FORD ACCELERATING TRANSFORMATION: FORMING
DISTINCT AUTO UNITS TO SCALE EVS, STRENGTHEN OPERATIONS, UNLOCK VALUE
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Creates distinct
electric vehicle and internal combustion businesses poised to
compete and win against both new EV competitors and established
automakers
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Organizes Ford to
deliver for customers with the focus and speed of a startup at the
leading edge of technology, supported by deep expertise in
engineering and high-volume production
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Ford Blue will build
out company’s iconic portfolio of Internal Combustion Engine
vehicles to drive growth and profitability – relentlessly attacking
costs, simplifying operations and improving quality; will provide
world-class hardware engineering and manufacturing capabilities for
all of Ford
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Ford Model e will
accelerate innovation and delivery of breakthrough electric vehicles
at scale, and develop software and connected vehicle technologies
and services for all of Ford
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Ford Blue and Ford
Model e will operate as distinct businesses, but share relevant
technology and best practices to leverage scale and drive operating
improvements; along with Ford Pro, all three businesses are expected
to have discrete P&Ls by 2023
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Accelerates Ford+
plan to unlock growth and create value for Ford’s shareholders:
total company adjusted EBIT margin of 10% and annual production of
more than 2 million EVs by 2026; expect EVs to represent half of
global volume by 2030
VIDEO from Ford
DEARBORN, Mich., March 2,
2022 – Ford is continuing to transform its global automotive business,
accelerating the development and scaling of breakthrough electric,
connected vehicles, while leveraging its iconic nameplates to strengthen
operating performance and take full advantage of engineering and
industrial capabilities.
“This isn’t the first time Ford has reimagined the future and taken our
own path,” said Ford Executive Chair Bill Ford. “We have an
extraordinary opportunity to lead this thrilling new era of connected
and electric vehicles, give our customers the very best of Ford, and
help make a real difference for the health of the planet.”
Last May, Ford President and CEO Jim Farley introduced the Ford+ plan,
calling it the company’s biggest opportunity for growth and value
creation since Henry Ford scaled production of the Model T. The
formation of two distinct, but strategically interdependent, auto
businesses – Ford Blue and Ford Model e – together with the new Ford Pro
business, will help unleash the full potential of the Ford+ plan,
driving growth and value creation and positioning Ford to outperform
both legacy automakers and new EV competitors.
“We have made tremendous progress in a short period of time. We have
launched a series of hit products globally and demand for our new EVs
like F-150 Lightning and Mustang Mach-E is off the charts,” Farley said.
“But our ambition with Ford+ is to become a truly great, world-changing
company again, and that requires focus. We are going all in, creating
separate but complementary businesses that give us start-up speed and
unbridled innovation in Ford Model e together with Ford Blue’s
industrial know-how, volume and iconic brands like Bronco, that
start-ups can only dream about.”
Driving the change was recognition that different approaches, talents
and, ultimately, organizations are required to unleash Ford’s
development and delivery of electric and digitally connected vehicles
and services and fully capitalize on the company’s iconic family of
internal combustion vehicles.
The creation of Ford Model e was informed by the success of small,
mission-driven Ford teams that developed the Ford GT, Mustang Mach-E SUV
and F-150 Lightning pickup as well as Ford’s dedicated EV division in
China.
“Ford Model e will be Ford’s center of innovation and growth, a team of
the world’s best software, electrical and automotive talent turned loose
to create truly incredible electric vehicles and digital experiences for
new generations of Ford customers,” Farley said.
“Ford Blue’s mission is to deliver a more profitable and vibrant ICE
business, strengthen our successful and iconic vehicle families and earn
greater loyalty by delivering incredible service and experiences. It’s
about harnessing a century of hardware mastery to help build the future.
This team will be hellbent on delivering leading quality, attacking
waste in every corner of the business, maximizing cash flow and
optimizing our industrial footprint.”
Ford Model e and Ford Blue will be run as distinct businesses, but also
support each other – as well as Ford Pro, which is dedicated to
delivering a one-stop shop for commercial and government customers with
a range of conventional and electric vehicles and a full suite of
software, charging, financing, services and support on Ford and non-Ford
products. Ford Model e and Ford Blue will also support Ford Drive
mobility.
Ford Model e will:
Attract and retain the best software, engineering, design and UX talent
and perfect new technologies and concepts that can be applied across the
Ford enterprise
Embrace a clean-sheet
approach to designing, launching and scaling breakthrough, high-volume
electric and connected products and services for retail, commercial and
shared mobility
Develop the key
technologies and capabilities – such as EV platforms, batteries,
e-motors, inverters, charging and recycling – to create ground-up,
breakthrough electric vehicles
Create the software
platforms and fully networked vehicle architectures to support
delightful, always-on and ever-improving vehicles and experiences.
