Gadgetory

well hey this is Josh from the verge earlier this year we had a chance to talk to Alan Mulally the CEO of Ford at CES and afterwards he had a lot of really fascinating stuff to say that we didn't get in that short interview so he's here in New York and we've got another chance to sit down with him and talk about where he sees technology going so check it out Alan thanks so much for joining us glad to be then we got you for a second time which is a magical and I want to talk about you a little bit before we talked about the company and what you guys are doing you you began your career as an engineer you worked at Boeing and you worked on cockpits so how does it how does a guy go from an engineer Boeing working you know getting in your hands dirty doing real design work - CEO of four how does that happen well you're absolutely right Josh why my dream was to work for Boeing and design commercial airplanes and I had a chance to contribute to all the airplanes 727 to 737 the 747 I love going through these slowly 75 seven seven six seven I had to work on that triple seven and I had the opportunity to serve as the engineer in charge of triple seven and in the 787 and it was so neat because what I really found my love was the fact that the airplanes got people together around the world and we found you'd find out that people are more the same than different and we worked together for good of all of us so I thought I was going to maybe had one more airplane that was in contribute to that would be a replacement to the 737 and then I got a call from Bill Ford and bill explained the situation that Ford he explained that he needed and wanted help and what I consider coming and I thought about it and we discussed it as a family we decided to come and in the end Joshua I felt like I was being asked to serve a second American in global icon and it was important for manufacturing it was important for the United States of America for the economy for energy independence and security and sustainability so I decided to come and to your question people were very concerned at the first about what didn't mean you know for an airplane guy to be coming to the automobile industry and right I think you were going to try to put wings on it well and it was in trouble and and one of the early press conferences one of the journalists raise your hands that mr. Mullaly with all due respect you know the car business is very very sophisticated starting with the products and so what does this mean you don't know cars and I said well I sure agree with that cars are very sophisticated the aerodynamics the integrated electronics the materials the systems integration the quality of fuel efficiency safety very sophisticated and matter of fact a novel has nearly 10,000 parts I just might point out that the triple seven has four million parts and it actually stays in the air and after that I never got another question Borya challenge your engineering job well I think it's odd that someone would ask I mean a plane is massively complex I mean you got to get them off the ground you don't have to worry about that with cars because cars you want to keep them on the ground is your goal so you went from this career being very involved in the in the minutiae of the technical minutiae into overseeing this this business and does that inform how you approach it I mean the guy scum in your office with a design and do you start to say well you know what this thing should actually turn this way and maybe we I mean are you hands-on now do you get into the engineering suffered you you try to let let them do their thing well I would consider myself I think Joshua as hands-on but I've come at it a little bit differently than the way you described it because the similarities between commercial airplanes and automobiles are striking you need have a point of view about the future whether the customers really want what do they really value you know how do you bring those to the market in an effective way and so maybe the neatest thing that I got I got a chance to contribute to when I came to Ford was what is our point of view about the future of Transportation what a customers really want what do they really value and we ended up with really five main attributes that worldwide the customers really really care about one is quality the second is fuel efficiency in low co2 the third is safety the next one is smart design like sync and MyFord where you can be connected in a wired world and of course the last one is the very best value did you put is this an engineer's cap thinking we've got identified the problems and just get right down to it I mean it sounds like you had to take a look at all these a wide variety of asks and say well we've got to find a way to quantify that you got to find a way to talk about okay now let's talk about that that's a really good point Joshua because Ford before I came it was okay to be just competitive I mean they make competitive cars they were good but there's not a brand promise or a commitment to be best in class and to your point you can measure everything versus a competition right and you're either best in class or you're not and so we made a commitment as a team that every vehicle from a fiesta all the way up to an f-150 every time you want you got that from 40 it would be best in class in those four characteristics and then that data sets you free you know exactly what the competition is doing and and now you can count on getting the best in class from the board so what was the first thing that you did it forward that you thought that what was the first car the first product I rolled off the line that you thought this is the thing that we've got to do all the time now was there you know what's your first most you know the thing that you were most sure about well a couple of them that