Tuesday, 24 October, 2017

Ford's new strategy: focus shifts to SUVs, trucks and EVs

Report – Ford’s new “Team Edison” is all about electricity image How Ford Will Join the Electric-Car Revolution
Juana Turner | 05 October, 2017, 00:23

Ford Motor Company has created a team that will push development of electric vehicles (EVs) forward, and it's called Team Edison. Many experts agree that a wave of new regulations worldwide, including strong commitments from the Chinese government to roll out electric vehicles, are doing more to influence the direction of US automakers than consumer demand.

Acknowledging Ford had "fallen short on key targets", the new CEO promised to deliver profit margins of at least 8%, up from the current 6.1%, a figure he said "simply (is) not good enough".

"In the past few years, Ford simply hasn't had a compelling narrative that investors could latch onto", Barclay's analyst Brian Johnson wrote in a recent note to investors.

Other automakers have warned that shifting to all-electric vehicles could undercut profit margins.

Hackett and his team spent the summer reevaluating Ford's operations after former CEO Mark Fields was ousted.

Given this latest development, I think it's clear that Ford shareholders can expect Hackett to address both issues in his presentation on Tuesday. Nevertheless, since July 2014 Ford's share price is low by 30 %. Since Hackett became CEO, Ford has said it will move US production of the next-generation Focus to China and announced a partnership with Mahindra in India to bolster Ford's business there.

Ford plans to add Internet connectivity in every one of its vehicles in the U.S.by 2019.

Actually Ford stock has gone up just 1.7 percent this year, plodding rivals General Motors and Fiat Chrysler as well as the benchmark Standard & Poor's 500 Index.

"The cost cuts include $10 billion in "incremental" reductions in material costs and $4 billion in engineering cuts as the company shoots to cut vehicle development time by 20%", reports Nathan Bomey for USA Today. Ford Global Markets Chief Jim Farley said the company will be "looking very carefully at the actions we have to take" in South America and Europe, including potential partnerships in those regions.

"We see an inflection point in the major markets toward battery electric vehicles", Sherif Marakby, Ford's head of electrification and autonomous vehicles, told Martinez.

President of Global Operations, Joe Hinrichs said that the making of electric vehicles needs less monetary investment and 30 % decreased labor hours on each auto.

Hackett had few specifics on electric cars, however, beyond a statement that FOrd would launch 13 new "electric vehicles" around the world over the next five years.

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