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Jim Hackett's views on the future of Automobile industry.
The outbreak of the Novel Coronavirus (COVID-19), which originated in Wuhan, China, had had a significant impact on the economy of the world, so much so that experts are predicting a recession worst than the 1930s one. One of the industries impacted profoundly is the auto sector. Here we bring you views and outlook of Ford CEO, Jim Hackett, on the post-pandemic scenario for automobiles in general and Ford in particular.
The Alliance for Automotive Innovation says that 93 percent of all US auto production has gone offline. Auto sales are expected to decline by at least 15.3% to 14.4 million vehicles in 2020, according to research firm IHS Markit. Globally, auto sales are expected to fall by more than 12% in 2020 to 78.8 million vehicles, according to Colin Couchman, executive director of IHS Markit.
Ford has been hard-hit with the possibility of a $600 million loss for Q1 2020.
Hackett believes that post-pandemic designers and manufacturers of automobiles will incorporate technology that will be virus-resistant. He said, “ Surfaces will have microstructures that can’t hold viruses. Nano-level structures embedded in fabrics and other surfaces will have tiny and very sharp spikes that can rupture viruses and kill them to prevent them from living and breeding on a surface. This technology is already available; it’s just not integrated into the automotive realm at this time.”
Talking of the post-pandemic world, he compared the virus calamity to the 9/11 where the perception of reality changed. The only difference is that the recovery after the 9/11 event was faster and there was no stopping of businesses and manufacturing or such, he said.
But there is a dilemma at the present moment, as opening too soon or too late both will be damaging to the industry, he added.
But he is optimistic that things will pick up fast for the sector.
He also said that Ford had a history of 117 years and has withered world wars and recessions. Even in 2008, they did not partake of any stimulus package or recovery money.
“If you ever face a challenge again, you really want to be ready. ”
Ford has a strong balance sheet and are prepared for any eventuality like this, he said. Some measures have been put in place to save cash flow. They have suspended dividends, taken salary cuts and drawn money from a contingency fund.
Talking of the impact of the ride-sharing business on the automobile sector, with people increasingly opting for that kind of transport rather than investing in a personal car, he said that the reality was in front of us. The pandemic has affected everyone equally, whether you own a vehicle or not. He is of the belief that people would still like to have control of their own space and a car is part of that.
On Ford’s market share, he said what works for Ford is its reliability in delivering perforce. “ Our market share in China went up after the virus outbreak there. So we think that our market share will go up, too, because of this predictability.”
He also talked of the electric vehicle effort of Ford. (Ford Mach E). He said electric vehicles are the future and the bigger opportunity is the extra [interior] space that an electric vehicle gives you.
He emphasised that the new priority should be space, and the ability to perform in ways that pandemics can’t disrupt. Extra space is a good thing in the design of vehicles.
“We have 125,000 people working at home now. And the productivity is really high. On balance, though, I can’t wait to get back and be among my team. I miss that.”
Like most automobile giants, Ford is also at the forefront of pitching in with efforts to help the government in manufacturing medical equipment to meet the shortages.
Ford has started production on a new powered air-purifying respirator (PAPR) designed and developed in collaboration with 3M. Ford is also working with GE Healthcare to manufacture a simplified version of GE’s existing ventilator to help patients fighting acute respiratory syndrome due to the virus.
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