Ford Motor Company (F) Earnings Call Transcript & Summary

[ Let's ] get settled. We're going to get started with Ford up next. We're very happy to have John Lawler, Vice -- the CFO of Ford, Vice President. Ford is in a very exciting position right now. Under the leadership or the newer leadership over the last year or so of Jim Farley, he's changed a lot. He keeps changing a lot. There's a lot that's going on, splitting the business in segments between the ICE business and the electric business. I think it's something we've discussed for a little while. We were a little bit surprised when it actually happened as new segments. So I think that's a very, very exciting development. There's a lot of talk about there, and there's a lot more that we're going to talk about. Before we get into the Q&A, we're going to roll a video that Ford has sent us. If we can get -- queue that up, that would be great. [Presentation]

Make sure we're clear. Okay. Now we're on the opening [ stage ]. Well, that was, really, a great opening and answers a lot of questions very, very quickly. But maybe to kind of dig into this new corporate structure a little bit. I mean the intertwining of human capital and capital as well as technology, it seems like it's still there. But in some ways, you've set up these organizations or segments, I should say, that seem like they might compete a little bit. So the first question is really, if you think about sort of the human capital side of this, is there a dejection in the people that are staying on Ford Blue and in relation to the Model E side? Or is it in relation all across the board because it's opening up new doors and new opportunities? And how do those people interact? It just seems like a really -- I mean it seems like almost siloing, but then we're going to work together. I'm just trying to understand sort of the mood in the human capital or the people involved in this.

Yes. Like, overall, there's excitement. I mean, it's an incredibly exciting time to be at Ford in the amount of change and the focus that we have. From a standpoint of the interaction of the team, let's start with how we, the leadership team, put this together. So of course, Jim has been thinking deeply about this, and we've been thinking about it in a team for a while, and it really starts with the customer and focusing on the customer and what those customers need and how we best serve those customers and create a great ownership experience for them. And as we've said and Jim has said several times, each customer is different. You look at the customer E, you look at the customer Blue and Pro. And so to serve those customers, we felt this was the best way to do it with each of the divisions. And then there's purpose and focus within these divisions. And that purpose and focus is different, and that's allowing the team to come together and understand that mission for each of those, which gives clarity, and that clarity is freeing in many ways. And then the key to it, though, is that we're all interdependent on each other. So Blue is not successful without E. E is not successful without Blue and the same thing goes for Pro. And so as we put this together, and we worked as a team, leading up to the March announcement, one may think that we have been working on that for 6, 8 months a year. We really, in earnest as a team, buckled down starting in January after we talked about it, that's how we're working together. That's how well we're working together. It's in a very agile, small teams, sprints, focus and collaboration and supporting each other. And make no mistake of it, the folks on the Blue team, they know that you can't be successful without them because they're doing the chassis, the bodies, right? E is doing all the embedded compute and the electronics for all vehicles. And so that interdependency in play is really critical. Now are there going to be some pockets of tension, et cetera? Yes. But we need to work through that. That's only natural. It's a big change for the company. But that sense of purpose and focus is really carrying the team through.

Yes. I know I'd be really happy if I was on the Blue Bronco team, so people on the ICE side are not all -- I mean, there's a lot of real exciting stuff on that side. Maybe just to stay on human capital real quick. I mean Doug Field was in his video, and he's a new important person in the business. And we've seen Ford bringing in new high-level talent from outside the industry that seem like they're going to have real impacts on the business. Can you talk about the attraction of that human capital? I mean how you're tracking that human capital at that level. Obviously, there's a lot of excitement in the business, and there hopefully is a lot of money to be made for everybody over time. So I mean there's that. But I mean, it's the kind of thing that has not been believed possible or have been done in the auto industry at those kinds of levels in the past. So can you talk about that? And sort of that high level that we're seeing in headlines seeing folks like Doug Field on videos, but then also maybe sort of even at lower levels in the engineering R&D levels that we might not be hearing about in that attraction of talent.

