Ford Motor is treading a fine line as it seeks new partnerships with Chinese automakers to enhance its global competitiveness, yet remains cautious about bringing them to its home turf.
On April 29, Ford president and CEO Jim Farley told analysts in the US that his company leverages global partnerships and even IP sharing, “including with the Chinese [automakers], to grow our business around the world.”
His remarks came in response to a question over media reports about Ford negotiations with Geely, China’s second largest automaker behind BYD. A recent WSJ story said that discussions on collaboration in Europe had evolved into exploring whether Ford might license Geely technology in the US.
“How I would think about it is, Ford continues to be a global company,” Farley said. “We want to have the rights to win around the globe, and we need IP and partnerships outside the US to do that.”
The talks with Geely have reportedly stalled, but it remains a burning question when and whether Chinese automakers might make inroads into the US, where they are effectively banned.
US President Donald Trump has signaled the country’s openness to Chinese players, as long as they make their products stateside. “If they want to come in and build a plant and hire you, and hire your friends and neighbors, that’s great, I love that,” Trump told the Detroit Economic Club in January.
Trump is expected to travel to Beijing later this month to discuss a range of topics, including economic issues, with Chinese President Xi Jinping.
Farley, however, was skeptical of opening the door to Chinese competitors, framing it as a “national security” issue.
“We are totally dedicated to a thriving US auto industry, and of course, safeguarding our country’s industrial base,” he said, adding, “We are really, fully committed to the level playing field here in the US.”
Farley also drew a comparison to Japan and South Korea, two key security allies of the US. “When we see China, Japan, and South Korea, they really prioritize their domestic auto industry and manufacturing for the same reasons that I mentioned,” he said. “When it comes to the US industry, we are extremely protective, as we should be, like China, South Korea, and Japan.”
The threat from Chinese rivals is real for US automakers, not at home, at least for now, but in other markets like Europe, where Ford is reportedly interested in forging an alliance with Geely.
Geely did not immediately respond to a request for comment.
Mary Barra, chairwoman and CEO of Ford competitor General Motors, said during the company’s first quarter earnings call on April 28, “In the markets outside of the US, … there already is significant Chinese participation.”
GM is striving to compete in those markets with a mix of cars “designed and developed in the United States, as well as those from China,” taking advantage of its joint ventures with Chinese state-owned partners. The latter, she suggested, are vital, “especially at some of the price points to meet some of the more price-sensitive developing markets.”
For GM, its South Korean joint venture is another key export hub, where its long-term Chinese partner SAIC Motor is also a minor stakeholder.
Ford is using Chinese joint venture production as an export base as well. Farley previously described China as a “wild card” that all automakers must contend with, vowing to be “opportunistic” with its presence in the country.
Bringing such cooperation to US soil will be politically challenging.
On April 29, Bernie Moreno, a Republican senator from Ohio, and Elissa Slotkin, a Democrat from Michigan, jointly introduced a bill “to prohibit the importation, manufacture, sale, resale or introduction into interstate commerce in the United States of connected vehicles and related software and hardware associated with foreign adversaries.”
While the bill mentions four “covered” countries—North Korea, Russia, Iran, and China—Chinese automakers are the obvious target.
“The American auto industry is the backbone of the American industrial economy,” Moreno said in a statement.
“We cannot afford to make the same mistakes globalists have made for decades and see these great American companies devastated by predatory and massively subsidized Chinese state enterprises hell-bent on the destruction of our economy,” he said, referring to cases in Europe, Mexico, and other markets he described as being “overrun by Chinese predators.”
Slotkin, representing the state where both Ford and GM are headquartered, labeled Chinese cars “a serious threat to America’s national security and Michigan’s economic security,” as they are “surveillance packages on wheels, with the ability to collect on American citizens and sensitive sites.”
The Democratic senator said opening the gate would allow the “Chinese Communist Party’s playbook of heavily subsidizing their product, underselling the competition, and then having a monopoly over that sector” to be applied in the US.
This, she said, would put “Michigan’s auto industry and our millions of workers at risk.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.