strategies of two of America’s most famous companies.
The question that bedevils American C.E.O.s is how close to get to Chinese frenemies: companies that can be both friends as partners and enemies as competitors. The Chinese market is lucrative, but American companies that have entered it have given the Chinese valuable intellectual property — sometimes willingly, sometimes not.
As Chinese companies have caught up and in some cases surpassed American companies in technology, the new question for the American ones is whether to attempt to fight their way back to the forefront, at great cost, or cede the market to the Chinese and become their customers.
That’s the dilemma these days for Jim Farley, who has been the chief executive of Ford since 2020. The Wall Street Journal reported this month that Farley returned from a China trip in May amazed by Chinese companies’ progress in electric vehicles, telling a fellow Ford board member that “this is an existential threat.”
Ford has predicted it will lose around $5 billion on its electric vehicle operations in 2024. That’s in spite of high tariffs that block Chinese E.V.’s from the American market. In August Ford announced it was pulling the plug on an all-electric, three-row sport utility vehicle and delaying the rollout of a large electric pickup truck by about 18 months, to 2027. This BYD feature impressed Jim Farley:
Farley is steering a middle course with regard to China. Ford is taking subsidies from the U.S. government to make batteries in Michigan. But it’s licensing technology for them from China’s C.A.T.L., the world’s largest maker of E.V. batteries. That amounts to an acknowledgment of Chinese technological leadership, coupled with a commitment to in-house manufacturing.