Ford’s reorganization is one of the most sweeping taken by a traditional automaker in preparation for the transition to electric vehicles. Mr. Farley said the plan had come together after he and other top Ford executives noticed stark differences in the two business areas.
In making gas-powered vehicles, Ford must focus on reducing costs and generating the profits it needs to fund its E.V. plans. Over the next four years, Ford aims to trim costs for its internal-combustion models by $3 billion, with some cuts coming through job reductions, Mr. Farley said.
The electric business, in contrast, will have to spend heavily to develop software and technologies and to ramp up production quickly to achieve economies of scale. Ford aims to produce two million electric vehicles a year by 2026.
“For Ford to win against the new players and the other manufacturers, we have to focus more than we do today,” Mr. Farley said. “You can’t have people work on both at the same time.”
The E.V. group will be known as Ford Model e. Mr. Farley will serve as its president. Doug Field, a former Apple and Tesla executive hired by Ford in September, will lead its vehicle, software and digital systems development.
The internal-combustion business, known as Ford Blue, will be led by Kumar Galhotra, who was president of Ford’s North American operations.
Ford plans to begin breaking out the profits and losses of the two groups in 2023, and expects the electric business to become profitable within four years. Mr. Farley said the group would most likely have 2,000 to 5,000 employees. In addition to developing electric models, it will engineer new types of assembly lines to build them and manage Ford’s sourcing of key components like motors and inverters and raw materials such as lithium and rare earth metals.
Article source: https://www.nytimes.com/2022/03/02/business/economy/ford-model-e.html
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