So I guess, it's true, A talent attracts A talent. Doug is an incredible engineer. And the folks that we're bringing in -- not at that very visible level, it's incredible talent, A talent, in areas that we haven't been able to attract that type of talent before. I would say a few things. Being a first-mover has helped. I had a lot of conversations. I knew Doug before he came to Ford. We had met through different industry-type things. And as I talked to him when he was considering coming, a big part of it was Mach-E, right? First-mover, a great product. We can do it. And it's the mission about Model E that I think is really attractive to folks, right? Many of those folks that really want to come and work on electric vehicles are mission-driven, and they can do that. Plus we're focusing on it and we're setting it up with the speed of the start-up. So they get that advantage as well. And when you look at the capability to scale and make a difference. And then our strategy to focus on our iconic nameplates, scaling segments and be really focused, I think that's very attractive to a lot of individuals out there that are mission-driven around E. And then overall, when you look at Blue, who doesn't a lot of work on Mustang F-Series Bronco, right? We have some great iconic nameplates and we've got a winning strategy and people like that. Then we're the #1 commercial vehicle company in the world and to focus there and really understanding those customers. And now the opportunity on top of that to provide services and experience, it's fleet management, telematics, charging management. All of that are compelling businesses where they can come in and make a difference, they can grow, and we're moving with speed. And that's been attractive as I've talked with folks and -- with the folks that we brought in.

And then maybe another question about this transition. I mean we're used to -- I mean, I think sort of a dumb financial analyst question, looking at this on a segment basis by region. And in some ways, I think the modeling is going to change for us dramatically, and that's sort of a mundane topic. We'll leave that aside for a second. But as far as the reporting structures and responsibility for cap allocation programs, financing, also [ revolved all ] down the line. Internally, how much is this going to shift? I mean because it's -- the business has been run somewhat regionally and then the global overlay. And now it's going to be these -- I mean there's almost 5 verticals, but I mean the 2 main on Blue and Model E. How is that really going to change internally? And really, how is that business is going to be run and how are people going to be held accountable for profits and returns in the different regions across these businesses?

So the regions -- we've been running the company regionally for over 100 years, right? And so the regions now need to think about, is they need to operate around the business units. The great thing about 5 segments is there's a bottom line P&L responsibility for each of those segments: Blue, E, Pro, Credit and then Ford Next, which is our mobility business. And so those will be full P&L verticals. And starting in '23, we will start reporting by those verticals. Now we'll stop reporting by region. But if there's something unique, let's say, for Ford Pro in Europe, it's important, we'll talk about that being Ford Pro in Europe. But we are going to focus on each of those verticals, each of those segments' P&L bottom line, the progress we're making, the metrics that are required to drive those businesses. And so there'll be transparency and you'll be able to see us progress and grow these businesses over time.

And will the management of each of those segments have comp plans and the people that are in them have comp plans that run into that vertical, obviously, with a corporate overlay to some degree to have accountability for those segments? I mean, how is that -- I mean, because it's usually been more regional and now it's going to be by segment.

Right. Right. So each of those, there will be personal responsible deliverables in each of those divisions. There'll be bottom line. There will be quality, there will be sales, there will be revenue, et cetera. And we'll identify what those key metrics are, and they'll be responsible and their compensation will be set on that. And there will be a corporate element to compensation as well because we're all interdependent, right? And it's still Ford Motor Company. And we're still working through all those details. But definitely, when you are in Ford Pro, you'll know what your mission is. When you're an E, you'll know what your mission is, you'll know what your deliverables are, and they will be specific for that division.

Okay. If we think about these 5 businesses, they're not completely separable. But there's this constant question in the capital markets of companies like Ford, and you did -- you've done this with the green bond and $3.25 billion last year, $3.5 billion. I'm not saying that you're not getting after low-cost capital in some ways already. But there is this constant question of certain companies being valued very differently than Ford, right? And you can argue that your stock is wildly incorrectly valued. So I mean we can have that discussion for hours. But some of these businesses in a sort of separate venue, right? Or a separate instrument may be looked at completely differently and have a totally different valuation, which you wouldn't do maybe necessarily just for the valuation, but you might do it to get access to low-cost capital to accelerate a business like the Model E. So how do you think about potentially separating or utilizing some kind of structure to get at that low-cost capital and highlight value to get that low-cost capital, really? It's not just to highlight the value, it's really to accelerate the business.