Ford Model e also will
lead on creating an exciting new shopping, buying and ownership
experience for its future electric vehicle customers that includes
simple, intuitive e-commerce platforms, transparent pricing and
personalized customer support from Ford ambassadors. Ford Blue will
adapt these best practices to enhance the experience of its ICE
customers and deliver new levels of customer connectivity and
satisfaction.
Ford Blue will exercise Ford’s deep automotive expertise to:
Strengthen the iconic Ford vehicles customers love, such as F-Series,
Ranger and Maverick trucks, Bronco and Explorer SUVs, and Mustang, with
investments in new models, derivatives, experiences and services
Help customers fulfill
their passions and daily lives with tailored brand and vehicle
experiences, from off-roading to performance to family activities,
especially for those situations when ICE capabilities are required
Deliver new, connected,
personalized and always-on experiences for customers powered by Ford
Model e’s software and embedded systems
Make industry-leading
quality and exceptional service a reason to choose and stay with Ford
Root out waste and
dramatically reduce product, manufacturing and quality costs and support
Ford Model e and Ford Pro through proven, global-scale engineering,
purchasing, manufacturing, and vehicle test and development capabilities
for world-class safety, ride and handling, quiet and comfort, and
durability.
Ford reaffirms guidance
for 2022 of $11.5 billion to $12.5 billion in company adjusted EBIT. The
high end of the range equates to a margin of 8% which, if achieved,
would be one year earlier than the company’s previous target. With these
changes announced today, Ford is raising its longer-term operating and
financial targets, including:
Company adjusted EBIT margin of 10% by 2026, a 270-basis-point increase
over 2021– driven by higher volumes, improvement in the cost of EVs, and
a significant decline in ICE structural costs of up to $3 billion
More than 2 million electric vehicles produced annually by 2026,
representing about one-third of Ford’s global volume, rising to half by
2030, capturing with EVs the same, or even greater, market shares in
vehicle segments where Ford already leads
In addition, Ford expects to spend $5 billion on EVs in 2022, including
capital expenditures, expense and direct investments, a two-fold
increase over 2021
Ford reiterated its commitment to achieve carbon neutrality by 2050, and
to use 100% local, renewable electricity in all of its manufacturing
operations by 2035.
“This new structure will enhance our capacity to generate
industry-leading growth, profitability and liquidity in this new era of
transportation,” said John Lawler, Ford’s chief financial officer. “It
will sharpen our effectiveness in allocating capital to both the ICE and
EV businesses and the returns we expect from them – by making the most
of existing capabilities, adding new skills wherever they’re needed,
simplifying processes and lowering costs. Most importantly, we believe
it will deliver growth and significant value for our stakeholders.”
Ford Model e and Ford Blue will work hand-in-glove with other parts of
the Ford enterprise. Ford Pro will continue to deliver industry-leading
products, services and support that commercial customers depend on.
Served by Ford Model e and Ford Blue, Lincoln will continue to create
compelling vehicles with an exceptional ownership experience to match.
Ford Drive will continue to develop new digitally connected mobility
businesses. And Ford Credit will continue to support the customer
experience and drive loyalty with a full suite of financial products and
services.
Leadership
With the creation of Ford Blue and Ford Model e, Ford is announcing
several leadership appointments. Farley will serve as president of Ford
Model e, in addition to his role as president and CEO of Ford Motor
Company.
Doug Field will lead Ford Model e’s product creation as chief EV and
digital systems officer. He will also lead the development of software
and embedded systems for all of Ford. Marin Gjaja will be Model e’s
chief customer officer, heading the division’s go-to-market, customer
experience and new business initiatives.
“Designing truly incredible electric and software-driven vehicles – with
experiences customers can’t even imagine yet – requires a clean-sheet
approach,” Field said. “We are creating an organization that benefits
from all of Ford’s know-how and capabilities, but that can move with
speed and unconstrained ambition to create revolutionary new products.”
Kumar Galhotra will serve as president of Ford Blue.
“Ford Blue’s mission is extremely ambitious,” Galhotra said. “We are
going to invest in our incredible F-Series franchise, unleash the full
potential of hits like Bronco and Maverick, and launch new vehicles like
global Ranger pickup, Ranger Raptor and Raptor R. We’ll pair these great
products with a simple, connected and convenient customer experience
that earns higher loyalty. We are going to be hyper-competitive on costs
and make quality a reason to choose Ford. And by doing all that, Ford
Blue will be an engine of cash and profitability for the whole company.”
Stuart Rowley and Hau Thai-Tang will take on new global roles to support
Ford’s transformation.
Rowley will be chief transformation and quality officer. He will
establish quality as a reason to choose a Ford and lead Ford’s drive to
improved efficiency, reduced complexity and a lean, fully competitive
cost structure across the enterprise.
Thai-Tang will lead Ford’s industrial platform as chief industrial
platform officer. He will lead product development, supply chain and
manufacturing engineering for ICE products and common systems across
Ford Blue, Ford Model e, Ford Pro and Ford Drive.
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