LOUISVILLE, Kentucky — A small team of Ford Motor Co. engineers in California launched work three years ago to develop an electric vehicle platform and production system that the Dearborn, Michigan-based automaker says will be as radical as the Model T. But executives insist that doesn't mean Michigan is being left behind.

"We're taking the fight to our competition, including the Chinese," CEO Jim Farley said this week during a presentation revealing details of the automaker's EV plans, "with teams across the United States, designers from California, engineers from Michigan, American workers right here in Louisville."

Michigan's heritage in building stuff and driving efficiency remains an important part of vehicle manufacturing, but clinging to old ways can hinder agility and innovation prized in startups amid increasing global competition. Combined with the growing importance of software, autonomy and electrification, automakers are investing in development centers in Silicon Valley, Atlanta, Tokyo and wherever they're seeing breakthroughs in technology.

Michigan needs to ensure it doesn't get left behind, analysts say. Glenn Stevens, executive director of MichAuto, the Detroit Regional Chamber's automotive arm, recalled visiting tech companies a decade ago in Silicon Valley where he found respect for Michigan's manufacturing history.

But he also found a perception of Michigan being the home of "metal-benders" while innovators were on the coasts.

"You have a company, Ford, that has a 120-year-old history and a way of doing things, both right and wrong, and they realize: What got you here won’t get you there," Stevens said about Ford's plans. "It is a risk, but I'm optimistic. The spirit of innovation is here, but we as a state and an ecosystem and industry have to foster that."

Developing Ford's new EV platform and manufacturing process was a team in California that incorporated engineers who had been based in Dearborn, plus other experts who traveled at times to share their knowledge on engineering, manufacturing and supply chain.

"For a long time, we were an insular company in an insular industry in an insular state," Ford Executive Chair Bill Ford told the Mackinac Policy Conference in late May. "If you travel to California or other places where there was this whole tech revolution taking place, you realize that there was a whole world being developed that wasn't being developed in Michigan, and most of Michigan, including the auto industry, wasn't even aware of it. It's why it's so important that we continue to attract talent to the state and build the future here, not in California, but build it here."

Ford this week introduced the Universal EV Platform to underpin multiple future all-electric models and a manufacturing system that would replace the traditional moving assembly line, reducing needed parts by 20% and increasing production.

The projects came from the company's "skunkworks" team, a term pulled from an innovative, compact unit at defense contractor Lockheed Martin Corp. The Ford group has roughly 500 engineers working outside of a new campus that it officially introduced last week in Long Beach, California.

"The rule that we gave them was: Break everything," said Jim Baumbick, vice president of advanced product development, cycle planning and programs.

Farley described the innovations as a "bet" for the company's future, and the system translates to a fifth fewer parts.

"I wouldn't say (we have) too many employees," Kumar Galhotra, chief operating officer, said during a roundtable. "What I would say is this way of working, this way of designing the vehicle, has made the vehicle more efficient. And will we find engineering efficiency as part of it? Absolutely, which would mean that we have more workforce to work on our bigger portfolios."

Ford isn't abandoning the internal combustion engine and hybrids anytime soon. With a bumpier-than-expected adoption of EVs by U.S. consumers because of their price, range anxiety and access to charging infrastructure, executives said Ford's diverse powertrains alongside derivatives of current product will be important to its growth over the next few years.

The Trump administration's efforts to dismantle what it calls an "EV mandate," including greenhouse gas emission regulations and taxpayer-funded incentives for EV purchases and leases, also won't spur EV market penetration.

Ford's innovations first will support a $30,000 electric midsize pickup to launch in 2027 at Louisville Assembly Plant in Kentucky. A $2 billion investment will secure 2,200 hourly jobs there, where there are more than 2,800 hourly workers today on two shifts, according to Ford's website. Farley, however, said no one will be "orphaned," with Kentucky Truck Plant nearby. Ford also will offer a special retirement plan exclusive to Louisville, spokesperson Jess Enoch said.

Supporting that program also will be the $3 billion battery plant in south-central Michigan's Marshall at which Ford has committed to creating 1,700 jobs. It expects to be the first U.S. producer next year of lower-cost lithium-iron-phosphate batteries for EVs.

