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Back to the Future

For a company that once revolutionized manufacturing with its assembly line mode of production, Ford has been late to the vehicle electrification game. Unlike Toyota, whose Prius model was the world’s first mass-produced hybrid vehicle, or Tesla, the current leading electric car manufacturer, the iconic “Big Three” American automaker has yet to establish a leading position in vehicle electrification. In fact, not only did Ford not make the top 5 automakers by global electric car sales for 2020, but as recently as 2018, Ford ranked 18th in terms of its percentage of total US sales that were EVs.

In 2021, however, a new electrification story seems to have begun for Ford. Ford’s F-150 Lightning, the electric version of its best-selling pickup truck, was announced on May 19. Ford says the truck will combine features like a standard battery range of 230 miles—300 miles for the extended version—alongside the most torque of any F-150 ever made (a 2019 video shows a single prototype pulling 10 train cars stacked with 42 other F-150s). Ford’s creative use of electric vehicle technology includes a front trunk with four electrical outlets and two USB chargers; a fully-charged F-150 Lightning can become a backup power source for a house for three or more days.

The Lightning announcement, which followed on the heels of Ford’s reveal of its Mustang Mach-E all-electric crossover SUV, confirms the company’s strategic shift away from passenger cars and towards trucks and SUVs. But more importantly, it seems to provide evidence of Ford’s commitment to its stated climate goal of carbon neutrality by 2050, backed by Science-Based Targets including an absolute reduction in scope 1 and 2 emissions of 76% by 2035 (2017 baseline year), and a 50% reduction in scope 3 emissions per vehicle/kilometer by 2035 (2019 baseline year). Among its headline-grabbing vehicle announcements of the last several months, Ford detailed its plans to sell only electric vehicles in Europe by 2030 (and only electric or plug-in hybrid vehicles by 2026), doubled its planned investment in electric vehicles to $22 billion, and then increased that figure yet again, to $30 billion.

The result could help drive the kind of momentum shift that climate scientists and activists have long been calling for: a rapid, widespread adoption of electric vehicle technology that helps accelerate the shift away from fossil fuels. Considering Ford’s 40% reduction in operational carbon emissions since 2011, its “A” scores from CDP on Climate and Water in recent years, and its voluntary adoption of California’s strict fuel economy standards in the face of the Trump administration’s attempt to roll them back, the company’s pivot may seem less abrupt.

There are other areas where Ford needs to work harder to catch up. In 2014, several employees filed suit over sexual and racial harassment they said had been taking place at two of Ford’s Chicago plants since the 1990s. The employees said the harassment continued into the 2010s, in spite of Ford’s ongoing efforts to change the culture at the plants. In 2017 Ford settled the claims for $10M, after taking several new steps including disciplinary action, firing employees, increasing its human resources staff at the plants by 30 percent, and putting additional policies in place to prevent harassment. Notably, however, while Ford’s public code of conduct for employees includes a sexual harassment policy, the company still does not mandate annual sexual-harassment training—an additional step we believe needs to be taken, especially given the recent history.

But in other areas, Ford’s long history of labor relations seem to have prepared it well for the demands of a modern workforce. In 2019, Ford reached agreement on its four-year UAW labor contract in relatively short order, and without the 40-day strike undergone by rival GM. Today Ford reports that 79% of its labor force is unionized; among other benefits, the company offers 16 weeks paid parental leave for primary parents and 8 weeks for secondary parents. In 2021, Ford was included in the Bloomberg Gender-Equality Index Survey and recognized for a high level of disclosure and overall performance, with a score of 78.5 (out of 100). In its responses to the survey, which Ford voluntarily made public, the company reported that women represented 27.5% of its overall workforce (of which 11% were multi-cultural), 15.8% of its senior management, 22.9% of its middle management and 31% of its fiscal year promotions. The company also performed a global pay equity audit including all elements of compensation, which  revealed a global mean pay gap of 18% (while its salaried pay gap ratio is 98.2%). While these numbers reveal additional work to be done, Ford’s high level of disclosure is unusual and encouraging, providing the kind of public baseline that typically compels companies to improve.

In its product strategy, Ford appears to think it has found a way back to the future of auto manufacturing. By rapidly electrifying its hugely popular, larger vehicles, the company wants to get ahead of rivals like Tesla and GM and become the leader in electrified pickup trucks and SUVs. Regardless of outcome, we are gratified to see how closely and quickly Ford is aligning its business plans with its increasingly ambitious environmental goals, and bringing a level of transparency to other areas of its business that suggests more progress to come.