Michigan, March 2 (BUS): Ford Motor Co. announced Wednesday a reorganization under which its electric vehicle (EV) and internal combustion engine (ICE) units will operate as separate companies in a move to track rapid growth in electric vehicles. Three people familiar with the plan said.
EV and ICE will have separate names but will remain under the Ford umbrella, in the same way the company runs its Ford Pro business for corporate customers, said the people, who requested anonymity.
The US automaker will appoint CEOs to lead each business, and Ford will also set updated profit margin targets for the company overall, the sources said. One source said the idea is for Ford to eventually provide separate financial results for its electric car business and ICE.
Ford spokesman TR Reed declined to comment on the report. “We are focused on implementing our Ford+ plan to transform the company and thrive in this new era of electric and connected vehicles,” he said.
In response to reports Ford was considering an entire electric car business, CEO Jim Farley said last week that the company had no plans to separate the EV or ICE business, according to Reuters.
“We know our competitors are Nio and Tesla, and we have to beat them, not match them,” he said last Wednesday at the Wolfe Research conference. “And we also have to beat the best ICE players.”
However, by separating the electric vehicle business into a separate unit, Ford will have set the table for a potential triage down the road, industry officials said.
A growing preference among investment managers for companies focused on low-carbon technology has helped Tesla Inc become the world’s most valuable automaker, and has led some investors and analysts to urge other automakers to consider decoupling the combustion engine from the electric business as a way to better leverage their values. full.
Companies such as General Motors have resisted those calls, arguing that ICE’s profits will fund the transition to electric vehicles.
Ford’s expected move mimics one identified by French carmaker Renault earlier this month, which said it was looking to set up separate divisions for its electric and snowmobile business. She said the electric car business could focus on France, while ICE’s operations could focus outside France.
Farley also said last week that Ford’s EV and ICE business were underperforming on an earnings basis, adding that costs could still be cut from the ICE business.
“We have too many people, we have too much investment, we have too much complexity and no experience moving our assets,” he said of ICE’s business. “That’s the simple answer. There is wastage.”
He also said Ford needs to add more people to improve profit margins for the electric vehicle business, including in areas such as electrical components, advanced electrical architectures and digital customer experience.
Among the business candidates is Doug Field, Ford’s chief advanced technology officer, who was hired from Apple Inc. Hau Thai-Tang, Head of Product Platform and Operations Officer; Lisa Drake, Chief Operations Officer, North America; and Kumar Galhotra, president of the Americas and International Markets, industry officials said.
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