Well, first, I'd start off by saying our balance sheet is strong. We have the liquidity, and that gives us the flexibility to invest in our growth initiatives. So we're not capital constrained. The interdependencies of the units, I think, is what's key. So separating them would potentially put that at risk. If you step back and think about it, if you're a new EV company, what is the one thing that you really wish you could have that's really hard to get to? Body engineering and manufacturing at scale. We're good at that, right? And now we have the talent and we have the folks in and you see it with Model E, you see it with Lightning. We can run that [ EV ] division like a startup. We can create incredibly differentiated compelling products. And the interdependency between those 2, I think, is where the magic's going to be formed, and that's the best of both worlds. We call it the best of both worlds inside. And so it's not about the financial engineering. Our balance sheet is strong. We have the liquidity. It's about building incredibly strong businesses, leveraging the strengths of both. And we believe over time, as we do that, and we have the transparency around the segments, we should get the valuation growth.

Yes. It seems like it makes a lot of sense. The other thing that's come out is the bump up in the long-term margins of 10% in 2026. And I think you -- and both -- and Farley also said that there's opportunity to continue to potentially even improve on that over time as you get to the sort of reverberation of learnings between the EV and the ICE business. What are maybe some of the key things that you're thinking about that have changed that could get you to that from 8% to 10% and then potentially over time, maybe even higher?

Yes. So one of the key things with the way we're structuring this in looking at the clarity and focus is the learnings within each. And as we've been building on our Model E business and looking at electrification, we see that there are a lot of opportunities still in Ford Blue. There needs to be a relentless focus on cost. We still have room there, both on the variable side and on the structural side. Simplifying our operations, finding efficiencies through every element of the income statement. And that's what -- in quality, and that's where Blue is going to be focused. And we believe with that and the $3 billion we've identified of savings that we're going to deliver over the next 24 months, that's going to strengthen the margins on the ICE side of the business. And then on electrification, of course, the margins aren't where they need to be. We're small volumes. We're investing a lot of capital. So it's a loss business. But we've said, by 2026, when we get to our next generation of products, we expect to be at an 8% margin or better. And that's going to come through several things as we have to be relentlessly focused on the BOM and reducing our costs. And we have the talent that's done that and can do it and knows how to do it, and so we're focused there. And then with the footprint that we will put in for our electrification business will be efficient. And then it's volume and scale and top line growth. And so those 3 things are how we're going to grow to the 10%. And as Jim said and I've said, we're not going to stop there. And the thing about Jim is, yes, we have to keep improving. He is a driver, and that is fantastic. And we're not going to rest on our laurels, and we're not going to stop, and we're going to keep going.

One other potential avenue is sort of the simple connection to the asset, and it's not so simple. But I mean, just thinking in simple terms, and you're sort of starting to indicate that there might be opportunities for longer lifetime revenue and you're doing this in the Ford Pro, right? I mean, you're doing this on the commercial side as we speak already, but Ted is going after it a little bit harder and continue to develop that business. What kind of opportunity is there on the Pro side? And then if you think about sort of the interchange and learnings between the segments, what could that potentially mean as you're connected fleet grows and grows and grows on the retail side and getting after lifetime revenue? Because it just seems like a massive opportunity that might even be bigger than what you're looking at right now.

Yes. And John, the thing about this in lifetime revenue and lifetime value of the customer and where we're headed in this industry, we've known each other a long time. If somebody would have said to me 5 years ago, how's the last 10 years of your career going to work out? Well, it's going to be capital intensive. Margins are going to be difficult and those who have the freshest lineup are going to have an advantage for a period of time. And we're going to continue to battle it out. That's completely changed. Now with these connected platforms, the services and experiences. And I agree with you, Ford Pro is going to be the area where we see that first between telematics, fleet management, charging management, making those vehicles a better tool and improving the productivity for those customers. I think that's going to be the initial opportunity. Plus, it's that service element. As we have that connected relationship, we lose a ton of that post-warranty service. That's huge. And we bring that in as well. And I think people underestimate just how big that is, post-warranty and the opportunity there. So it's not only the revenue growth on the top from the services, it's that vehicle service revenue that we lose at post-warranty that's going to help us. Plus then when you get that sticky network and the combination of the services and the management, then you're going to want to keep in the Ford family. You're going to want to keep your fleet Ford and potentially, get a better penetration into folks' -- their fleets with more Ford vehicles, because a lot of those fleets are mixed. So there's an opportunity there.

