Ford Chief Outlines Investment Shift Away From Passenger Cars

Ford Chief Outlines Investment Shift Away From Passenger Cars


Putting more emphasis on introducing new trucks and S.U.V.s while also managing the transition to vehicles that lack an internal-combustion engine, or even a driver, will require a dual focus.

Michelle Krebs, an analyst at Autotrader.com, said Ford might find the transition difficult. “Straddling the now and the future will be tricky especially in terms of profitability,” she said.

At an appearance in New York that was also webcast, Mr. Hackett acknowledged that the company faced significant challenges. “The decision to change is not easy — culturally or operationally,” he said, adding that the approaches that have brought success in the past “are really no guarantee of future success” as the industry is reshaped.

An immediate area of emphasis will be connected vehicles, which collect data about their operations and surroundings that can be used to improve safety and provide new digital services. “Our vehicles will be smart and connected,” Mr. Hackett said.

By 2019, all new Ford models in the United States will be able to transmit data back to the company or its business partners, a step toward creating mobility services like ride-hailing and traffic avoidance. The company is planning a similar rollout in China. By 2020, 90 percent of all new models, regardless of market, will offer such connectivity.

As part of that push, Ford is developing software that will enable vehicles to communicate with one another and with sensors along roadways and in traffic lights.

Ford’s initiatives come as the industry’s incumbents are scrambling to match outsiders like Tesla, Google and Uber, who are making big advances in automotive technology. On Monday, General Motors presented a plan to introduce 20 all-electric models by 2023, including two in the next 18 months.

In addition to revisiting its development priorities, Mr. Hackett vowed that Ford would become more efficient, cutting billions in material costs and engineering expenses over the next five years. Ford has average profit margins of about 6 percent in recent years, short of its goal of 8 percent. “That’s not good enough,” Mr. Hackett said.

Mr. Hackett, a former chief executive of the office furniture manufacturer Steelcase, joined Ford’s board in 2013 and its executive ranks last year. His predecessor as chief, Mark Fields, had come under pressure because of a decline in profits and a sagging stock price.

While Mr. Fields was a polished salesman and marketer, the company struggled to plot a course as the industry was reshaped by electric vehicles, autonomous technology and ride-hailing services like Uber and Lyft.

It was a reversal of fortune for Ford, which had been the only one of the three Detroit automakers to escape bankruptcy as the recession and financial crisis set in.

When he arrived, Mr. Hackett promised to review all of Ford’s businesses and operations, and prepare a plan within about 100 days for improving its “fitness” and strategic direction. Since then, he has said little in public.

In June, Mr. Hackett announced that Ford would import a new version of its Focus small car from China. Ford had planned to build a $1.5 billion plant in Mexico but canceled it in January after it met stiff opposition from Donald J. Trump, then the president-elect.

In the four and a half months since Mr. Hackett’s ascent, Ford has elevated its share price by 14 percent, including 2 percent in Tuesday’s trading session. But in the same period, G.M.’s shares have risen 33 percent, and Fiat Chrysler’s are up 71 percent.

Ford reported net income of $2.04 billion in the quarter that ended June 30, an increase of almost 4 percent from the same period a year ago. But the rise came mainly because of a big profit in its credit arm and a cut in its tax bill. Its auto operations in North America suffered a 19 percent drop in operating profit in the quarter.



Source link

(Visited 8 times, 1 visits today)

About The Author

Momizat Team specialize in designing WordPress themes ... Momizat Team specialize in designing WordPress themes

Related posts

Leave a Reply