Why Ford is splitting its business in two
Friday 4th March, 2022 - 9:18am
Ford has announced a major overhaul of the way it does business, effectively splitting its core business into two halves – Ford Blue and Ford Model e.
Ford Blue will focus on the brand’s internal combustion powered models like Mustang and Ranger while Model e will be responsible for electric and connected vehicles such as the Mustang Mach-E and F-150 Lightning.
Ford president and CEO, Jim Farley, announced the new structure this week, explaining that while the two divisions will operate as separate businesses – each with their own management – they will also be able to support each other.
The hope is that by giving Model e more freedom, it will allow Ford to act more like a fast-paced start-up company – similar to Tesla and Rivian – while still being able to draw on Ford’s century of experience mass-producing cars.
“Ford Model e will be Ford’s centre 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,” Farley explained.
“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, maximising cash flow and optimising our industrial footprint.”
Ford had already committed to spending US$5 billion on EVs in 2022 as it pushes further into the electric market. It’s previously stated goal was to have 50 per cent of its sales be EVs by the end of the decade.
Which means the other half will be petrol- or diesel-powered models that are the lifeblood of the brand. Famous nameplates like the Mustang, Ranger, Bronco and F-150 will continue to be a priority under the Ford Blue banner.
Kumar Galhotra has been named president of Ford Blue and made it clear that the role of his side of the business is to build the brand’s most popular and profitable models.
“Ford Blue’s mission is extremely ambitious,” Galhotra explained. “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.”
These changes are expected to have a limited impact on Ford Australia, at least in the short-term, with the company set to launch the all-important new Ranger and Everest later in 2022, with its first EV, the e-Transit, arriving in 2023.