If you were to think kind of roughly -- I mean, this is very rough and I probably don't have exact data on something like this, but your general revenue cutoff is probably around 4 or 5 years where the vehicle is coming back to the dealership. And then there's the other 15 years or the life of the vehicle. Is it something that's roughly that simple? And then saying, "Okay, we have to all figure out how much revenue occurs," after that, how fast -- how far you can go down. But I mean would it be going to 10 years in trying to work with the vehicle? I mean, I think Honda just made an announcement, they're doing CPOs now into 10 years, right? So that, like, increases. Maybe they're tethered down to 10 years. Is it down to 10 years? Is it down to 15 years? Or is it the full life cycle of the vehicle and trying to really capture almost everything in that full life cycle?

It's the full life cycle. It's capturing everything and then managing that for them. When is the optimal time for a fleet to manage their vehicle and trade it out and move into the new product? So it's the complete life cycle management, lifetime of the vehicle. How do we have that lasting relationship with the customer?

And how important are the dealers in that process?

I think they're going to be very important, especially on the Pro side because service is critical. Uptime is critical for our commercial customers. We can't afford any downtime. So making sure that we're out in front of issues, making sure that they can get the vehicles in to be serviced. Or we can go and service them where they're at, so they don't lose downtime is critical, and that's going to be important for us with our dealer partners.

Okay. Maybe switching gears a little bit more to the near term and certainly steering clear of guidance for the year or anything like that. But I mean, obviously, there's big issues in the world, chip shortages, rolling shutdowns in China, Ukraine invasion and a lot of disruption in the supply chain. As you think about the lessons that you've learned here. How do you manage this better in the future as Ford, with your partners at -- in the supply base? There's simple stuff like maybe localizing more supply or building buffer stocks. I mean, how do you think about this and managing it go forward? So this kind of volatility that we're seeing right now might not occur in the future.

Yes. We have learned a lot over the last 2 years. I think the industry perfected the just-in-time management and the inventory. And it's come back to prove now as we've moved into higher-tech, more complex vehicles and products that we have to approach it differently. Buffer stocks is one approach. We have to dual engineer important commodities. We have to get down into the supply chain. We can't just rely on our Tier 1s to manage the full supply chain. There are certain commodities that are critical. And then you have to look at adjacencies. No longer is it really a vertical around the automotive industry, but you look at the chips. There's adjacent industries. As their demand ebbs and flows, it impacts us as well. And so it really is changing our approach to managing the supply chain, managing our partnerships. And thinking about it more as a tech company would because they've been dealing with this for years. And Jim has spent a lot of time with tech CEOs. Lynn comes from the tech industry. She's experienced. I've spent time with tech CFOs, understanding how they manage the business, how they manage supply chains and we're learning from that.

So one of the really positive outcomes from this is we've gone through -- and I think we all would agree that we -- for a long time, we've even talked about maybe underproducing demand and having the support for pricing. And now we're really finding out that it really works, right? I mean a shortage of inventory really allows for better pricing. As we go through this and we work through supply chain calamities -- they're not even kinks, calamities at the moment and things normalize, where do you think you'll head as far as inventory? I mean, and there's kind of a lot of people that will say, hey, listen, the automakers have not learned their lesson. They'll overproduce as soon as they possibly can. I don't think that's what you guys are saying. But I'd love to hear what you're saying there, first, on the inventory management. And then second, on the pricing opportunity. We've just [ set up ] a dealer board in here, a couple of big dealers, we're talking to a lot of dealers lately. Their grosses are through the roof, which means that their pricing is high. So there's this question of if the dealers who are making lots of money; the ATP, if you will, of what they're selling is far above and beyond what you're realizing and they're getting a lot of this benefit from the shortage. Is there an opportunity on pricing or inverse pricing that you may actually capture even more than what you have been so far?

Yes. So from a pricing standpoint, we have been raising pricing. We were doing it last year. We've continued. Vehicles are transacting at or above MSRP. I think it was Edmunds that came out with a report recently, and I think it was quite revealing. Our transactions are right at or just below MSRP, and I think we were the closest of anybody. And so in this period of time, there is opportunity, and we've been taking advantage of that from a top line standpoint and we'll continue to do so. We're watching it very closely. We want to make sure that we're balanced, though. We have to keep the consumer in mind. We have to understand that at some point, as supply comes back, equilibrium is going to come back into play and pricing is going to come down, but that is going to take some time, as we've talked about. And the disruptions that have been happening this year, it's pretty opaque on when that's going to be. So we're watching that very closely, and we have been very thoughtful about our pricing, and we've been taking pricing.

