ClimateOne

 

Greg Dalton: The number of automobiles in the world has forecast a surge from about 800 million today to somewhere between 2 and 4 billion over the next 40 years. To some, that presents a huge business opportunity and increased individual freedom. Others see gridlock, social stress and environmental disasters. With growing ranks of middle class consumers in China, India, Brazil and other emerging economies, what is the future of the automobile? Can personal mobility be decoupled from the burning of fossil fuels that is the stabilizing air stability to support life as we know it? Can American auto companies keep up with their international competitors?

 

I'm Greg Dalton, host of Climate One, the Sustainability Initiative here at the Commonwealth Club. And over the next hour, we'll discuss cars, fuels, and technology with our live audience at the Commonwealth Club.

 

Our guest is an icon of the global auto industry. William Clay Ford, Jr. was CEO of Ford Motor Company from 2000 to 2006, and today serves as executive chairman of Ford, which is the 25th largest company in the world. Please welcome Mr. Ford to Climate One.

 

[Applause]

 

Greg Dalton: Thank you for coming.

 

William Clay Ford, Jr.: Thanks for having me.

 

Greg Dalton: Well, let's begin with the -- you wrote a letter on sustainability in June of this year and you talked about the future of automobiles in the world where there's going to be 2 or 4 billion automobiles and you talked about urbanization and a more holistic view of transportation. What's your vision for that?

 

William Clay Ford, Jr.: Well, you know it's interesting. When people think about the auto industry and they think about the environment, mostly everybody has been focused on CO2 and fossil fuels and the effect that that has both on us politically and also environmentally. And that's absolutely an appropriate focus. But I started to realize is this other looming issue that was lurking out there that nobody was focused on and that's what I've started calling global gridlock, because if you just do the math and you just did some of it, in our lifetime, the world's going to go from about 7 billon people to about 9 billion people.

 

While that's happening, the number of cars is going to from just under a billion today to -- as you said -- 2 to 4 billion. There's another phenomenon that's happening at the same time, which is people are increasingly moving to cities. So, you're going to have 75 percent of those 9 billion people living in urban areas. And how are they going to move? I mean it's -- it's a huge issue and it's an issue today, you know, mostly outside of the U.S. although I suppose if you live in Los Angeles and other places, you'd say it's already here today, but certainly not to the extent that it is in many parts of the world, particularly Asia.

When I -- you may have seen last summer they had an 11-day traffic jam in China, which is, you know, incredible, and yet it's only the tip of the iceberg. So, how is the world going to address this issue and how are we as mobility providers going to provide solutions and not be part of the problem? And so, you know, I'm not trying to turn attention from CO2 and fuel economy, but I think we're on a good road there. I mean we've got a lot of battles ahead of us and a long way to go but I can see a game plan to get us to a -- an environmental answer that people are going to be happy with -- that I'm going to be happy with. But put another way, even if we clean up our cars, 4 billion clean cars is still 4 billion cars and. And so, we need to solve that problem, and if I could take just a second -- and I don't want to be too long-winded, but just to say a couple of things that we're doing in that regard --

 

Greg Dalton: Sure.

 

William Clay Ford, Jr.: …'cause I think it's interesting. Technology is really -- can be what sets us free, and a lot of that technology is being developed here in California, particularly Silicon Valley. We at Ford are -- we just put out a fleet of demonstrator vehicles with vehicle to vehicle technology. What that basically does is if your car is five miles ahead of mine in traffic and you had a traffic jam, it will tell my car immediately -- well, tell all the cars around it immediately, and then the car could automatically re-route itself. We just introduced a concept car called Evos, which is connected to the cloud which can not only it can check your blood sugar and your blood pressure and all those things, but you can also anticipate what's ahead, so if -- and it can change your car -- so for instance if you're in a nice weather but two miles ahead it's raining, your car will know that and it will start to adjust the suspension, the steering and the vehicle dynamics so that you'll be, you know, well-prepared -- your car will be well prepared when you hit that. That's all ready for primetime, that kind of stuff.

 

A little but further ahead though is vehicle -- the infrastructure communications so that if you think about traffic jams, you can -- your vehicle will be able to talk to all the intersections so that traffic lights can be timed in real time. If you -- today, 30 percent of all fuel burned in major cities is burned looking for parking spots. It's an incredible number but it's a true number.

 

Greg Dalton: We know that in San Francisco for sure. [Laughter]

 

William Clay Ford, Jr.: Yeah. I mean you do and you know with it in other cities. So now, what if your car can -- when you leave home, pre-reserve you a parking spot, know exactly where that spot is and you drive right to it and get out? That will be a huge help for global congestion. And these are all technologies we know about today but there's going to be a tremendous surge of innovation that's going to help deliver this, but it's going to actually require something beyond technology. It's going to require a level of coordination that we've never seen before. Coordination not just be between cars talking to each other but every form of transport -- trains, buses, subways, cars, Segways, bicycles -- it's all going to have to be one interconnected network. It's going to have to be a network where in some cases, one ticket will get you everything. I know you've got some of that here already here in San Francisco, but again that's going to have to become much more sophisticated, but really it's going to require all the different forms of transport to work together in an urban environment to make it all work. Cars will be a piece of that puzzle, but it will not be the only piece.

Greg Dalton: And one piece of the car puzzle is mobility as a service. I know you've talked about Zipcar whether a Zipcar and car sharing -- is that a threat to automakers or is that an opportunity?

 

William Clay Ford, Jr.: I think it's a great opportunity. I don't know how the automakers are joining but it's funny, you know, when I met you at that same --

 

Greg Dalton: Conference, yeah.

 

William Clay Ford, Jr.: -- conference then, was Scott Griffith, the CEO of Zipcar. And I heard what he was saying and I thought this is really cool. So, I got to know him, in fact, I went out that night, we hung out together that night and I was really excited by the business model and I thought this is really interesting. So we just announced, I don't know, a month ago I think, a partnership with Zipcar that we are going to provide 253 college campuses. Ford and Zipcar partnering across the country. So I think it's a really great opportunity and it's a really good thing again for urban mobility because people don't have to own cars -- they want to have access to cars. And so the Zipcar model, I think, is a great one.

 

Greg Dalton: And you don't see that as a threat that well, you're going to sell fewer cars 'cause people don't -- they rent, they don't buy.

 

William Clay Ford, Jr.: Look, it's going to happen anyway, whether we like it or not. And so -- so we might as well like it. [Laughter]

 

Greg Dalton: There's one interesting here in San Francisco called Relay Rides which is a different model where --

 

William Clay Ford, Jr.: Yes.

 

Greg Dalton: -- individuals -- think about a car, you buy it and it sits there idle, depreciating, you're paying insurance, it's not used. Eighty percent of the time you can rent it out and get some revenue off your idle car, pretty cool.

 

William Clay Ford, Jr.: I'm familiar with this, very cool. And I think all these new applications for transportation are all going to be needed and I think if, you know, if we're talking five years from now, we're going to be talking about stuff that we've even begin to think about, but I do believe that the technology is really going to be through the Great Liberator in all this. Not -- I mean I've outlined what some of those technologies are, but the rate of change in technology is quite staggering. And just the notion of bringing the cloud into the vehicle, there are issues with that. There are privacy issues and things that still need to be worked out. But on the other hand, it can be really, really powerful.

