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Jarstang

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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
  • 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
  • ·Ford Blue will build out 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
  • 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
  • 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
  • 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






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; and
  • 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.

Biographies:



Ford News ConferenceWednesday, March 2, at 8 a.m. EST

Journalists and members of the investment community interested in asking questions should additionally dial in by phone.

Toll-Free: +1.877.930.5753

International: +1.409.983.9656

Pre-registration (not required, but will expedite login)

Conference ID: 9288331

Listen-only livestream and replay

The presentation and supporting material will be available at shareholder.ford.com.



Ford Capital Markets CallWednesday, March 2, at 9:15 a.m. EST

Journalists and members of the investment community interested in asking questions should additionally dial in by phone.

Toll-Free: +1.888.558.1223

International: +1.845.403.8280

Pre-registration (not required, but will expedite login)

Conference ID: 8872114

Listen-only webcast and replay

The presentation and supporting material will be available at shareholder.ford.com.

 

IceGamer

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such a long list of marketing bla bla... :D

No Mustang news included except that we'll get a hybrid Mustang by 2035 :giggle:
 

Ruin

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  • 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;
Do we begin speculation of what exactly this means? 😆 Perks for “loyal” buyers or something else? Adding more or expanding existing to grams like the Ford Performance Driving Experience?

I’m intrigued by the idea of Mustang becoming a bit of a boutique brand for Ford. Might help elevate the quality a bit too which would be awesome.
 

because_murica

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I’m intrigued by the idea of Mustang becoming a bit of a boutique brand for Ford. Might help elevate the quality a bit too which would be awesome.
Maybe, or maybe it's all just marketing to grab headlines. Maybe this is all a simulation. No one knows, Ruin, no one knows.

Whatever this means, I genuinely hope it applies heavily to the last ICE Mustang.

Bonus queen: what of this means they'll be producing pure ICE Mustangs beyond 2030/2035 since it's obviously important to their "Blue" customers?
 

Ace

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You have to love these corpospeak press releases that bascially says nothing important. From my own experience I would pretty much bet on that the decision behind this has to do something with taxes, funding, not being bound on previous contracts or unions, things like that.
 


zackmd1

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You have to love these corpospeak press releases that bascially says nothing important. From my own experience I would pretty much bet on that the decision behind this has to do something with taxes, funding, not being bound on previous contracts or unions, things like that.
It is a way to have slightly lower profit margins on the EV side without angering Ford shareholders since the EV side is a separate business now.

Basically allows them to hide all of the costs associated with transitioning the larger business to EVs (plant upgrades, new material contracts, etc…) without having to report a dip in profits in the main business. Once the EV side is has completed it’s objectives it will get re-absorbed into the main business most likely.
 

Stonehauler

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maybe, maybe not. This could also be a method to move away from ICE 10 years from now and just shutter a division like they did with Mercury. It doesn't look like they are doing a company split, just a new division within Ford, this does open up a way for them to permanently separate the legacy ICE business later on. They could then declare bankruptcy with that new company and get rid of a lot of liabilities. This would enable them to keep their most modern, most efficient plants while getting rid of outdated and most costly to update plants and foundries

I would be curious as to how this will impact their car dealerships as well. Will they have to buy new franchises from Ford to sell both the Blue and Model e brands? How will cars be marketed? Will they all be Fords, or will they be Model E and either Ford Blue or Blue? How will this split effect the Lincoln brand?
 
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zackmd1

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maybe, maybe not. This could also be a method to move away from ICE 10 years from now and just shutter a division like they did with Mercury. It doesn't look like they are doing a company split, just a new division within Ford, this does open up a way for them to permanently separate the legacy ICE business later on. They could then declare bankruptcy with that new company and get rid of a lot of liabilities. This would enable them to keep their most modern, most efficient plants while getting rid of outdated and most costly to update plants.

I would be curious as to how this will impact their car dealerships as well. Will they have to buy new franchises from Ford to sell both the Blue and Model e brands? How will cars be marketed? Will they all be Fords, or will they be Model E and either Ford Blue or Blue? How will this split effect the Lincoln brand?
It might allow Ford to do a direct to customer model like Tesla and other startup EV companies.
 

Stonehauler

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It might allow Ford to do a direct to customer model like Tesla and other startup EV companies.
that would certainly change the car business. Not sure if it would be better or not. It would also depend on how certain states saw it vs their laws...
 

Shelbeast

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such a long list of marketing bla bla... :D

No Mustang news included except that we'll get a hybrid Mustang by 2035 :giggle:
That's all the news we need to hear. V8's forever!
 

Shelbeast

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Why is the dealership getting a cut with no cars on the lot. Sounds like they just want a car to sale and make 10K. F that.
We need a better way to sell our cars for the profit. Dealers make 100K plus off the resell life of one car.

This has not made sense and i'm sure many people (not niche market) don't like the idea either. The market made lots of money getting people to buy at the dealership after test drive.
 

because_murica

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Interesting look at this.
That would be the best thing to happen since sliced bread. I've dealt with too many incompetent and/or shady Ford dealers in my time, and I'm sure others have as well. Hopefully, Ford is finally realizing that their shitty dealers are driving people away and destroying the brand.
 

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With websites like carwow that seaches for best prices in your area and you can order the car in a few clicks, why even bother with dealers? Giving you shitty prices, trying to sell you packages you don't want, acting like they have to ask the head of the dealership if they can give incentives. And once you buy you never hear a word again, who cares where you ordered car is or when it will arrive... Dealers bullshit their customers so much. I totally have no problem with tons of dealerships going down in the future if I look at how they treat their customers.

Just an example, I set myself on the interest list for the C8 on announcement of the car on 5+ Chevrolet dealership in Germany. Imagine how many of them actually called me or wrote an email once there were new details? None. Often it feels like you are disturbing the dealer with buying the car...
 

llinthicum1

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I'm curious, now that Ford-e has been announced, what will be the next all electric vehicle Ford will come out with after the Mach-e, Lightning, and e-Transit?
 

 
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