And when you think about, though, the inventory levels, I mean, there's -- I mean, I think Jim's had some public comments about, like, not returning back to where things were. I mean, how do you -- I mean, how do you think about that? And then also, there's just significant concern that you might lose the entry-level customer as you focus on higher mix, higher profit models. Is there an opportunity to kind of keep them in the Ford family and use used vehicles as your entry-level vehicles and kind of have a very nice symbiotic ecosystem of people -- keeping people in the Ford family and not losing them at the early stages and working them into the family that way.

Yes. So we are not going back to the old inventory levels. Jim has been clear about that. We're setting up our whole processes around a leaner inventory structure. 30% of our sales in the fourth quarter, and we talked about this, earnings came through online orders. And so that's going to be a bigger part of what we're doing. So that's going to continue to grow and continue to be an important part of how we manage things going forward. I do think there is opportunity in the life cycle management of used vehicles and how that can play into entry-level. But I also like we've done with Maverick as an entry-level price point at $20,000, and that vehicle has been very successful so far. And that's bringing people into the family. And as they continue to grow in their ability to afford a higher-priced vehicle, we can move them up into Rangers and F-Series, et cetera, or into one of our passenger vehicles. So it's definitely an opportunity, but we are not going back to the old model. We're going to focus on giving our consumers the flexibility and we're going to continue to push that online presence.

Another sort of near-term issue that's going on right now is cost inflation. It's -- be on the raw mat side from the suppliers, ultimately, labor maybe next year with the UAW contract. Are there different things that you might be able to do as far as engineering or other cost-saving actions over time that might mitigate this or create some hedging over time? It's a pretty extreme -- I'm not talking about in the next 12 months. I mean, just thinking about how you might operate the business differently over time.

Yes. The relentless focus on cost needs to be there. We have to improve productivity across every element of the business. And that's -- in a high inflation environment, you're going to have to drive productivity. So we are focused on that. And part of that will come back through the complexity reductions we've talked about on the Blue side, moving to more modularity. Extending the life of certain components or not reengineering and redesigning them and optimizing. So I think there's a lot of opportunity there. That's why the $3 billion of structural cost improvement is so important as we see some of these headwinds. But there's a lot of opportunities to simplify our operations, to increase productivity, to drive efficiencies that way as a partial hedge against what we're seeing from some of the inflation.

And one of the extreme issues on raw mat inflation is lithium, cobalt, nickel, I mean, all the input costs that are somewhat new for EVs. How are you thinking about sort of sourcing and making sure you have security of supply over time as well as hopefully mitigating some of the risks of those really inflating as demand increases?

Yes. It's going to be more about securing supply in the near term, absolutely.

There's just everything. We're all getting these alarms.

So it's about securing supply. And you saw earlier this week, I think it was Monday, we had an announcement where we have a nonbinding MOU to secure 25 tons of lithium. So we've been very active across all the components of the battery, and you'll see more from us over time in that space. But the winners and losers in the near term are going to be determined in the next few years when it comes to battery electric vehicles. That's why I like our first-mover advantage we have E, Lightning and the electric transit and the focus we have on securing that supply chain to build out our capacity through '26 and get our 2 million units.

And if we think about the F-150 Lighting, is that where you think the tipping point could be on EVs, where Joe Six-Pack was a great consumer, right? That -- and all of a sudden realizes, "Hey, listen. That fancy Mach-E or those Teslas on the coast are not for me, but this F-150 Lightning in certain use cases is just a better product. I want this all day long." And then once it's in his driveway, his neighbor sees it and just -- like, it just gets socialized and then it just kind of grows from there. Is that -- do you think that might be the tipping point for EVs for Ford and that really in its -- the Mach-E, you could argue, is the tip of the spear originally, but this F-150 Lightning might actually really be the game-changer?

It's a game-changer. I think it is. I think it is a game-changer. 70% of the customers are new to the segment. I think there are a lot of folks out there that wanted the utility of a pickup truck and everything that it brings. And then the Mach -- the Lighting, the utility that is even greater with Pro Power Onboard, et cetera, et cetera. But they didn't want what came with that from an environmental standpoint. Now they have the option and they can come into this vehicle. The utility of is great. The practical tool that's there with Pro Power Onboard is incredible. The front is a feature that people are just blown away by. And so now you have so much that you can do with that vehicle and it's electric. So I do think it's a game-changer. And the demand we're seeing -- we've seen has been incredible. So, yes.

