Ford CEO Jim Farley kept his word when he said that the Dearborn, Michigan-based global automaker wasn’t intending on spinning off its promising electric vehicle business. Instead, Ford Motor Company has announced the creation of two new divisions within itself. The first is Ford Model e, which will focus on the creation of future electric vehicles. The second is Ford Blue, which will focus its efforts on established nameplates and icons such as the Ford Mustang, Ford Bronco, F-Series, and Ford Ranger.
As MC&T reported before, Farley and company recognize that the EV and ICE businesses are distinctively different in virtually every respect. From R&D, to supplier sourcing, to commodity sourcing, to product cadence, to pricing strategy, to the dealers, to the customer.
“I’m struck throughout my career, I’m struck at how different the rhythm of this digital BEV businesses versus ICE,” Farley said during Ford’s Q4 2021 Earnings Call. He further said that “we think the go-to-market is going to have to be different. The product development process and the kinds of products we develop are different. The procurement supply chain are all different. The talent is different. The level of in-sourcing is different. And actually, the rhythm of the business is different, fundamentally different.”
That was the layup for today’s major announcement. Which also came out during the company’s February 2022 sales report, which saw numbers fall sharply year over year.
Ford Blue And Ford Model e: Two Divisions, One Company
So, what does this mean for the likes of the Ford Mustang, the Ford Bronco, Maverick, Ranger, and/or the Ford F-150? It means no knee-jerking into an electric false equivalent, and a recognition of both the brand cachet and profit margins these Icon vehicles bring in to fund whatever it is Ford wants to do in the future.
“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,” said Farley in today’s announcement.
What does it mean for the Ford Mustang Mach-E, F-150 Lightning and future electric vehicles? It means a sharpened focus on bringing desirable electric vehicles to market, taken from the learnings of the Mach-E and Lightning development up to this point, as well as the halo Ford GT supercar program. It means more specialization in software, electric vehicle batteries and motors, charging, recycling and more. And it means a lot of new jobs for software, engineering, design and UX talent.
Ford Motor Company says that the Ford Model e and Ford Blue will be run as “distinct businesses,” but also support each other. To make that happen, several company executives will assume new roles:
- Ford CEO Jim Farley will maintain his leadership position, while also assuming the role as president of Ford Model e.
- 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.
- Kumar Galhotra will serve as president of Ford Blue.
- Stuart 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.
- Hau 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.
The divisions will serve as corporate pillars that join the already established 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 Drive – the company’s mobility division – will also see support from both Ford Model e and Ford Blue.
3 CommentsLeave a Reply
If there is an average CO2 quota any OEM has to match, then separating the whole electric business wouldn’t make sense if ICE cars are still going to be produced.
Quotas aren’t what this is about, though.
It will be easier to flog off the ancient ICE division later