first one is so was so interesting because it was the new Taurus as you know when when we were designing the triple 7 at Boeing Ford was designing the torus as I know as of course in the tourist asset that Taurus was you know eight years the number one vehicle the United States we made seven million tour I right and we made this a referral of a cure all right and so when I I knew about it because Don Peterson was the chairman of Ford but he's on the Boeing board so when I was leaving the design after time triple7 he told me about the Taurus he invited so would you like to meet him I invited him to see how we compared the technology the process is the working what year is this this is 1981 ounces and sack back so I met all of them and they were fantastic and the talented people and making a great product and so when I got the call from Bill I thought you know I'm just going home I know all about it so I arrived I want to see all the products they line them all up and I'm walking down reviewing them and there's no tourists I said you guys where did the tourists go I mean this is the most popular cars with what ever had they said well we made a couple look like a football I didn't sell very well so we stopped it I said this was one of the most fantastic brands in the world I said so what do you want us to do and I said well how long does it take to make a new tourist and I said maybe four years I said let's make the very best tauros ever and let's do it in two years and so the new tourists that you see now is that design but the most important thing for the Ford team was that we're going to have this consistency of purpose we're going to keep those name plates and every year we are going to improve them so the customer knew exactly what to expect from forth so the tourist is your that's the star the first one of your Ford so let's talk a little about the future we're talking about the past but I want to talk about where the present in the future you're obviously investing in electric this is the trend now right everybody's making hybrids or electric vehicles you've got you get a smattering is electric the is it the real thing or is it the in-between thing for us right now because what we're going to talk about internal combustion because I know you have some strong thoughts on that but electric isn't where we're going to stay is it that doesn't seem like the place that we're all moving towards as an endgame is it what do you think I think Joshua is going to be both and even more there is such an opportunity to improve the internal combustion engine today whether it's petrol or where there's diesel and you really believe it you said that last time we talked and I did a little I'm going to challenge you just a tiny bit I did a little research and on average we were looking at some stats and passenger cars get about 10 miles more per gallon now than they did in 1980 today so we've gained on average 10 10 miles per gallon that doesn't seem like in 30 years like we've gone that far with internal well let's talk people just fall asleep for the last you know 25 years I mean I'm curious let's talk about this a little bit more do you remember in 1975 we had the oil embargo and we're all on born yet I'm sorry but I read about I heard read but that isn't yes I think it's well documented something I've heard yos a real hassle and if the car companies as people decided that my gosh you know the most important thing we can do is increase increase our fuel efficiency of all our vehicles so we actually pass laws to have slopes for improvement of fuel mileage and in since that time in 1975 we have improved the fuel mileage of cars by a hundred and ten percent and by trucks by over seventy five percent and based on the enabling technology just you guys are the industry of the industry as a whole okay and Ford right there on the leading edge of that and back to the internal combustion engine with just direct fuel injection and turbo charging we can prove the fuel mileage by nearly 20% by reduce the co2 by nearly fifteen percent so you're going to see a lot of improvement with a turbo question two plus that's the most affordable technology right now to improve right now to your point we're also making flexible fuel vehicles whether it's ethanol or biomass or whether it's natural gas we'll have those vehicles also available the reason is that we know one right now can predict the endgame on the enabling technology then after the alternative fuels I think our electric vehicles okay so you can make it more affordable yep can make them more fuel-efficient you can kind of make the modular in the way that you make up the quantities that people want me right because we can move the production line right so you see if there's a demand for all hey we need all electrics in this region or whatever you sell you can ramp up production on that it's easier because you've got these shared pieces exactly okay so but in a city we're in New York and we talked about this what we actually had a dinner and I asked you about this and I thought your answer was really interesting we're in it a mega city right where it's highly congested you really can't put more cars in the road we already have too many cars as it is how does Ford in a world let's say in a world where we've got a sprawl of cities like this and that is kind of where we're moving you look at places like China and absolutely in other parts of the world that are starting to really ramp up this you know I'm more modern more congested City where does Ford live there where does Ford fit into that you know if you can't go by a car well they can't get a car on the street this is really important because as you point out not only the United States but in the real high growth countries like in China like Chongqing we have a tremendous operation in Chongqing