Ford CEO issues warning on Chinese auto makers
American car companies are at risk of going out of business as Chinese brands rise, says Ford bossThe News
The boss of Ford Motor Company warns that the rise of Chinese auto makers could spell the end for American vehicle manufacturers, calling them an existential threat. The irony? He drives one.
The Key Details
- Ford CEO Jim Farley says Chinese brands could put American car makers out of business
- Huge tariffs on vehicle parts from other countries costs Ford billions
- Farley admits to driving a Chinese-made EV, the Xiaomi SU7
The Finer Details
Speaking to CBS Sunday Morning, Ford’s chief Jim Farley noted the similarities between the rivalry it has with China today and the competition it faced in the 80s when Japanese car brands were gaining popularity.
“Oh I think it’s exactly the same thing, but it’s on steroids,” Farley told CBS.
“They have enough capacity in China with the existing factories to serve the entire North America market, put us all out of business.
“Japan never had that. So, this is a completely different level of risk for our industry.”
The Ford boss said the company is paying billions in sourcing overseas parts for its vehicles, because manufacturing those parts in America is too expensive and would result in increased vehicle costs.
“There are parts, fasteners, wiring looms from other countries. And we pay our tariffs, sometimes up to 70 per cent on those parts,” he said.
That’s giving us a $2 billion bill – it’s about 20 per cent of our global profit is going away in tariffs.”
When asked who’s footing the bill, Farley replied to CBS: “the company, right now…and in the end of the day, it’s all these workers.”
In May 2024, the US imposed a 100 per cent surcharge on Chinese-made electric vehicles (EV) and aside from a few Chinese-built models from Buick and Lincoln sold in North America, there are no big-name Chinese brands like BYD or GWM selling vehicles in the United States.
Even though, Farley admitted to driving a Chinese EV himself because “they’re the competition” and can see why Americans would want to buy them.
“I drive an Xiaomi SU7; high quality, great digital experience.
“To beat them, you have to know them.”
The Road Ahead
To counter the Chinese EV attack, Ford has shifted its strategy to offer smaller and more affordable EVs, as well as adopting popular nameplates from the past, including Capri.
Keeping American manufacturing alive and Americans employed is Farley’s top priority.
“What I care about is, is that transformation of Ford. I’d like to be able to come back here in 20 years, if I’m still alive, and see all the people, that they’re still busy.”
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