Ford will divide itself in two

Ford has announced a new corporate structure, under what it calls the Ford+ plan. It will essentially divide itself in two (although there's no suggestion here that either half will be sold off or spun-off) called Ford Model e Division and Ford Blue Division.

Model e Division

Model e Division will, unsurprisingly, focus on making electric cars, while the Blue Division will be Ford's internal combustion half. So far, this is strictly an American re-organisation, and there's no word as yet on whether or not - or how - these changes will affect Ford's European operations.

The two halves of the company won't be completely separate, but will lend each other expertise as needed. Ford says that Model e Division will "accelerate innovation and delivery of breakthrough electric vehicles at scale, and develop software and connected vehicle technologies and services for all of Ford." Meanwhile, Blue Division will "build our company's iconic portfolio of ICE 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."

The 'relentlessly attacking costs' part of Blue Division's credo is possibly a nod towards Ford eventually winding down its internal combustion operations. The company has already promised to launch only fully-electric vehicles in Europe by 2026.

The plan is for the Ford+ plan to increase the company's profit margins to ten per cent of sales by 2030, and for Ford to sell an annual two-million EVs by 2026, with electric car manufacturing making up a majority of Ford's production by 2030.

Extraordinary opportunity

"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."

"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," Ford President and CEO Jim 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."

Part of the change of attitude within Ford will be the setting up of small, theoretically agile, teams to develop new cars. Ford has previously used this philosophy for cars such as the GT supercar, the Mustang Mach-E EV, and the F-150 Lightning electric pickup. How that will translate across the entirety of Ford's vehicle design and engineering programmes remains to be seen.

"Ford Model e will be Ford's centre 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, maximising cash flow and optimising our industrial footprint." Farley himself will lead Model e, along with his current duties as the company's chief executive. Kumar Galhotra will serve as president of Ford Blue.

Stuart Rowley, until recently the head of Ford Europe, will now have a global role to boost Ford's quality ratings, and to "establish quality as a reason to choose a Ford."

Subscriptions for optional extras

It's also clear that, as with many other car makers, Ford is setting itself up as a company that sells you electronic products and services, many of them accessible via the touchscreens in its cars. Those services might vary from parking and paying for fuel, all the way up to unlocking optional extras within your car - the dreaded 'eternal subscription' model of vehicle options. "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 personalised 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" said Ford in a statement.

Part of the Ford+ plan is that the company also wants to achieve carbon neutrality by 2050, and as a major part of that Ford is committing to using only 100 per cent renewable electricity at all of its manufacturing operations by 2035. The company will also double its EV development budget - to USD$5 billion - this year.

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Published on March 2, 2022