 

Greg Dalton: And how about young consumers? I mean some of these things are -- car-sharing comes natural to college campuses, et cetera. How do you think young consumers, I mean they used to be -- car was a tool of social mobility. Now, if you ask people if they'll give up their car or their cell phone, they might give up their car and keep their cell phone.

 

William Clay Ford, Jr.: Yeah. I think there's this whole model car collaborative consumption that's out there in the next generation, and cars will be part of that. And so -- and I think that that's something that's the next generation is very comfortable with, and I, you know, and the cell phone and the iPad, and the -- and the computer, are all now seamless with the car. I mean you know, your car can, you know, in this demo vehicle that we've built called Evos, I mean it's connected to your calendar. So your car will actually, you know, know if your meeting's running on time that you're going to or whether -- I mean it's quite remarkable when you start to bring the cloud into the vehicle.

 

We have to do it in a very thoughtful way though, because, you know, you can overload drivers, obviously that's not a good thing for driver distraction. You can give people too much information so -- but the point is, there's no limit to what can be done, and I think it's then up to us and customers to do it in a very thoughtful way.

 

Greg Dalton: Another thing coming in to the car is electricity and you have said that about by 2020, a quarter of the cars you sell will be electric. How are you going to get that?

 

William Clay Ford, Jr.: It's a really good guess, by the way. I have no idea where that -

 

Greg Dalton: No one really -- [Laughter] sounds good to us. No one knows, yeah.

 

William Clay Ford, Jr.: The -- well, I see that's the thing. I've learned long ago that predictions in our industry usually don't pan out and -- but I want to say this, you know, we are making bets on electric and in fact, you know, we have an all-electric Focus still coming this year. We have plug-in coming next year. We're actually choosing this to be something a little different though with our electric vehicles. A lot of our competitors -- or some of them anyway -- are doing purpose-built vehicles. We actually decided to electrify a mainstream product called the Focus. And the reason we did that is, you know, Ford's history, my great-grandfather believed in creating transportation for the average person and not to make it kind of an elitist thing. And so we felt that by electrifying a mainstream product like the Focus and making it affordable and also making it flexible. So -- because coming down the same line will be an internal combustion 40-mile-per-gallon Focus, a --

 

Greg Dalton: Hybrid?

 

William Clay Ford, Jr.: -- pure electric Focus, a hybrid off of the Focus platform, and a plug-in off of -- and that way, the customer decides, "Which one do I like best?" And whichever way decide, we can flex up and meet that demand.

 

Greg Dalton: So, General Motors and Nissan have been first to the market with pure electrics.

William Clay Ford, Jr.: Right.

 

Greg Dalton: You're a little bit later but you think you have a more flexible strategy?

 

William Clay Ford, Jr.: Well, I mean I like our strategy because it really lets the market decide how it all rolls out and what the customer wants, because right now, one size doesn't fit all. And I think, you know, and I think it's really because of batteries. I mean you still have range limitations on pure electric and now, yeah, we're rolling out our pure electric, and I think that has application for certain -- for instance, if you live in San Francisco and all you do is drive in the city, that's great. Pure electric is probably exactly what you want. But now, if you have that same vehicle but you want to drive to Los Angeles in the weekend, now you want a plug-in because you drive all week on the battery but you have the freedom then of the gasoline back-up engine to go, you know, wherever you'd like to go. That distinction will start to narrow as batteries get better and range starts to extend on the pure electrics. It's something like all new technologies, expect that to happen. But as we sit here today, we really do have some range issues on pure electric which then are, you know, ameliorated when you go to a plug-in or obviously a conventional hybrid.

 

Greg Dalton: Nissan made a big splash when they priced the Leaf very aggressively. The Volt, some people say it's very high around 40. Have you decided on a price for the Focus?

 

William Clay Ford, Jr.: We haven't announced it but it's -- it's obviously going to be very competitive because as I said a minute ago, we wanted to make it affordable to lots of people. And so -- and that's our goal on all our technology. You know it's interesting, Ford -- we made a very audacious bet about four years ago. We decided we wanted to be the fuel economy leader every single segment. And coming from us and our background, that wasn't certainly our strength and it's certainly what people would have expected from us.

 

Greg Dalton: The maker of the Explorer --

 

William Clay Ford, Jr.: Yeah, and the F150. But we decided even in the F150, we want to be the fuel economy leaders. So, we rolled out a technology -- and so one of the things that enabled that was during the dark days of our industry, during the 2006, 2007, 2008, 2009 period when a lot of our competitors, not just the domestic but overseas as well, we're cutting back on R&D and cutting back on product programs, we actually accelerated ours because it seemed to us there's no point in going through a very painful restructuring. If you come out at the end of the tunnel and that cupboard's bare.

 

And so we also did some research which showed that the number one reason that people rejected Ford was fuel economy. So we said, "okay, let's -- let's shoot for the moon here and see if we can actually deliver it," but to deliver it meant lots of new technology and that's when we decided we had to double down on our product spending on our new technology. So we did that and today, we're, you know, we're in 12 segments. We're the fuel economy leader and we think that will continue to grow. But it requires a suite of technologies. It's cleaner -- you know, we're about to roll out our new three-cylinder gasoline engine. We've got obviously, you know, hybrids and --

 

Greg Dalton: And you're going to put the hybrid in the F150 truck?

 

William Clay Ford, Jr.: Eventually we might but it's hard to -- it's harder to hybridize, even to a bigger vehicle. It just is. I mean it -- you know, batteries, you know, of that strength still aren't quite ready for primetime. You can make small hybrid improvements. Frankly, you can make bigger improvements by something we call eco-boost which basically allows you to get the power of an eight-cylinder but the fuel economy of a six-cylinder. And so we're, you know, that's when I said one size doesn't fit all. And that's true with technology. For some segments it's better to go. There are others, it's better to go electric, you know. Others still compressed natural gas if we start looking out in the other -- the bigger vehicles.

 

And you know, we're still working on biofuels and on hydrogen, but it's interesting how things change. If we were talking two years ago, we would have been talking about cellulosic ethanol. If we were talking three years before that, it would have been fuel cells. And today it's electric, and we are making big bets on electric. We're still investing those others because we really don't know how the world's going to break out, and until this nation has an energy policy which we desperately need, you know, all of this is going to be sub-optimized because -- think about electrification.

 

So how are we going to build out the smart grid that we've been talking about for five or six years? It hasn't happened yet. How are we going to power this grid that -- we're going to have to build more plants. How are we going to power those? Are they going to be coal-fired? I hope not. Are they going to be nuclear? Well, that's a national discussion we need to have. Are they going to be -- will renewables do it for us? But we need, you know, we need to have a national policy and a way to get there because otherwise, we're going to be there with the hardware and customers are going to say, "Yeah, you know I like the hardware but I just don't feel comfortable yet because I don't have the ubiquity of plugging." So I think that, you know, as a nation there are some discussions we need to have and we need to have them pretty quickly.