and it's a city of 35 million people yeah and what we believe is that cities are going to become even more and more prominent and we need to be part of rapid transit personal mobility how do you how do you move around not necessarily in a separate vehicle and some of the things that we found very interesting like in Hong Kong the business model that they're developing is that you have one way of charging you can go from bicycles for the ferries to the cars to the subways that the idea is put together a system where you have your personal mobility but you can use all the different ways the ways to move around how Ford plays in that we're not sure as a business model yet but we know that we're absolutely committed to personal mobility where we start you want to be there and we want to be there and you would make you would make mass transit and that's something that you guys are working on absolutely and what's really important is that we we Josh were the citizens of the world are going to decide that because you know just like we have a couple of kids live in New York City and they love the subway and they love moving around and to your point when they want to move outside then you can time share on cars or you know lots of ways of moving around so we really want to help be part of that solution but the vast majority the world is it has the freedom to move around on the highways right well I mean America's big right not everywhere is like New York we really could but before coming to cities and we've seen that they're kind of starting to gravitate more towards these you know large cities so there have to be solutions that go beyond better sister solutions that allow us to move our pickup truck that's obviously absolutely so you talked about technology roadmap earlier and a hydrogen so that's what I want to ask about so if electric is what we're doing now and you mentioned ethanol I think and you know some of the biofuels biofuels which which are there but they're not the infrastructure isn't there and it's not like everybody's decided that's the thing earlier we talked about hydrogen off-camera we're talking with hydrogen's tell me what hydrogen means to you guys as a this is your business you need to find the future fuel because look oil is I think we all agree and they maybe you don't but it's a finite resource right we don't in terms of oil here we got to move to something else and you think hydrogen's is that place you think that the only the long game Josh what it really could be and remember it wasn't very many years ago where most of the technical community believed that hydrogen was going to be the next answer well you know clearly you need to generate the hydrogen clean you need the infrastructure for the hydrogen you need a cost-effective batteries to store the electricity that comes out of a hydrogen vehicle which also need very cost effective fuel cells to help generate the electricity so if you think of the electric vehicles today what the hydrogen would add to it is you have a hydrogen tank on the vehicle you also have a fuel cell so you take the hydrogen combine it with platinum water comes out the tailpipe electricity goes over the battery you need a very efficient cost-effective battery so you need everything you need with electricity today plus a breakthrough on the cost and efficiency of that fuel cell plus the infrastructure now having said that that combination of the use of electricity plus if you generate the hydrogen clean is a very compelling vision now the cost and economics are going to determine everything so that's why we are investing heavily in cost-effective fuel cells as well as a cost-effective lighter weight batteries and then I think the between public and private partnerships will come what's needed to develop the hydrogen as a and the structure is needed so I think it's very compelling you think we're going to get there I think it's a real possibility and what's it would give me a time frame do you have a vision of it you guys must be its if you got a roadmap yep it's further out in like two ten years twenty at least because what we really need to do is make the breakthrough in those components and that's what we're focused on because that's what we can contribute to right all right I got a couple more shouldnít I know you're very busy schedule my first question is your view on these are some big ones so the environment I mean as an automaker you guys must get more hell than anybody when it comes to the environment when it comes to pollution I mean what is your take on I mean where do you in in Ford's list of values you know you've got obviously have to turn a profit if you want to make cars that people love and want to go and by where on the on your you know I'm sure you've got many other priorities where on your list of priorities is helping to preserve or protect our natural resources the environment I mean where do you where do you stand on obviously it's important you're not going to tell me it's not a priority but when you're making these decisions how often is that or is that coming into play are you always thinking about it like give me some of the mothers have behind me well in view you're going to find this very interesting is that it is right there at the top of the key priorities for us as a business I'll come in a couple different ways remember when we talked about what's important to the customers worldwide it quality fuel efficiency safety and smart design so right at the top as a reason to buy is fuel efficiency miles per gallon and low co2 that's what people care about remember we've taken a point of view which I think most people share that we all are going to pay more for energy going forward as the whole world grows so this is really really a high priority which is why we're investing so much in this enabling