids, the Fusion and Lincoln Fusion.

      GM has a much better strategy going forward.

      • 0 avatar
        Matt Posky

        I don’t think’s fair to say this is a pro-Ford article. While I’ve been highly critical of GM’s strategy (especially as it relates to data acquisition) lately, its working exceptionally well with investors and ought to make it a bundle of cash. It is also rolling out tech that Ford either cannot or refuses to put on the market. Ford definitely appears to be behind in the race toward “mobility.” That said, there might be worse places to be if there is a sudden shift within the industry. However, if things remain mostly the same, GM will be sitting very pretty by 2021 — whereas The Blue Oval will be forced to play catch-up. But the EV and autonomy push are largely artificial, driven by governments and manufacturers, so we’re not inclined to trust it entirely.

        Also, if you’re looking for more articles nailing Ford (or any other manufacturer) for corporate shenanigans, we’ve got them.

        • 0 avatar
          jack4x

          @Matt

          Thanks for replying. Maybe I’m underestimating the chances of a big shift in the industry over the next few years. My assumptions have been fairly steady but gradually increasing gas prices, gradual improvement in battery performance per dollar, and the current regulations staying about the same. Under those conditions, it sounds like we agree that GM is well positioned compared to Ford. Any sizable disruption to the market increasing oil prices would widen the edge.

          Even if the current administration relaxes or removes fuel economy regulations though, I think we are too far down the electrification path for much to change. Companies would be wary of investing too much into multi-year programs for inefficient vehicles when the next Democratic administration would likely reinstate the regulations. Especially when the rest of the world, and probably California/other blue states, would likely step in to regulate in place of the Feds. I don’t see a scenario where Ford’s caution/slower pace becomes an advantage compared to GM. In that hypothetical world, I suppose FCA would be the new kings?

          As far as automation goes, I do think companies are working to develop features faster than people demand them. There’s no sudden shock for consumers to instantly demand automation like the 2008 gas prices did for hybrids.

          @Scoutdude

          Those vehicles have much less electric range than the Volt and always seemed like minimal effort compliance cars. Maybe they are competitors but I wouldn’t call them serious.

    • 0 avatar
      NormSV650

      Watch as Toyota deems the twin power source of their hybrids go battery only too.

    • 0 avatar
      Scoutdude

      The Volt is a plug in hybrid and Ford has a plug in Hybrid version of the Fusion and they had one of the soon to die C-Max.

  • avatar
    Fred

    You can save a lot of money and improve reliability by not being on the “bleeding edge of technology.” More so with a car than computers and phones.

    • 0 avatar
      2manycars

      Amen. I’m not really interested in purchasing new cars, being allergic to going into debt particularly for something that will quickly depreciate. (Ditto for taking a big chunk of money out of the bank to buy a new vehicle on the one payment plan.) However if I were to change my mind on that today I’d stick with a standard gasoline engine.

    • 0 avatar
      carguy67

      The ‘let the other guy plow the road then come in with an arguably better product’ strategy has worked pretty well for Apple.

  • avatar
    stingray65

    They need to follow the Tesla strategy – build cool but totally unprofitable EVs with mediocre build quality and reliability, and then watch the stock price go up. When stock price flattens, announce even cooler EVs with a very aggressive introduction timeline, which will be even bigger money losers and not possible to build with current technology or plant capacity, and watch stock price go up even more. Repeat as needed.

    Ride sharing autonomous vehicles should be even better, because they could lead to major reductions in car sales and hence be incredibly unprofitable while leading to major new corporate liabilities when they start crashing or getting hacked. Just what is needed to send stock prices soaring.

  • avatar
    Gardiner Westbound

    “It also wants to cut $4 billion in engineering costs and $10 billion in material costs by 2022.”

    How will automobile quality be impacted when the lowest cost bid is not low enough?

  • avatar
    AVT

    Looking at companies beyond the domestics, ford’s strategy seems to align with toyotas standard operating process. Only bring to market what the people will buy en mass. Financially I think both will be just fine. That being said, I think a smart move for both would be to expand in the world wide market beyond just India and China. You want to even get close to matching what toyota makes in revenue in one year, you’d have to do that. Both gm and ford need to work on the efficiency of their production models. Unit for unit, it costs toytoa substantially less to build one.

  • avatar
    stuki

    As a general rule, in competitive environments, those with something useful to say, shut up. Leaving the open mic to the charlatans. Those who can, do. Those who can’t, talk about doing.

  • avatar
    turf3

    Isn’t GM’s real strategy to sell lots of blingy Buicks to the Chinese nouveau riche and put the bare minimum into everything else?


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