Ford is redefining its future aims and reorganising its top brass in the wake of the departure of Mark Fields, who has been replaced as CEO by Jim Hackett.
11 Jun 2017 | 5429 Views | By Julian Rendell, Autocar UK
Ford is overhauling its management and product planning to accelerate the arrival of new models – such as a Nissan Qashqai rival rival – and self-driving technology after the surprise departure of CEO Mark Fields.
Jim Hackett, Fields’ replacement, joined the Ford management board four years ago. He is ...
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Ford is overhauling its management and product planning to accelerate the arrival of new models – such as a Nissan Qashqai rival rival – and self-driving technology after the surprise departure of CEO Mark Fields.
Jim Hackett, Fields’ replacement, joined the Ford management board four years ago. He is said to be refocusing the top management ‘Business Plan Review’ (BPR) meeting towards future product and strategy rather than weekly problem solving.
Together with a senior management overhaul and a clearer focus on communicating technology developments, Hackett will try to arrest Ford’s 40% share price decline, which prompted the end of Fields’ three-year reign as CEO, despite Ford forecasting profits this year of $9 billion (£6.95bn).
“You have to look at the share price as the main driving force in this decision,” a source told Autocar. Fields is also said to have, in the eyes of the board, lost focus on the current business while attempting to turn Ford into a ‘mobility services’ company.
Rejig at the top
The Hackett-led shakeup will put Ford of Europe president Jim Farley in charge of all selling activities as the new head of global markets. The president of Ford’s operations in the Americas, Joe Hinrichs, will take control of product development and manufacturing. Raj Nair will move from chief engineer to become president of Ford North America and Hau ThaiTang, who was chief engineer on the 2005 Mustang, will lead global product development and purchasing. Ford of Europe COO Steven Armstrong will take over Farley’s former position.
Hackett’s move to overhaul its top management BPR meeting will change the focus of one of the major advances in the Fields/Alan Mulally era, which has been credited with pulling Ford’s departmental silos into a common direction.
Significantly, it will free Ford’s top managers to concentrate on introducing self-driving technology, electrification and new revenue streams from mobility services alongside new model launches.
Day-to-day operations, it is understood, will be handled by a secondary organisational set-up.
There are no plans for Ford to follow General Motors and sell off its European arm because the division is now a valuable asset. After years in the doldrums, it has been making profits since 2015. It also engineers powertrains, platforms and models that are sold globally. “Selling Ford of Europe is not going to happen,” a source told Autocar.
Ford’s product planning process will be freed to better identify global trends, like the emergence of the B-segment SUV and C-segment crossover.
Under Fields and his predecessor, Mulally, Ford’s product planning was organised under the ‘One Ford’ banner to deliver individual models engineered to multiple global standards.
Hackett said: “What One Ford doesn’t do as well is deal with a lot of complex strategies, with many elements.”
Mainstream models such as the Fiesta and Focus thrived under the One Ford regime. Both are brilliant to drive and the Fiesta is consistently the UK’s best-seller and recently outsold the Volkswagen Golf as Europe’s number one. One Ford has also delivered compelling performance models such as the Focus RS, Mustang and GT.
But to make production, models had to be viable in all key markets — North America, Europe and Asia Pacific. As a result, development of spin-off models like B-segment SUVs has been patchy.
One view is that the complexity of global planning for One Ford models hampered decision making and encouraged ‘one size fits all’ vehicles.
EcoSport production to be moved from India to Romania
Product planning on a global basis has certainly led to some below-par models such as the EcoSport SUV engineered in Brazil, built in India and not up to European standards. The latest EcoSport is doing better and European sales were up 42% to 9200 in the first quarter of 2017, according to market analysts JATO. But rivals from Peugeot, Renault and Vauxhall-Opel each outsell it by up to three to one.
To better match European expectations, production of the Ecosport will be moved from India to Romania later this year. The car will get a new interior and under-skin improvements.
But the Ecosport has already been re-engineered three times in its five-year lifespan. And with hindsight, the costs associated with that would have better been allocated to a higher-quality initial design.
There is another element to moving EcoSport production. Adding its volume bails out the Craiova plant, whose B-Max compact MPV is selling in a shrinking market. It built only 40k units last year, despite being planned at over 100k.
Ford is also moving to add a new European-themed crossover, codenamed C430, which can finally provide it with rival to the market-leading Qashqai. But it won’t arrive until 2019 — 13 years after the Nissan soft-roader’s debut.
Hackett might reflect that, given the choice again, Ford might not have spent scarce resources on re-engineering the Fusion for Europe, where it sells in a shrinking segment.
Hackett didn’t provide any detail on his plan to transition Ford to electrified powertrains, although finance director Bob Shanks confirmed that $4.5bn (£3.47bn) continues to be earmarked for new EVs and $1bn (£770m) for autonomous vehicles, with a target of a Level 4 self-driving car by 2021.
Ford’s main thrust on EVs is a 13-model line-up, including an SUV in 2020, possibly badged Model E, with a 300-mile range.
Rivals are being readied for a similar launch date, so Ford’s product planning is looking on schedule in this cutting-edge technology.