The manufacturing changes add complexity in the development process and require more engineering prowess. But parts reductions are inevitable for any automaker pushing to fend off competitors like Chinese EV giant BYD Co. Ltd. that offer low-cost EVs, said Sam Abuelsamid, vice president of market research at auto communications agency Telemetry.

"There’s no way around that," he said. "They need to move to this sort of vehicle architecture that reduces the total number of parts components."

Dearborn's role

Farley has said it was an intentional decision to separate the skunkworks in Silicon Valley from the walls of Ford's aging product development center.

"My badge didn't work in the building for three years, and I wanted it that way. That was the only way we could get the kind of innovation that we need," Farley said last month at the Reindustrialization Summit in Detroit, adding in a humorous note: "I never snuck in. I was invited a few times and then escorted out, because they were probably scared I would have some traditional suggestion. But the fact is ... we have to beat BYD."

Alan Clarke, executive director of advanced EV development, said one of the first things the company did was embed manufacturing expertise from Dearborn into skunkworks to set the baseline for the product architecture off the platform.

"The marriage of both worlds in terms of the expertise of a 122-year-old company with massive capabilities and supply chain and industrialization in general was really important to not only engage early, but also ensure that the ideas were able to fail fast," Clarke said. "And that's a startup mentality.

"When you're moving quickly, and you want to really quickly determine: Is this actually more efficient? Does it actually save us money? Do we still deliver what we need to to the customer in order to effectively make the product? It's a lot easier to do that when you have data from hundreds of other models and decades of experience."

Skunkworks had a "core" team, but others from Dearborn were flown in and out based on knowledge needed. As a result, over time, there was greater integration with more of the "mainstream" groups for engineering, manufacturing and supply chain, Clarke said.

Part of being embedded, Galhotra added, was then to return to Dearborn and bring some of those learnings. Future sourcing, he said, already is being influenced by skunkworks, and there's been a two-way conversation in manufacturing about it, as well. The increasing use of artificial intelligence is a part of that, said Bryce Currie, vice president of manufacturing for the Americas.

Additionally, the former program manager for skunkworks is rewriting Ford's global product development system, Baumbick said during the roundtable.

"We have an active team," he said, "that includes people from the West Coast, in Dearborn, obviously, global participation from all the skill teams, to take the learnings that we've had to date, capture some of those and then incorporate them into future model programs."

Integrating these new ideas will be Ford's largest challenge, Abuelsamid said: "It’s always hard when you have a legacy organization to take new stuff, to change a product development culture and a management culture. To create a small, separate branch and say, 'Go do something different,' there's always resistance to that."

He pointed to the defunct Saturn brand within pre-bankruptcy General Motors Corp. that was given independence in manufacturing, labor relations, retail and other areas, but whose ideas ultimately didn't translate to the greater company.

Additionally, he noted, Ford's Team Edison sought to create a profitable EV, which resulted in vehicles like the Mustang Mach-E and F-150 Lightning. That's evolved into the Model e EV division, which lost nearly $5.1 billion last year. And Ford has separated a team again to create this skunkworks group.

Michigan investment

Ford also has invested substantially in its local footprint as part of efforts to attract and retain the tech talent it needs. It plans to have renovated 90% of its buildings by 2027.

Model e now is based in the reopened Michigan Central Station in Detroit, which also houses some staff from the Integrated Services software group. The former train depot anchors a $940 million advanced mobility technology campus.

Ford also is undergoing a Dearborn campus renovation experts previously estimated at $1 billion. The Ford Engineering Lab reopened last year. The newly constructed, glass-faced building that will replace Ford's 1953-dedicated product development center also will house many more employees before the end of the year.

In May, at the Mackinac Policy Conference during a conversation between Bill Ford and daughter Alexandra Ford English, a member of the company's board of directors, English emphasized the importance of workspaces in attracting and retaining talent.

"It's a great place to live," she said of Michigan. "It's a great place to raise a family, and people want great places to work. We talked about that, and they also want incredible problems to work on. We talk about that a lot, as well.

"We have those things here in Michigan, and so my hope is that the investment continues, and the momentum continues, because we are in such an incredible time right now where Detroit and Michigan and our businesses and the whole state has a really great reputation, so much momentum, and it's ours just to accelerate."

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