 

Greg Dalton: Are you part of any group in Washington trying to --

 

William Clay Ford, Jr.: Yeah.

 

Greg Dalton: -- sort of advance that? Because it seems like there's special interest, the coal people protect their thing, the natural gas people have a different view. It's all carved up and there's no coherent policy.

 

William Clay Ford, Jr.: Well, but that's, you know, I guess I would just say too bad. We need to get on with it. And in -- yes, we are making our voice heard in Washington.

 

Greg Dalton: Do you think that a gasoline tax would be part of that?

 

William Clay Ford, Jr.: I've been pushing for that for the last ten years because the one --

 

Greg Dalton: But you're not going to run like an office anytime soon?

 

William Clay Ford, Jr.: Well, politically -- no.

 

[Laughter]

 

William Clay Ford, Jr.: For a lot of reasons. But --

 

[Laughter]

 

Greg Dalton: Every economist says it's great but no politician would tell us.

 

William Clay Ford, Jr.: No politician will touch it but you know, if -- but I'll give you an example where that works. Obviously we're a big player in Europe, and a bunch of years ago, not even -- well not a bunch of years ago but within the last ten years, the Europeans decided they wanted to come down the CO2 curve. And the said "Okay, how are we going to do this?" Well at that time, diesel seemed to be the best option 'cause electric was still far-off and other biofuels weren't available. So what happened was the various EU governments, the NGOs and the automakers all sat around the table and we said "How can we collectively make this happen?" So the automakers said, "Well, we can make the small diesels, but the customers have to want to buy it."

 

And so what the governments did across Europe, which made a lot of sense was, they gave tremendous tax breaks to diesel and they taxed the heck out of petrol. So when a customer came into the gas station, it was a no-brainer. "I want to buy the diesel." And guess what? It worked overnight. Almost, the diesel upped the penetration of the auto fleet just went like this, and it's still -- now it's in every segment. It's worked. But unfortunately, you know, without that kind of clear pricing note to the customer, it wouldn't have happened that quickly.

 

We don't have that in this country. I mean people often say they wanted to do diesels, you have them in Europe, you have them in Asia, yeah, we do, but if you go to -- diesels cost slightly more to the customer to by upfront, and if you pull into a gas station today, diesel is either priced on or above gasoline. So customers are saying -- doing the math -- and say this may not be worth the trip.

 

Greg Dalton: And there's also health concerns about particulates from diesel.

 

William Clay Ford, Jr.: Yeah. Well, that's a whole other thing and, you know -- and that -- yes, but we're solving that in Europe. It's fairly expensive in terms of, you know, the treatment that we have to do. But -- and you know, for a long time, diesel was sort of a word you could use in this country.

 

Greg Dalton: It's a dirty word because they're knocking and --

 

William Clay Ford, Jr.: Exactly. But Europe, you know, they've embraced it and -- but I'm not here to chauffer diesel at all. In fact, I'm sort of the agnostic whether we do this or not, but I'll just point out that that's -- that was one approach where you had a government that took pricing action to signal a behavior to the customer, and it worked.

 

Greg Dalton: Do you think there should be a price on carbon emissions that would give that signal?

William Clay Ford, Jr.: Well, you know, that's -- we were part of the original part of the Chicago Climate Exchange which did carbon trading. And I think -- I think with any carbon mechanism, it's so complicated. I mean that's one thing that we've -- it has to be economy-wide. And so, I think a well thought-out carbon scheme still has yet to be our articulated.

 

Greg Dalton: If you're just joining us, our guest today at Climate One at the Commonwealth Club is William Clay Ford, Jr., the executive chairman of Ford Motor Company. I'm Greg Dalton.

 

Your bio describes you as a lifelong environmentalist. What do you think about some of the recent attacks on EPA, clean air, clean water, et cetera that has happened in Washington?

 

William Clay Ford, Jr.: Well, you know, I mean, we -- we work very well with the government. In fact, you know, the one national standard for CAFÉ, which is a very tough standard, we work --

 

Greg Dalton: The mileage standards.

 

William Clay Ford, Jr.: Yeah, exactly. We work very closely with the government on that, and it was -- it's going to be tough for us to do it but it's the right thing to do and so, you know, if I rewind ten years ago, we basically said no to everything. I mean our -- you know, our whole goal environmentally was to comply and not for leadership, but --

 

Greg Dalton: And to litigate sometimes and fight the -- in California --

 

William Clay Ford, Jr.: Yeah. But you know, well, here's the one thing that we couldn't stand as manufacturer 'cause we can't have multiple -- that's why really wanted one national standard. Because as a manufacturer, if you try and make something for California, something different for Nevada, something different for -- I mean, it's an absolute nightmare. So we were happy to have a tough one national standard, 'cause we can comply with that.

 

Greg Dalton: Do you think there's a trade-off between environmental standards and jobs that environmental standards cause jobs?

 

William Clay Ford, Jr.: Well, I know. I mean I think you could turn it around and say that creates jobs because it's going to require a lot of new technology to meet these standards, and so, you know, we are hiring people who, you know, are well-versed in things like solar, biofuels, electric. And so I think that, you know, anytime you embrace -- now, and obviously there's a tipping point where if you, if something goes into effect that you simply cannot do, well then, you know, then -- then that's a problem.

 

Greg Dalton: BMW did something recently. Their chairman said they got out of Formula 1 racing, which has traditionally been used to develop new technologies and said they're going to put those resources instead into -- used the word "premium" -- more efficiency and environmental and sustainability initiative, saying that's where change and innovation will come from. That's pretty interesting. What do you think about take -- saying not racing -- we're going to -- rather than have these fuel-guzzling high-performance cars, we're going to look for another place to innovate."

 

William Clay Ford, Jr.: Well, yeah. I mean I -- great. I mean we're doing that too and I think, you know, Formula 1, you know, we're been in that for quite a while and -- you know, I don't know that we ever really derived a great benefit technically from it. I mean our engineers liked working on it, you know, I mean it was fun. I mean they kind of have a blast working with, you know, with race engines. But really in terms of what it brought to the mainstream products, it was probably minimal.

 

Greg Dalton: One of your innovation -- there's a lot of car companies in California that are starting electric. There's CODA, Tesla, Fisker, Better Place. How do you -- as based in Detroit with a large incumbent company, look at the innovation that's happening here in California?

 

William Clay Ford, Jr.: I think it's great. I mean I think that, you know, it's -- it's -- and it's not just an electric space, you know. All these information technology, safety technology, it's really pouring now into the auto industry and I love it. I'm on the board of eBay which takes me to the Valley all the time and I'm always poking around when I'm there. And in fact, you know, I started my own strategic investment fund in the intelligent transportation space because I saw so much interesting cool technology being developed in the -- what we call the ITS space. You know, I really wanted to, you know, personally play in this space 'cause I think there's some -- if you think about trying -- my goal for Ford Motor Company and for my own career is to make people's lives better.