technology roadmap but I believe in further than that Joshua and that is the companies that are gonna that are sustainable they're going to continue to make products that people want in value are also going to be the ones that do it using less resources and less time so everything about our operation is continuously improving to use less water less energy less materials less changer and we rework so that we that we make the vehicles that people want but we use it using less time and less resources so in a fundamental way the essence of the fundamentals of our business is sustainability I like to even further than that the one of the things that has always excited me and I have a passion for it in automobiles or in cars is that manufacturing with a big M is part of the solution to the big issues that you are describing today economic development for all of us because if we don't economically grow we can't provide the wonderful careers and jobs for people to grow to is energy independence and security which we all know is really important to all of us the third is environmental sustainability so I would propose to you that the automobile industry and Ford in particular the intersection of those three big issues are something we are very proud about because that is the foundation for us to run a successful business and you mentioned manufacturing you're talking about jobs right I mean you're talking about the way these things are made nicely I mean talk about the way they're made both with the materials and the processes but also the people absolutely so I mean we've as a technology news site we've covered a lot of sort of the outsourcing of the you know the things that the outsourcing of these jobs to get the things that we want can we is manufacturing something that doesn't happen in America anymore that has increasingly not happened in America do you do you think that we can return to America as a country that's known for its manufacturing because it seems like in the last I mean correct me if I'm wrong but it seems like in the last you know what 50 25 years at least we're not known as a place that builds things we're known as a place that ships jobs off things built elsewhere you're absolutely right and to answer your question I mean that has been the recent history and answer your question there is no reason that we can't compete with the best companies and countries in the world by designing and making things that's a decision that we make as a country and just to give you a little perspective on Ford the most important thing again is are you competitive and remember it wasn't very many years ago where our cost structure was such where we couldn't make vehicles in the United States make them profitably and we were actually moving them out of the United States to Mexico to everywhere else well one of the things that I when the reason I came to Ford was was to work with all the stakeholders including the unions including everybody and what does it take to create a effective company that has a cost structure in addition to great products where we can make them right here in the United States and what we have done over the last five years is I'm just so pleased for all the stakeholders because we have competitive wages competitive benefits now because everybody worked together on it we are now bringing jobs back in the United States that the technology roadmap be described in in Michigan assembly we are making petrels hybrids plug-in hybrids and all-electric United States on smaller vehicles and making a reasonable return so we we know we can do that now I'd like to back up just a little bit on your question to the other thing is is the United States competitiveness that means we also have to have free trade agreements around the world that makes sense and that's why you watch this takes such a strong stand on the South Korea free trade agreement that we really do open up the markets around the world cuz we can compete if we have the markets to serve also that's why we need to have the the markets determine the currency and the exchange rates and not have that set by the governments and not target different countries with different products but we do that and we work our competitiveness then there's no reason that we can't compete with the best world and Joshua or one of the neat things is that when you look at the research and development in the United States and around the world nearly 70 percent of all the research and development this for the future for all the products and services we all want and value are associated with manufacturing so I think I don't know of one country ever that's had a sustained period of prosperity that didn't have a strong healthy competitive manufacturing base and you think we can you think that's going to we can retain we can we can do it and we are we are leading by example a show it can be done we're going to be hiring twelve thousand new employees or the next couple years we're bringing work back in the United States because we're competitive if we're not competitive the work should go to somebody else we are you know we believe in the marketplace allocating precious resources but there's no reason that if we decide to do it and work together that we can't be competitive but do our workers that's what I want to know and I think you're a man in the position to tell me do our workers have to accept you know look when you're outsourcing jobs not you but I mean in general you're getting cheaper labor you're getting people who are going to work harder because they need to desperately need those jobs and they've never had them before can do we have to say to workers in America look this isn't going to be a picnic you know you're gonna have to really it's going to be lower wages it's going to be longer hours is that the answer no I mean can