And I give you a little bit of hard time on the Mach-E. I think it was a few years ago, we did the prototype drives, and we're like, woah, this is probably the best EV we've ever been in. I mean, and then ultimately finish and quality in the total product. You could argue it might be the best EV on the road at the moment. I think it's a very debatable point. It shows that Ford has got the ability to do this, right? And I think the Lightning has shown you've got the ability to do this. Why do you think that there was -- that the volume constraint on the Mach-E was -- I think it was originally 50,000 units was the original volume targets. And now this could be a product that could be hundreds of thousands of units if you unconstrained things. I mean, what do you -- I mean, you did the products, but somebody in product planning said, "Hey, this is -- maybe I should talk to someone [in Car Works ] maybe it'll help them out on the volumes. But I mean, those volumes could be hundreds of thousands of units. I mean, it's that sweet spot, small crossover, fantastic product. What do you think you guys missed there? Because you got the product spot on.

Well, that's one of the key learnings. And it's part of what went into creating the divisions with great engineers. That's clear, right? And when we put their mind to it, they created a great electric vehicle. But we still had an ICE mindset around that vehicle in many ways, and that showed up in the volume calls we made, right? And so it's that focus, it's that sense of purpose. It's that sense of mission and that's where the A team can focus on that in a different way, and their mindset will be different. And so I think that's part of what happened to us, is we still had a bit of an ICE mindset and that influenced our volume calls, that influenced the capacity we put in place. And now we're breaking those constraints, and we're seeing the demand. And we're setting up the division that is going to be completely focused on electric vehicles and have a different mindset.

And just -- I'll turn it over to Doug to ask a question in one second. But the allocation of capital across segments is going to be somewhat of a new challenge because it's going to be allocated in a way that's a little bit different than the segmentation in the past. And on EVs, you're not going to be profitable for a while. So the return characteristics there are looking at sort of mid- to long term, and that makes sense all day long when you are mid- to long term. But as far as you think about cap allocation amongst the segments, I mean, how do you -- how are you -- is the CFO thinking about that? Because if you looked at it right now, you might say, well, ICE is the highest [ total ] return on invested capital, so that's where all our capital should go. And obviously, that's not the right answer. But I mean, how do you think about that at the moment? And is there almost no capital going to ICE powertrain development? There's product development, I'm sure. And is all powertrain investment going towards EVs?

Yes. So like any business, you have to invest on growth potential in the future and the returns. And so the capital allocation -- the thing about it right now is that we're not constrained. We have the resources to invest in the growth opportunities in front of us and the vertical integration for E that we need to secure the supply -- the supply chain. And so we'll look at each of those opportunities, those growth opportunities on the merits of what they'll deliver over time and what's the return on that invested capital. And there'll be competition for that capital and the best business is going to win. So -- but at this point, right now, we have the flexibility. And we want the teams coming up with more ideas. We want more growth initiatives. We want those prospects out there. So it's a typical way that any company does it, is where are you going to grow, where are you going to get the best return and those items are going to get the capital. And as you say, our ICE products, F-Series, Super Duty, Bronco. Those are great products, great returns. They're going to be around for a while. We're investing.

John, thank you. The balance sheet's in great shape. You've done a lot of balance sheet improvement over the last several years. How do you feel that, that balance sheet is going to play in your EV kind of transition? And what flexibility do you have on the balance sheet? And kind of where do you want the ratings to shake out and deleverage?

Well, our priorities continue to be the same that we've had, which has allowed us to improve the balance sheet over the last few years. We're going to invest in our growth opportunities, our profitable growth opportunities. We're going to continue to work on the balance sheet, strengthen the business to get back to investment grade. And then we're going to focus on total shareholder return. So that structure has served us well, and that's going to continue to serve us as we move forward. I think there's additional opportunities we have on the balance sheet to do things. We did a big move last year with the green bonds. We lowered our average effective cost of debt by about 200 basis points. So we'll continue to work that. It's not going to be as big as we had last year because it's more on the edges to do those improvements. And I think that as we move forward and we continue to focus on strengthening the business that's going to play into our ability to strengthen the balance sheet even further.

Great. Well, with that, we're out of time, John. We really appreciate you joining us here in person. It's really fantastic to see you and hear all about the Ford story. And we're really excited about learning more and more, particularly in 2023 with the new segments. So thank you so much, John.

Okay. Thank you, John.

Thank you.