 

And so how do we do that? Well, you know, it used to be that we provided ambulances and fire trucks and police cars and, you know, and really all the way back to my great-grandfather, you know, who -- it's interesting, I don't know if you know this but prior to the Model T, most of the people never travelled more from -- further from home in their lifetime than 25 miles. It's incredible. And the Model T then changed where people lived, where they worked and where they played.

 

And so -- and also helped create the middle class in the process through the assembly line and all that. So, you know, it -- to me that's incredibly inspirational but then, how do you translate that into today and tomorrow? And to me, it's solving problems that are facing people. Global gridlock is obviously one of them. When I was younger, you know, you mentioned my environmental interest, you know, it was -- it was how do I wake this industry up? Because we are a very insular industry in an insular town that, you know -- and there weren't a lot of kindred spirits. And I was, you know, and it was -- in fact, I was told to, you know, very early -- and this was a direct quote, "Stop associating with any known or suspected environmentalist."

 

[Laughter]

 

William Clay Ford, Jr.: And --

 

Greg Dalton: Card-carrying environmentalist, be wary.

 

William Clay Ford, Jr.: Exactly. So that was -- you know, that was interesting. And then I addressed the Greenpeace International Conference I think in 1991, and I'm not sure who is more freaked out by the Greenpeace people or the people in Dearborn. So -- but it was -- but you know, and so this whole notion of making people's lives better, I think, you know, is what drives me and it really has to drive, you know, our enterprise. And not everybody is going to have that same resonance with it that works there but it's why I get up in the morning.

 

Greg Dalton: It sounds like the industry has come around to your point of view. Do you feel vindicated that sort of you were out ahead of the industry and --

 

William Clay Ford, Jr.: I kind of feel like it's about time.

 

Greg Dalton: What took you so long?

 

William Clay Ford, Jr.: Well, you know -- but a lot of it too is technology, because, you know, I don't want to keep harping this technology but if you think of it, it used to be -- even five years ago. If you wanted an environmentally, you know, good car, there were big trade-offs you had to make to have that. Were you willing to give up space? Were you willing to give up -- create your comforts like the air conditioning and you know, were you willing to, you know, have a, you know, 4-speed, 3-speed manual transmission. You know, they weren't a lot of fun to drive if you really wanted to have an environmentally correct car. And so a lot of people, you know -- if you ask anybody back then "are you an environmentalist," everybody would say yes. But then you start saying "what are you willing to give up for," you know, the list is shrinking pretty rapidly that people [00:27:22] those. But technology now has allowed us to have people have those kind of vehicles and still have everything else that they like.

 

Greg Dalton: But couldn't the industry have done that sooner if they've invested in those technologies earlier?

 

William Clay Ford, Jr.: I don't think so 'cause a lot of the technology, you know, came from outside of our arena. And so --

 

Greg Dalton: Batteries for example?

 

William Clay Ford, Jr.: Well, that's a very obvious one. I mean, you know, it's an interesting question but on the other hand, a lot of us were trying, and we were developing more fuel-efficient engines but they weren't a lot of fun to drive. I mean a four-cylinder, you know, in one of our cars was kind of a dog frankly. But today, the technology is if you drive a four-cylinder, you can actually have a heck lot of fun driving that.

 

Greg Dalton: There was a fantastic episode on the Jay Leno Show two years ago where Rush Limbaugh drove -- I believe it was a Ford electric car, and if you'd seen that, you know, he'd -- there's a course where he knocks down Al Gore and some other things.

 

William Clay Ford, Jr.: I missed that one.

 

Greg Dalton: But -- yeah, and Rush Limbaugh, you know, he doesn't like Al Gore clearly but he loved driving the electric car, so it doesn't matter if you're on politics, to drive an electric car is just fun.

William Clay Ford, Jr.: But they're a blast. You know, I mean it's -- because there's no accelerator delay. You know, you punch it, you go. It's like a golf cart basically, you know, except for there's a lot more behind it. But you know, there's great irony in all this. You know, we spent my entire career trying to figure out how to make cars quieter. Now there's big debate about how do we add noise back into electric vehicles for pedestrians and everything else. So it makes me kind of smile because you know it's -- we -- we achieved the ultimate, now we got to dial it back.

 

Greg Dalton: You were one of the first companies to bring in an outsider to run an auto company. You brought in Al Mullaly from Boeing. Now, General Motors has an outsider from telecommunications. How does that change the industry to have, for the first time, people who didn't come up lifers running the company?

 

William Clay Ford, Jr.: Well, in Alan's case, it's fantastic. But it's interesting. You know, what happened when I hired Allan was, you know, we -- I took over in 2001 as CEO. We were, you know, washing red ink and we got back to three years of profitability. But in early 2006, I saw this tidal wave coming at us. The consumer was tapped out. The -- we had way too much capacity as an industry and Ford as well, and I knew a major restructuring was ahead of us. So I did two things. I first went out and borrowed everything we could and you can imagine that was an interesting family discussion. They said -- I said "By the way, [00:30:02] is a Blue Oval." They said, "You did what?" But --

 

Greg Dalton: The family heirlooms.

 

William Clay Ford, Jr.: Yeah. But we -- 'cause I knew -- but then I knew, you know, I needed somebody who had done a major restructuring at a big industrial company to come help lead this. And they were frankly, it was pretty short-list. But Allan had done that at Boeing because right after 9/11, Boeing sales dropped 60 percent and he had to completely revamp the -- the other thing was, it was amazing the similarities between Boeing and Ford.

 

William Clay Ford, Jr.: They have the Toyota production system at Boeing. They had pretty much the same product development system in Boeing that we did. They had pretty much the same supply-based management that we did. And really the only difference was they sold their -- their planes to governments and to, you know, big airlines, whereas we sell ours to, you know, to people. But -- so it was -- that similarities were striking between Boeing and Ford, and you know, and once I met Allan, I really didn't feel it'd be a stretch at all to bring him on board. But yet, there was a lot of skepticism from the outside. I mean I'll never forget the first day I introduced Allan to the press. A lot of the long-time automotive press came up to me and said, "You guys are never going to make it. You hire this guy and this is your death knell." And obviously, you know, it turned out that the other guys went bankrupt and we made it through.

So -- and Allan's been magnificent but, you know, and I don't know -- certainly he looked at things with a fresh set of eyes and probably the biggest thing he did which I'm not sure an insider would have done, is he looked at all the brands we had. And he said "You've got Jaguar, Aston Martin, Volvo, Land Rover," and Mazda, we had a big share of. "How can we make the Ford brands shine when we're distracted by all this other stuff?"

 

And I think a lot of us were too close to those brands to maybe have made that decision, so --

 

Greg Dalton: But they were acquired over time, right? So, it's hard for people to lure.

 

William Clay Ford, Jr.: Well, they were, and they were great brands and we were in love with all of them and, you know, and all of them stood for, you know, something that we thought was very interesting and relevant to the customer. And yet, he was absolutely right, for us to make the Ford Oval shine again, we had to focus just on Ford and pour all this technology that we were developing for all these other brands into the Ford brand. And so -- and I think that that's a case of a fresh set of eyes and somebody without and emotional attachment coming in and saying "I think this is what we need to do."

