Ford to cut engine funding by one third, invest in electrics, autonomy

Jon Howard
October 5, 2017

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Jim Hackett, CEO of Ford Motor Company, said on October 3, the company would boost development funds for new electric vehicles (EV).

Marakby said Team Edison "will look holistically at the electric vehicle market".

"I get up every day feeling like time can be wasted here if we don't get moving", Hackett told investors Tuesday at a briefing in NY. Mr. Hackett spent four months studying aspects of Ford's business to devise the plan. Hackett traveled to Russian Federation and Turkey and visited North American plants and Ford's Silicon Valley research center as part of his review. He added that Ford subsidiary Argo AI is working on production ready autonomous platform, and that Ford won't release a beta version before development is complete. One of his first moves was to pare down the number of people reporting to him. This will entail pulling $10 billion out of materials costs and another $4 billion out of product engineering costs. Ford is reducing that to 96.

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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 plans to introduce 13 new electric vehicles around the world over the next five years, including an F-150 hybrid, Mustang hybrid, a hybrid autonomous vehicle, hybrid police sedan and a fully electric small SUV.

During his two hours presentation, Hackett said that Ford would welcome business partnerships for distributing the risks and expenses of experimenting with new technologies and services while at the same time making revenues from the selling of trucks and sports cars in North America. Global demand for those vehicles is rising, and they are critical to Ford's bottom line.

While Hackett made it clear Ford intends to accelerate those new lines of business, he stressed that it plans to remain "in the auto business, moving goods and people around".

The automaker plans to cut some cars from its lineup, but didn't name them Tuesday. "In the interim, Ford is fixated on improving efficiency and 'fitness.' It's early in the turnaround but we believe Ford is on a focused and improved track". "It will be separate from Ford's other electrification efforts, which include hybrid and plug-in hybrid offerings", as Michael Martinez reported Monday for Automotive News. Ford recently announced a partnership with Lyft to deploy self-driving cars, and it's collaborating with Domino's Pizza to research how customers feel about robocar pizza deliveries.

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