In an update to investors, Ford said it is accelerating its development of smart, connected vehicles, including autonomous and electric vehicles and digital services, “to thrive in emerging transportation operating system.”
The investor presentation followed a four-month deep dive into Ford’s strategy and business operations led by President and CEO Jim Hackett and Ford’s senior leadership team.
“Ford was built on the belief that freedom of movement drives human progress,” said Hackett, who became Ford president and CEO on May 22. “It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing smart vehicles for a smart world that help people move more safely, confidently and freely.”
Reiterating its long-term goal of an 8 percent automotive operating margin, Ford said it “will embrace the profound technological changes and new competition buffeting the industry.”
“To deliver, the company is expanding its scope to include vehicles and services – all designed around human-centered experiences,” Ford said in a news release. “The company will tap its strengths integrating hardware and software in complex devices, its proven ability to deliver scale and the trust tied to the Ford brand.”
By 2019, 100 percent of Ford’s new U.S. vehicles will be built with connectivity, the automaker noted. The company has similarly aggressive plans for China and other markets, as 90 percent of Ford’s new global vehicles will feature connectivity by 2020.
Ford also plans to spend money where its bread is buttered – on SUVs and trucks.
The automaker said it is reallocating $7 billion of capital from cars to SUVs and trucks, including the Ranger and EcoSport in North America and the all-new Bronco globally. Ford also has plans to build the next-generation Focus for North America in China, saving capital investment and ongoing costs.
Focus on Electric Vehicles
As part of its strategic plan, Ford is reducing capital spending on internal-combustion engines by one-third and redeploying that money into electrification – on top of the previously announced $4.5 billion investment.
The company recently announced a dedicated electrification team within Ford, focused exclusively on creating an ecosystem of products and services for electric vehicles and the unique opportunities they provide. This builds on Ford’s earlier commitment to deliver 13 new electric vehicles in the next five years, including the F-150 Hybrid, Mustang Hybrid, Transit Custom plug-in hybrid, an autonomous vehicle hybrid, Ford Police Responder Hybrid Sedan and a fully electric small SUV.
“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally,” Hackett said. “Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”