(Editor’s note: Effective March 1, 2018, Joy Falotico serves as group vice president, The Lincoln Motor Company, and Ford Motor Company chief marketing officer. In this role, she has responsibility for leading the continued evolution of Lincoln as a world-class luxury brand and overseeing all Lincoln operations globally, including product development; marketing, sales and service; and all team members supporting the brand. In addition, Falotico will lead marketing functions and efforts for Ford Motor Company to connect more closely with customers by identifying new opportunities to serve them.)
On Feb. 21, Joy Falotico, former chief executive officer, Ford Motor Credit Company, spoke to members of the Ford Retired Engineering Executives group at a gathering in Dearborn. Falotico started her talk with a summary of Ford Motor Company’s recent performance and explained how Ford Credit comes into play in Ford’s business.
“A key part of Ford Credit’s value proposition is that it is here through all cycles for Ford,” she said. “The Ford Credit side had higher margins and high share during the downturn, when other captive automotive financial arms had difficulties and went away.”
Falotico said Ford Credit contributes considerably to Ford Motor Company’s overall profitability, and delivering on the company’s plan for 2018 is a priority. A late-stage credit cycle and downturn readiness are always at the forefront, she said.
“We should be facing some recessionary pressures at the end of this cycle but we’re not seeing it,” she said. “Our portfolio is really strong, and we continue to stay dialed in and watch very closely to make sure we’re ready.”
Changes to U.S. tax law and wage increases are contributing to a more positive outlook for the company, said Falotico. Ford Credit expects continued strong profit in 2018, though lower than its $2.3 billion pre-tax profit in 2017.
Falotico said Ford Credit is monitoring the Brexit situation closely and is preparing to launch a German bank to ensure continued support for Ford, its dealers and customers once the United Kingdom exits the European Union. “We are a U.K.-domiciled bank, and we use passporting directives to give us all of our branches across Europe,” she said. “We may lose that with Brexit, so we’re launching a German bank and using that structure to facilitate markets that require bank licenses in Europe.”
Falotico also addressed a question about how Ford is responding to customer concerns in collecting information with its connected vehicles. “Our customers have the opportunity to opt in to any data usage,” she said. “So the question becomes, how do we make a business out of this?”
The answer, she said, is to do something so valuable for customers that it creates an upside in which they are comfortable sharing their data. “A lot of us share data we don’t even know we’re sharing, so we want to be transparent about that,” she said. “We think that’s core to the value of Ford. All of the things we do with your data need to create value so you are willing to opt in and share your data with Ford.”