we create an addition great American work environment that I think that you know that we built this country on and also compete on the cost of that of that labor and the cost of building I thought I think we can have it we can have it all it doesn't necessarily mean that we have to have the lowest wages but we need to be the most productive and that's where our school system our ingenuity the enabling technology everything about it starts with us with creation right and innovation and we can and we absolutely can have a higher wages we can't be way out of whack we have to be you know somewhat competitive right but they're real competitive is are we using our enabling technology and innovation and working together to produce products that people really want and value more creatively and more effectively than the competition so what's the biggest roadblock right now to you as a as a man in your position what's the roadblock you look at you wake up every day and you think if I just clear this one thing out of the way we can we can change things well in Ford's case I think the most important thing is that we just a laser focus on the Ford brand promise as we covered once before remember four had become a house of brands we had asked Martin and Jaguar and Land Rover and Volvo and Mazda and so the consumer didn't know what Ford stood for well now all those are gone where the laser focus on that Ford brand so your roadblock was you need to define Ford that's into a consumer execu and you think you've done that you think you've cleared that robot oh absolutely we when we started out five years ago in the United States for many of our vehicles for the smaller ones we were a discount brand because we could make cars affordably right well now we have closed that gap with world-class competitors and they now value the vehicle on the value per vehicle plus our cost effectiveness as we're competitive as we've talked about so again that consistency of purpose and and that brand promise and the customers eyes that they know what they can get from the Ford Motor Company and that consistency of purpose is the most important thing that we continue to do interesting all right final question yes sir I recently interviewed Neil deGrasse Tyson who's an astrophysicist and just a genius basically and we talked about igniting or reigniting this this kind of jobs in America and the idea of innovation in America and and his thinking is that we need to we need be back in the days of space travel and getting out and exploring the galaxy and thinking about you know and through the you know we want to go to Mars when you go beyond Mars we're going to innovate we're going to create new technologies and new jobs and it's going to reignite America's imagination and what is your what is your take on that well I have a take on that Joshua so 19 early 1960s I'm in high school well first of all I agree but I want to tell you a personal story about why I agree so much so I'm in high school and President Kennedy addresses the nation on TV and he says the nation that we are going to go to the moon and the reason is that we're going to learn so much the technology the innovation that how to do it the unknown that the new frontiers but we're going to find so much and learned so much about ourselves and what we can do and what we can do by working together on something that is so big and so exciting so I switched from a liberal arts curriculum to calculus and physics and in the science classes and I decided that I I want to be part of that compelling vision I was so compelling because it's going to make it was going to make such a big difference so I enrolled in the University of Kansas in aeronautical and astronautical engineering I joined the United States Air Force and started flight training to become an astronaut and everything was going great and and then some of my flight tests I found out that there were shades of grey that I couldn't see and the first landing on the moon was going to be a manual landing and you had to be able to see all the craters and the shades and so I just didn't have the right stuff and at the time you had you had to have the right stuff to go to the moon and so they gave me the choice of stayin in the program and maybe going for a later flight or I could go you know continue my studies at the University of Kansas and of course I was devastated but it's such a compelling vision and I had lined my life to support it that I was very fortunate that my thesis advisor was the head of aerodynamics of the Boeing Company and he said Alan eat another compelling vision associated with really a big deal things that make a difference as you could contribute to commercial airplanes and he was working on some research work for Boeing he invited me to join him on the research work he took me to Seattle and I saw Emerald City that doors the Boeing factory that 737 and I knew I found my next compelling vision to help make commercial airplanes to get people together around the world and 37 years at Boeing and I had a chance to contribute everyone and then Bill Ford calls and another compelling vision a second American global icon a person opened up the highways to all mankind that made life pleasanter you know more worthwhile meaningful and the lifestyle we have today so his point is so important that we all want to make a difference we all want to want to be associated with a compelling vision and use our talents and working together to do things we can't do by ourselves so I think he he is making a really really good point that's incredible I had no idea we got a basically an astronaut running for it at this point I mean it's close but as close as you can get without actually going right so that's that's incredible Alan thank you so much for joining us that that's great thank you thanks a lot you