 

Greg Dalton: If you're just joining us, our guest today is William Clay Ford, Jr., executive chairman of Ford Motor Company. I'm Greg Dalton. You mentioned that you got through the financial crisis because of the borrowing. You've had ten quarters of profits, Standard & Poor's just upgraded Ford's credit grading to near investment grade. You haven't reinstituted dividend. Do you have any ideas when you'll add a dividend or --

 

William Clay Ford, Jr.: You sound like a member of my family. [Laughter]

 

Greg Dalton: "Dad, one second. Let's start to put --" yeah.

 

William Clay Ford, Jr.: Well, I have a lot of cousins and relatives that are very interested in that as well.

 

Greg Dalton: I'm not acting on their behalf, I promise. But how about the financial outlook for the company?

 

William Clay Ford, Jr.: Well, you know we've -- we've made it through a really tough period and we've paved down a ton of debt. We've paved it down much faster than certainly the outsiders, but actually faster than we thought we could too. And so we really feel good about where we are, but you know, the world is not a happy place right now, you know, as we all know, I mean it's, you know, we've got Europe having real issues, Asia slowing down, you know, there's you know, big issues in our economy. And so, you know, we're very conservative in our planning and I think it's very appropriate. So, we have a very focused plan and we stay slavish to it. And it's getting us through a very great tough time but, you know, it's -- there's not a lot of blue sky out there. Having said that, we are doing well in a pretty tough time and we believe we can continue to do well, you know, if we continue to serve the customer and to continue to give them what they value.

 

Greg Dalton: Speaking of not a lot of blue sky, there's the Euro crisis, a lot of economic troubles. One way that's manifesting is if we occupy things, you know, which is directed at corporations partially. How do you do that?

 

William Clay Ford, Jr.: Well, I've been -- I certainly under -- I mean, I understand the frustration, but I look at it, you know, so what can we do about it? And so one of the things I feel really good about is, you know, we're adding 12,000 jobs in the U.S. over the next few years and we're adding -- we're adding blue-collar jobs, we're adding white-collar jobs, and we're actually growing the manufacturing base in North America. And that's something I don't -- we couldn't have done, you know, six, seven years ago, but we've -- we've restructured our company to add jobs and I -- and it's -- I'm very proud of that. I'm very proud of the fact that we are going to be able to offer jobs from, you know, from -- everything from the kind of technology that we've been talking about to assembly-line jobs and lots of stuff in between.

 

Greg Dalton: Jobs. Let's talk about China for a moment. China is a huge potential car market. It's also a competitor in terms of technology innovation perhaps. Will we see Chinese imports into the U.S. like we saw a wave of Japanese imports [crosstalk]?

 

William Clay Ford, Jr.: I'm sure we will at some point. Yeah. I mean I think it's inevitable and, you know, you've mentioned, you know, when I think of our competitors -- you know it's interesting. I was in our corporate strategy office in the early 80s and there was a prediction then that we boldly -- thankfully I didn't author but it was -- I was too junior, but one of our top people said that within seven years, there would be total -- a maximum of six manufacturers globally and there might only be three because there will be tremendous consolidation. Well, in fact it didn't happen. What happened was quite the obvious, I mean quite the opposite. We've had a proliferation of competitors, you know, first, obviously the Japanese, then the Koreans, now the Chinese, and that's just the world we live in and we have to take on all comers and prove ourselves everyday to our customers that, you know, that we're a company worth considering.

 

So, yeah, I'm sure we're going to be competing against Chinese and, you know, and after them, there may be somebody else. I mean you've got, you now, Russian companies --

 

Greg Dalton: Korean Hyundai seems to be coming up pretty strong recently. Hyundai?

 

William Clay Ford, Jr.: Oh yeah, absolutely. I mean Hyundai, Kia, you know, we're playing a tough industry with some great competitors. But you know, you can't shy away from it. It makes you better as a competitor if you're playing with tough players.

 

Greg Dalton: We haven't touched directly on climate change. I want to do that before -- let's say we're going to put the audience microphone up here and we're going to have some questions for Mr. Ford. So, again, the line will form back there at that door and we'll put the microphone there.

 

If you're just joining us, our guest today at Climate One at the Commonwealth Club is William Clay Ford, Jr., the executive chairman of Ford Motor Company. I'm Greg Dalton. Let's talk about climate change. There is a story recently that U.S. hasn't done much on that front where a lot of this is happening you said earlier. How do you view the climate change debate in the United States, you know, as an executive?

 

William Clay Ford, Jr.: Well, it's kind of like I said about national energy policy. I mean, you know, we need to -- with the so many noises that nothing much is happening. Well, one of the things we've done is we've just taken upon ourselves as a corporate citizen to slash our CO -- we've set tough CO2 target for ourselves, for our cars, and also for our facilities. We're also focusing on water, which again is something that's -- a lot of people, you know, people don't really think of water -- I mean I shouldn't say that. I think in the West, you guys do more because water issues are -- are part of everyday life for you. But in parts of the country, it's just not everybody's radar screen. But we set a very tough water usage standard for ourselves, and I think this number is right. Since 2000, we've cut our water usage by about 65 percent. And we're going to continue on that goal. So whether it's CO2, water, chemicals, you know, we are really pushing hard as a corporation. A, it's a right thing to do, B is actually a right business decision --

 

Greg Dalton: Saves money?

 

William Clay Ford, Jr.: It does. And also you're -- you know, what you can't measure is how your employees feel about you. Well, you can measure but I mean it's -- it's tangible and it's real and it's something we want our employees proud of us. We want them to say -- be able to say to their family and friends, you know, "I work at Ford, and -- and it's a great company." So, that's important to us as well.

 

Greg Dalton: Lots of organizations, individuals are doing a lot but scientists would say, and I'm sure you know them, would say it's not happening fast enough to stabilize the climate where it needs to get.

William Clay Ford, Jr.: Yeah, I mean I think, you know, it's -- it's -- you just look at the data, you know, and whether it's the polar icecaps or whether it's the, you know, the drilling of the ice and capturing historical data, I mean anything one looks at, you kind of end up in the same place.

 

Greg Dalton: Pine bark beetles, devastating forests --

 

William Clay Ford, Jr.: Yeah, I mean it's -- exactly.

 

Greg Dalton: Let's have our first audience question. Yes, sir?

 

Virian Bouze: Good evening, Mr. Ford. My name is Virian Bouze, I'm the director of the Oakland Institute of Automotive Technology, Incorporated. We put together a program to teach people about the electric vehicle program. It's a nonprofit -- a completely nonprofit program.

 

William Clay Ford, Jr.: I hope that isn't one of our engines.

 

[Laughter]

 

Virian Bouze: Well, yeah --

 

Greg Dalton: And your question?

 

Virian Bouze: Basically, what I would like to do is try to reach you where I could get technical information from your engineering department.

 

William Clay Ford, Jr.: Sure.

 

Virian Bouze: And the other part of this is building a prototype heavy-duty three-axle diesel tractor converting it to electric.

 

William Clay Ford, Jr.: That's very cool.

