Ford Motor Co. in Dearborn is accelerating its transition to electric vehicles by creating separate divisions for EVs and traditional, gas-powered cars and trucks.
Ford Model e (EV division) and Ford Blue (traditional propulsion division) will be run as distinct businesses, but also support each other — as well as Ford Pro, according to Ford. Ford Model e and Ford Blue also will support Ford Drive mobility.
“This isn’t the first time Ford has reimagined the future and taken our own path,” says Bill Ford, the company’s executive chair. “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.”
While no date has been set for the transformation to take effect, Ford officials say it will happen “as soon as possible.”
“We have made tremendous progress in a short period of time,” says Jim Farley, president and CEO of Ford. “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. 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.”
The creation of Ford Model e, Ford says, 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,” says Farley, who also will be president of Ford Model e.
Doug Field will lead Ford Model e’s product creation as chief EV and digital systems officer. He also will 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,” says Field. “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.”
The goals of Ford Model e are:
- 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 strive to create 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 internal combustion engine (ICE) customers and deliver new levels of customer connectivity and satisfaction.
“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,” Farley explains. “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.”
Kumar Galhotra will serve as president of Ford Blue.
“Ford Blue’s mission is extremely ambitious,” Galhotra says. “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.”
The role of the Ford Blue division in this new alignment will be to:
- Strengthen the Ford vehicles, 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.
- 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.
As part of the reorganization, Stuart Rowley, president of Ford of Europe, and Hau Thai-Tang, chief product platform and operations officer, 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.
Along with announcing its new divisions, Ford reaffirmed 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 percent which, if achieved, would be one year earlier than the company’s previous target. With these changes, Ford is raising its longer-term operating and financial targets, including:
- Company adjusted EBIT margin of 10 percent 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.
- Ford says it 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 percent 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,” says John Lawler, chief financial officer at Ford. “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.”