When your market share has plummeted more than two percentage points since 2013, your product range is growing cobwebs, your dealers are screaming for new models and you’ve recently lost one of your top executives, what do you do?
Turn to a much-used page in the auto-industry playbook. It says: invite media and analysts to your headquarters for a high-level show-and-tell. Explain to them your strategy for getting your mojo workin’ again. New products delivered via faster development cycles. Cost reduction through reduced complexity.
Then you lift the curtain just a bit to tease the audience with your near-term product pipeline. Lights, camera, excitement!
I was among the herd of autowriters who made a mid-March pilgrimage to Dearborn to hear Ford CEO Jim Hackett and his team lay out their plan to get the Blue Oval back on track. This was the first time I’d heard Hackett speak in person since he joined the company last year from office-furniture-maker Steelcase. He came across to me as plain-speaking, straightforward and fully trusting of his chief lieutenants. They include three veteran engineers for whom I have great respect: Joe Hinrichs, who presides over Global Operations; Kumar Galhotra, taking over from the departed Raj Nair as head of North America operations and Hau Thai-Tang, leader of Product Development and Purchasing.
This triad—an EE and two MEs—brings a wallop of business experience, keen product know-how and, I believe, a canny sense of how to win. Their potential is as formidable as that of any top management team in the mobility sector. In close partnership with marketing wiz Jim Farley and an effective dealer body, Hackett’s team promises to:
- Raise product-development efficiency by more than 20%, and thus:
- Reduce engineering costs by $4B
- Drive scale and commonality using just five flexible vehicle architectures
- Reduce orderable combinations—80% of Ford sales currently come from about 15% of the order book!
- Deploy common electrical and propulsion architectures
- Revamp 75% of Ford’s models by 2020
- Raise Ford’s margins to more than 8%
A mighty task indeed, along with electrifying most of the product range by 2025. Hybrids in ‘Toyota-beating’ volumes will lead the charge, including an F-150 with integrated generator set, Farley promised. But the plan also includes six EVs by 2022, sharing a dedicated architecture. By 2020, increasing use of over-the-air (OTA) updates will enable engineers to decouple software from the longer hardware development cycles.
While Thai-Tang pulled the covers off a hall full of future models, media pledged to remain mum—for a time—on the details. I can reveal that most looked great. Say goodbye, almost, to passenger cars. Nearly 90% of Ford’s upcoming North American light-duty vehicles will be categorized as trucks—utilities and pickups of all sizes. And shades of 1966: Dearborn has Jeep is in its crosshairs again, with the reborn Bronco SUV and an all-new rock-crawler aimed directly at Wrangler.
Continuing to join with tech start-ups will be key to furthering the connected-car and shared-/autonomous-mobility agenda. The data “cloud” soon will be as ubiquitous in Ford products as Black paint was a century ago.
The leadership team has ambitious goals for remaking Henry’s enterprise. And no time to lose.Continue reading »