 

Greg Dalton: And so perhaps you can connect the [crosstalk] --

 

William Clay Ford, Jr.: Yeah, Brad Simmons here has worked for me, and I'll make sure Brad gets your info and we'll definitely connect.

 

Virian Bouze: Right, because this is a door opening for high school graduates to have a job. There's never been there before.

 

William Clay Ford, Jr.: Well, congratulations. I think that's really cool and yes, we will follow up with you.

 

Virian Bouze: Thank you very much.

 

Greg Dalton: And we have some high school students here.

 

[Applause]

 

Greg Dalton: Let's have our next audience question. Yes, sir?

 

Don [Sifcus]: I'm Don [Sifcus] from San Leandro, and also from Sterling Heights, Michigan.

 

William Clay Ford, Jr.: No kidding.

 

Don [Sifcus]: Yes.

 

William Clay Ford, Jr.: When you say also, you mean originally from?

 

Don [Sifcus]: Fifty percent there, fifty percent here.

 

William Clay Ford, Jr.: Okay.

 

Don Sifcus: In keeping with your stated objective of helping making people's lives better, why can't Ford Motor Company manufacture E100, flux-fuel engines where the mileage is optimized for ethanol and not gasoline, instead of making E85 engines where the optimization is for gasoline mileage? Brazil did something similar to this years ago, and today Brazil imports no crude oil. Zippo, nada, zero.

 

William Clay Ford, Jr.: Yeah.

 

Don [Sifcus]: Doing this would eliminate the need for the Keystone XL Pipeline and making the United States independent of imported crude oil much faster and at a fraction of the cost of the electric vehicle program.

 

William Clay Ford, Jr.: Well, you -- you know, it's interesting. We're a big player in Brazil and we're part of that development of the Brazilian industry and you're right. It all runs on basically sugarcane ethanol. There are huge government subsidies for that and they're enormous. And it's frankly unaffordable long-term for the Brazilian government. You know we can do it. I mean to say we make our -- we're a big player in the Brazilian market and have been. And one of the things about ethanol though is it's hard, as you know, it's hard to transport. So -- and you know, and there was a lot of -- as I said earlier, a couple of years ago there was a big discussion about cellulosic ethanol because nobody wants to do it with corn because then you get into the food versus you know, fuel debate -- and so -- but it's, you know, to manufacture it in the quantities that we would need would be an enormous undertaking. And if that happens, we will absolutely be there with the hardware. No question. But the problem is, as we sit here today, we can, you know, the electric -- the electrification of our industry is something that we think is, you know, more commercially doable earlier.

 

Now, would it be cheaper for us to do ethanol? Absolutely. Because the modification of an engine isn't a big deal as you probably know, you know, with some seals and a few other things 'cause that's what ethanol tends to burn a little hotter than gasoline, so you do -- you have to change a few of the fittings and connections, but it's not a big deal. So if we really thought that this country was going down the ethanol highway, boy, would we be there. But we don't see any sign of that. And we can't drive -- I mean one of the great frustrations we have as a manufacturer, people say "Why don't you just do X?" Well, the reality is we can do X, but if the rest of the country isn't going that way, we're going to have a bunch of Xs made and nobody's buying them. [Laughter]

 

So the smartest thing for us to do which I believe, which is what we're doing, is to continue to invest in the technology for biofuels, for hydrogen, and for these other propulsion systems -- compressed natural gas. So that if one of these actually breaks as a commercially viable entity, we'll be there. We don't want to be on the outside looking in and saying, "Wow, how did that happen and now what are we going to do?" But as we sit here today, it's not -- and we're not in charge of that. I mean that's, you know, we're not a fuel provider.

 

Greg Dalton: Let's have our next audience question. Yes, sir?

 

Roe: Aloha, Mr. Ford. My name is Roe, I'm the CEO of Kula [Koha] from Hawaii. I just want to thank you for your leadership in all these areas on environmentalism. I also wanted to ask you to please come to Hawaii with your electric Ford Focus. We're not in one of the launch markets but we're a perfect place because we have the infrastructure, we have the government support, we have the subsidies, and we have plug-ins. So if you can do anything about --

 

William Clay Ford, Jr.: And you have solar roofs.

 

Roe: Yes we do.

 

Greg Dalton: And Ford drives very far.

 

William Clay Ford, Jr.: Exactly.

 

Roe: Hawaii. We will greet you with a luau.

 

William Clay Ford, Jr.: Well, it's not a tough sell to get me to Hawaii. I'll figure that but it's -- so no, thank you and actually you know the way -- you're raising a good point, because the way we are rolling out our electric Focus is we've chosen some early markets like California that we think are going to be early adopters and also, you know, some of the East Coast markets. Eventually it will be everywhere with them. But because, you know, it required a sort of a -- a target at launch, if I say a Focus launch that'd be it, but it would -- we actually chose California and New York City first. We will get to Hawaii with it. But then thank you for that.

 

Greg Dalton: Let's have our next audience question for William Clay Ford, Jr.

 

Female Audience: A few months ago, Mitt Romney was campaigning for the presidential nomination in Michigan and he said that the largest problem facing the American automobile industry is unionization. Do you agree with Mr. Romney's assessment and how would you characterize Ford's relationship with the unions?

 

William Clay Ford, Jr.: I -- I don't agree with that. And -- and I think we have a tremendous relationship with our union. We've accomplished a lot together. One of the things that I have always believed is that I don't look at our workers as union and salary. I look at them as Ford workers. We all work at Ford, we all have a stake in the company. And when I walk into our plants, you know, our workers don't say, you know, "I'm union." They say, you know, "I work at Ford and I love it." And a lot of them -- I'm fourth generation, we have a ton of people in our plants that are second, third, fourth, even fifth generation. And they are very -- they love what they do and they're very proud of our company and they want us to win. And an example I'll say was, you know, during the horrible downturn that our whole industry went through, you know, over the last five years, our union was great in helping us get competitive again. I mean we did -- they took control of the healthcare which was a huge drag on us. And Aviva which they took, they -- this new contract that we just signed last week, they did a number of things to make sure our competitiveness as a company going forward. And -- but it's a relationship that requires working on everyday. You don't just show up every four years at a table and sit across from somebody you don't know and say, "Okay, you know, what do you want and here's what we're going to give you."

 

I mean one of the things I'm most proud of in my career is the relationships that I have within the people -- within our company and most especially within our plants. And you know, and I -- and that's something I think that surprises people who don't know Ford. They probably assume that you know, I'm the corporate type and that we have the union types and we don't like each other.

 

Greg Dalton: Well, there was a -- I believe there was an accident at River Rouge in one of your plants a few years ago and you went right down there.

 

William Clay Ford, Jr.: Yeah, that was a bad day. That was a very bad day.

 

Greg Dalton: But a lot of CEOs wouldn't have done that.

 

William Clay Ford, Jr.: Well but -- yeah, in fact the advice I got was generals don't go to the front, and I said, "Well then, bust me to private 'cause I'm out of here." I'm going right there. And you know, to me it was the only human thing to do and -- but as you know, I very much think that -- you know, I can only speak to our union and our union works really well with us to make us competitive. And actually, you know, and if you said -- if then we're to say 'cause people have asked, well then, how did it get so out of whack? Well, we gave it to them over the last 50 years. I mean it wasn't as if they did it to us. I mean it takes two to tango. And we together then shifted gears and said "All right, how do we make this more competitive?' And we've done that.

