Ford CEO Jim Farley says employee pricing will continue as new auto tariffs loom
Ford CEO Jim Farley announced Wednesday on CNN that the automaker is extending its “employee pricing” offer to car buyers for another month, through July 4, to encourage sales to consumers nervous about rising prices because of new tariffs on imported cars and auto parts.
Farley spoke with CNN’s Erin Burnett to talk about auto tariffs, the U.S. economy and the economic impact of automaking at U.S. plants.
But Farley said he can’t say that Ford prices won’t go up after the end of the employee pricing offer. He said part of it will be determined by what competitors do with their pricing, since Ford makes more of its vehicles in United States than other automakers.
“We want to keep our prices competitive and low,” he said. “We think this is an opportunity for Ford. We have a different footprint, a different exposure for tariffs.”
Auto tariffs, including a 25% tax on all imported cars, have shaken up the global industry. The import taxes will increase the cost for manufacturers, which in turn is expected to raise the price buyers pay for cars later in the year.
About 46% of U.S. car purchases last year were for cars or trucks made in a foreign country, according to S&P Global Mobility. Mexico was the largest source, shipping 2.5 million cars to U.S. dealerships. So far, car buyers have been able to purchase imported vehicles shipped here before the tariffs took effect, but those inventories will soon start to run low.
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And soon not even American-built cars will be tariff free. New tariffs will go into effect this Saturday on the parts used to build cars and trucks in the United States, which will raise the cost of production.
“We have to import certain parts,” Farley said. “We can’t even buy those parts here.”
President Donald Trump announced Tuesday some relief from tariffs on the auto parts that are set to take effect this Saturday. But automakers will still have to pay tariffs on cars and trucks they build here if more than 15% of the parts come from foreign suppliers.
“We have worked with his team every day for the last couple of months,” Farley said when asked if he has a direct line to Trump. “We recognize how important this moment is to get this all right and try to figure it out together. I have to say the engagement there has been very high.”
“We’re all trying to figure this out to do the right thing for the country,” he added. “It’s going to take a little time.”
Farley said it’s not clear that American automakers can source all of their parts from U.S. suppliers, and he defended the use of cheaper imported parts.
“The affordability of parts is a really important thing for America because we’ve got to keep the vehicles affordable,” he said. ‘Yes, we want to make them like Ford does in the U.S., but we also want to make the vehicles affordable that are built in the U.S. The parts are critical for that.”
Anderson Economics Group, a Michigan-based research firm, estimated a month ago that the auto parts tariffs would raise the cost of producing cars at American plants between $3,000 to $12,000. Tuesday’s change would lower the tariff cost by about $900 to $2,500, the company estimated.
“It’s a significant reduction, but it’s still a big tariff impact from point of view of the consumer,” said Patrick Anderson, the founder and president of the research firm.
