Remember just a few days ago when Ford CEO Jim Farley said they had “no plans to spin off our electric business or our ICE business,” during a finance call with investors?
Yeah. Forget all that. The company announced this morning they are creating distinct electric vehicle and internal combustion businesses, one which is poised to “compete and win” against both new EV competitors and established automakers.
I’m sure Farley’s previous statement matches the letter of how his company has been cleaved, if not the spirit, since this move could be construed as a reorganization and not a spin-off. Nevertheless, it shows how seriously the company is taking its opportunities in the EV game and its willingness to shake things up in a big way to advance its goals.
Ford Blue will be responsible for building out the company’s portfolio of ICE vehicles, driving growth and profitability in those sectors. Ford Model e will accelerate innovation and delivery of electric vehicles at scale, while also developing software and connected vehicle tech for all of Ford.
“We’re literally splitting the business in half,” Farley told Automotive News.
But wait – there’s more. Remember Ford Pro? That’s its existing commercial arm which is not tasked with the actual development of vehicles but distributes and sells them while offering hardware and software products for commercial customers. This means there are now three slices to the Ford pie operating under Dearborn’s umbrella.
And, in a key tidbit for members of the B&B who like dealer news, AN reports that Dearborn also said it is planning big changes for its dealership body. Glass House planners apparently want an unspecified number of retailers to opt-in to selling EVs under a new set of standards. These new rules could include carrying no inventory, selling at nonnegotiable prices, and being held to fewer facility requirements.
There is a shuffle of chairs amongst leadership as well. Farley will serve as president of Ford Model e, in addition to his role as president and CEO of Ford itself. Kumar Galhotra will serve as president of Ford Blue while the head of Ford Pro is Ted Cannis. Doug Field will lead Ford Model e’s product creation as chief EV and digital systems officer while also leading the development of software and embedded systems for all of the company. Them’s some long titles, surely leading to what will be the world’s longest business cards.
Another impetus for all this? Corner offices in Detroit and beyond surely eye Tesla stock with much envy; whether one thinks the House of Elon is overvalued doesn’t dampen the fact its market value is many multiple of legacy automakers. With today’s news, $F shares rose about 5 percent in before-bell trading after this morning’s announcement.
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