 

Greg Dalton: Let's have our next audience question.

 

Tim Collins: Alright. Tim Collins and I'm the founder and president of KleenSpeed Technologies and we're located down at NASA Ames, and I'm here in Mount View. I was lucky that I have a great friend who's under my advisory board, Roy Chapin III, and he -- so I hang out a lot in Gross Pointe.

 

William Clay Ford, Jr.: Well his -- you know, his dad was chairman of American Motors.

 

Tim Collins: Yeah, I know that. So, Roy's been a big help to us. We developed a --

 

William Clay Ford, Jr.: Actually, that's his cousin, he's right there.

 

Tim Collins: I see. We'll chat.

 

Greg Dalton: Let's have -- do you have any question?

 

Tim Collins: Roy was here two days ago. So anyway --

 

Greg Dalton: Let's have your question next.

 

Tim Collins: Yeah -- what we found in the R&D is that the electric vehicle system is really complicated, the pure system. We believe that there's a frontier and it's between the hybrid and the electric, and -- so because of that, we think that there's a wide open playing field and we look at the auto industry as you would look at it 1910 for the electric vehicles. And I think that there's just going to be many companies like Tesla and like our company, they will be starting up and some of them of course, will be successful. So I guess my question to you and, you know, a lot of engineers go -- in 2008 just like all the other automobile company says, "Do you see the electric vehicles' playing field?" You know, the Focus has a power system developed outside. So, I just to know what your thinking was there?

 

William Clay Ford, Jr.: Yeah. We actually think it's a core competency for us and we are building a very large electric capability within Ford. But you're absolutely right. I mean we certainly don't have -- and I would never claim we did -- you know -- monopoly in good ideas. I mean a lot of the really cool stuff will happen elsewhere. We just have to be open-minded enough and nimble enough to accept that and to, you know, wherever there's a good idea or new technology, be willing to adopt it. And I think you've seen that with us. I mean it's interesting, you know, our Sync, which we've developed with Microsoft, we've made an open platform -- we have a lot of start-ups in the Valley developing apps for Sync rather than us trying to own it all. And that -- that's very different behavior from a company like ours. And so -- yeah, I love what you're doing and I love what a lot of the other companies are doing. And anything that can move us quicker towards, you know, where we'd all like to go, I'm all for it.

 

Greg Dalton: Are you shopping for any acquisitions, companies to buy up that you think because you [crosstalk] --

 

William Clay Ford, Jr.: You know, I don't think actually we want to buy companies. I think we want to be customers for good ideas. And the reason I say that is, you know, you buy a company and it's a snapshot in time and all of a sudden that company -- what you thought you were buying, you know, is antiquated in three years or the founder left or the key scientist left or they don't like working in the big company. And you know, it could be any of those things. And so, I think for us to be really as nimble as possible, we don't need to own -- in fact probably shouldn't own a lot of these companies. We should just be great customers for them and help them develop their technologies.

 

Greg Dalton: Next question please?

 

Male Audience: Mr. Ford, I'd like to thank you for the values you brought to the American auto industry. And you said you want to improve people's lives and as a former taxi commissioner in San Francisco, I just want to thank you on behalf of San Francisco's taxi drivers because we've converted about 85 percent of our taxi fleet to hybrid vehicle seven years ago next month. We introduced the first fleet of hybrid taxis in America, it was the Ford Escape. It's been a tremendous success for us so I don't really have a question, I just wanted to thank you for your advocacy and for all [crosstalk] --

 

William Clay Ford, Jr.: That's very nice, thank you. Thanks, no, thank you.

 

[Applause]

 

I really appreciate it. You know, it's interesting too 'cause we weren't sure how hybrids would hold up in city driving, you know, 'cause we're in New York as well. New York and San Francisco, you know, there's some pretty tough driving going on, you know, and New York with the potholes and San Francisco with the hills, and so -- but to our great delight, the hybrids have been proven to be very, very durable which has been great 'cause actually that's helped translate for retail customers that durability. So thank you for that.

 

Greg Dalton: And the drivers love them because they cost them less gas, it was a real win-win situation.

 

William Clay Ford, Jr.: Yeah, it's been great but it was -- it was a leap of faith for San Francisco and for New York to do that, because it wasn't a no-brainer by any means because they didn't know what they're really getting into.

 

Greg Dalton: Why don't more cities do it?

 

William Clay Ford, Jr.: Cities are They're actually doing that now and a lot of it it's a cost issue. It's just a lot of the city's fleets are just old. But when they're starting to renew them, you're starting to see hybrids are much more part of the equation.

 

Greg Dalton: Yeah. Certainly saved the drivers on gas. Yes, sir? Next question.

 

Andrew Frankel: Mr. Ford, my name is Andrew Frankel. I joined you 50 years ago. Could I please have my gold watch?

 

[Laughter]

 

William Clay Ford, Jr.: Well, this isn't gold. I actually want to hang on to it. Thank you.

 

Andrew Frankel: Seriously speaking, two -- two very quick questions. One, were you a bit surprised that Rick Wagner turned up saying would you like to merge and would you agree that your secret weapon is Lewis Booth?

 

Greg Dalton: May I explain who those --

 

William Clay Ford, Jr.: Yeah. The -- when Rick Wagner -- is that your first -- yeah, the first question was, was I surprised when Rick Wagner, who was the CEO of General Motors, came to us about merging. Yeah. It was during the dark days and you know, and I grew up in an era where General Motors was the big, you know, the big gorilla in Detroit and we were, you know, always trying to, you know be a scrappy number two. And so, yeah, it was a bit surreal to have that conversation, but you know, I think it was the right decision not to. We couldn't have handled it. You know, we were very fragile ourselves and we were very much like General Motors. We didn't need -- you know, we had -- you don't need Chevy trucks and Ford trucks. You don't need Camaros and Mustangs, you don't need -- so, you know, really if the goal would have been to preserve jobs, it wouldn't have happened because we would have them in a lot of slash and burning.

So weren't the logical person -- logical player to deal it with them. And you mentioned Lewis Booth, our chief financial officer, yeah, he's been terrific. He used to run Ford of Europe. He used to -- I mean he has run operations all around the Ford world and it wasn't unnatural for him to become the chief financial officer but he's been a great one. So thank you for that.

 

Greg Dalton: Next audience question. Yes, sir?

 

Male Audience: Welcome Bill. Giving way my age a little bit, this goes back before World War II. A friend of mine's grandmother had an electric car and as a pre-teen, we would go back and forth on the long driveway. I'd like to think if this much time and development had been spent on electricity cars against the internal combustion engine, we might have had it a little sooner.

 

William Clay Ford, Jr.: There's no question about it. I think you raised a really interesting point. My great-grandfather's best friend was Thomas Edison, and together they -- actually if I get to digress just for a second because it's kind of cool.

 

Greg Dalton: We love these stories.

