Brought in just a few months ago upon Mark Field’s firing, Jim Hackett showcased the vision of Ford’s future today before shareholders.
After taking the position as CEO, the former Steelcase CEO and Michigan Wolverine AD, embarked on a six month review of the company and to formulate a plan for the path forward.
This was a response of the company losing focus in recent years under Fields, which also saw Ford’s shares on Wall Street fall dramatically. Most blamed Ford’s lack of vision on electric and autonomous vehicles.
So let us jump right in…
The company will exercise company “fitness” to focus on the company’s future in the “now”, “near”, and “far” at every step. In doing so, they plan on restructuring business operations and reset revenue and costs.
To reduce costs, they plan on making the company leaner in capital spending, change the industrial model of production, and launch spending reduction incentives. This will also include a reduction on variations per model. For instance, the Ford Escape will drop from 2,302 variations to just 228.
To save money and be able to react to market forces faster, Ford plans to drop the length of vehicle development time by 20% and reduce model changeover time by 25%. Virtual reality, showcased last week, to design new cars will be one method to speed this processes up.
Ford also plans on reducing the footprints of plants, likely through more automation, and connect the customer closer to the production process.
To respond to the need of electric or electrified vehicles in the future, Ford is going to cut investment by around 1/3 into ICE development and push those funds into the aforementioned. Ford anticipates ICE powered vehicles will only make up 1/3 of global sales by 2030.
In addition to yesterday’s announcement on Team Edison, a team within Ford to design and manage BEV development, Ford confirmed that it will expand its BEV lineup beyond 2020 to more than just the previously announced 300 mile range crossover. Ford promises to deliver its electric vehicles at a profit, something it likely does not now.
In North America, all vehicles sold by 2019 will be internet equipped with 90 percent globally. This will allow cars to communicate with other cars and on-street equipment in the future.
To pounce further on the crossover, SUV, and truck market, Ford will shift $7 Billion in investments from car development into those three segments as demand continues to grow.
Its worth noting, the Ford Bronco, originally slated to arrive in 2019, is now slated for 2018.
Though Ford profits have been stellar in recent years, Ford and Wall Street are hoping for better returns and company stability in the future. That is what Hackett was brought in for and it is what he has done at other organizations. Ford is hoping for the same in his office at the Glass House.