 

William Clay Ford, Jr.: They -- there was a group that called themselves the Vagabonds and it was Harvey Firestone, Henry Ford, Thomas Edison, the naturalist John Burroughs and whoever the president at that time, and they would -- they would go camping, and there is some great stories that came out. My grandmother told me that before she died that she got invited -- it was rare that they invited wives, but they invited -- they went along and so it was kind of neat because Edison would spring up a portable electric lights at camp and he was pretty well deft, so all the pictures you see was Henry sort of screaming in and Edison was very vain about it so he didn't want any pictures taken when you know, with his -- because he had a hearing aid. But -- so she was telling me this one story. They pulled up at this general store, they were in Northern Maine in the middle of nowhere. And so she went out with a guide and the guide looks out the window and said, "I recognize those people," and said, " Yeah, you know, that's Harvey Firestone, that's Henry Ford, that's Thomas Edison, that's President Harding," and he turned to the fellow who ran the general store, turned the guide and said, "Right and who are you, Jesus Christ?" [Laughter] So, in any case -- but you are absolutely right -- they did deliver -- developed the electric vehicle and they were running around on electricity, you know, back 100 years ago.

 

Greg Dalton: The Detroit Electric, right? It was a ladies' car.

 

William Clay Ford, Jr.: Yeah, but here's the thing -- gasoline was a lot cheaper. Fuel, you know, they discovered oil in Texas and all of a sudden, you know, gasoline was, you know -- and it wasn't clear. I mean steam was -- it was either going to be steam or electric that was going to power the world at that point. And all of a sudden, you know, gasoline was discovered in big quantities -- or oil was -- and then it became the fuel for aviation, for boats and for cars. And you know, we often wonder what would have happened, you know, had it -- but it was the cheapest option.

 

Male Audience: 1935, my first airplane flight was in a Ford Trimotor. So maybe there is a connection there with Boeing. But the question I have -- what training programs have you developed for people that don't have the skills needed to require them particularly returning veterans.

 

William Clay Ford, Jr.: We actually work very closely with the veterans group and we are -- we do have training programs both technical and also with the UAW. And it's, you know, our relationship with the veterans group is something that's kind of a highlight of ours. We also do a lot -- in addition to that, we do a lot of outfitting vehicles for veterans who have come back that are handicapped. So you know, it's -- and we can't do enough for them obviously.

 

Greg Dalton: Let's have our next audience question, yes sir.

 

Male Audience: When will we be able to buy a car from Ford that drives itself?

 

William Clay Ford, Jr.: Yeah, I mean it's a very good question. Now, I hope we never see -- I'd love to drive. Now having said that, you know, to me, it's kind of a blast to drive, but a lot of people, you know, particularly in urban areas, would like -- and you know, so we are working on autonomous cars as are others. I mean that's certainly, you know, Google's -- I spoke at the Ted Conference, this last year, talked about global gridlock, and you know, Google was there demonstrating the driverless vehicles, very cool. We have one, I think GM does, others probably do as well.

 

What's the timeframe? I can't tell you that because you think of the safety issues, the huge logistical issues in terms of traffic flows and red lights, and you know, pedestrians and all those things that are going to have to be factored in. And right now, it's just a very cool demo thing. And you know -- and it's still not perfect, but technology is coming along fast, and you know, I'd be surprised if -- certainly in my driving lifetime if we didn't have one on the road. I can't give you a precise timing because I just don't know. And we are going to have to have a lot of discussions around those other issues that I outlined before they really are ready for everyday people to have. But you know, it's interesting. I get to see kind of all kinds of old new stuff, some of which, you know, makes sense. You know, I -- you'd be amazed how many people have come to me lately -- inventors with flying cars.

 

Greg Dalton: So you could get back in the aviation business?

 

William Clay Ford, Jr.: Yeah, but there is one -- and they work. And it's actually kind of, you know -- I mean prototypes work where they fold the wings and they [00:59:55] on the trunk --

 

Greg Dalton: Have you gotten one yet?

 

William Clay Ford, Jr.: No. [Laughter] But there is other - one other sort of small point that you know, that kind of, I think is an limiting factor is -- you have to have a pilot's license to have one, you have to take off and land at airports and so, kind of you know, at that point, what's the purpose? But actually I love the thought process that goes into it. And whether it's flying cars or autonomous vehicles, I mean, we are really entering an age where all of this is possible. And technology is really going to be delivering it, then we'll have to use common sense to say what really makes sense here and what kind of technology is going to actually make our lives better and what kind of technology is going to make our lives more complex and more difficult. And I think that's where the judgment starts to come out.

 

Greg Dalton: People often think that the auto companies and the oil companies are pretty close together. Are they blocking the move towards electricity which has been kind of --displaced?

 

William Clay Ford, Jr.: It doesn't really matter, it's happening. I mean it's, you know, and it's interesting. I've heard that. We are not aligned with anybody. It can't be, I mean you know, whether it's -- let's say, biofuels or whether it's compressed natural gas -- I mean you know, I won't go through the litany again of fuels. But we have to be completely diagnostic about fuel providers other than we would like ubiquity of fueling, whatever that fueling is, whether it's charging or ethanol, or you know, gasoline, diesel, whatever it is, our customers have to be able to get it. And they have to be able to get it in a way that makes them confident. Because if they have to worry about where am I going to fuel up? People don't want to be there. And they shouldn't be there, so -- but no, I mean its going to happen.

 

Greg Dalton: We've come to the end of this, I just want to ask you sort of a legacy question -- you have the youngest children as do others.

 

William Clay Ford, Jr.: Two of them are here.

 

Greg Dalton: Yes [crosstalk] and so --

 

William Clay Ford, Jr.: And they live in the city. And I am very envious of the fact that they live in the city.

 

Greg Dalton: My son is here as well. So talk about the -- our generation is handing off to the next generation, both in terms of, you know, the environmental situation as the financial situation. Can you talk about not so much about [crosstalk] --

 

William Clay Ford, Jr.: Well, we have huge problems facing us, but I also believe we have huge opportunities ahead of us. And I am no more pessimistic today than I was 10 to 20 years ago, and in fact, I think I am more optimistic because, there is also a generation of problem solving. I mean if you think back to what an environmentalist meant when you and I were growing up, it meant you were against everything. Because that's how you could be. You were, you know, you were out protesting, you were plugging up pipes, you know, of chemical factories and you were, you know, basically trying to limit yourself in a way that, you know, those people couldn't do or didn't want to do. And there was no way out other than just stopping everything and be against everything. But I think there is a generation now that wants to solve problems and wants to bring, you know, technology to bear to solve those problems.

And so, I am actually really hopeful that this next generation is going to deliver -- we kind of screwed up the world. I am actually hopeful that -- and I think this next generation is going to be the one that's going to save us. And I hope I am around long enough to, you know, to see it, because I am actually very excited and optimistic that as big as the problems that we face are, and as poor as the legacy that some of the prior generations including ours has left, I think this generation is, you know, they have to get up and go to solve it and they are going to have the tools to make a big dent. I am looking forward to then.

 

[Applause]

 

Greg Dalton: Our thanks to….

 

[END]

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