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As Farley's tenure begins, Ford focuses on growth, improved execution, faster transformations


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This is actually a fairly feature-rich piece to push out on day 1 of the new FY-

 

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  • Jim Farley outlines key goals and organizational changes today as he becomes 11th CEO in company’s 117-year history
  • Plan is to turn around automotive operations; allocate capital to Ford’s strongest franchises and high-growth opportunities; produce compelling, uniquely Ford electric vehicles at scale; and stand up new AV-enabled businesses
  • Objectives include top-line growth, operational excellence, high quality and customer satisfaction, sustained adjusted EBIT margins of 8%, strong automotive adjusted free cash flow
  • New organization drives more decision-making and accountability into regional business units, supported by world-class industrial and technology/software platforms
  • John Lawler named CFO; company plans to add new CIO, CMO to leadership team

DEARBORN, Mich., Oct. 1, 2020 – Ford is continuing to streamline and transform its global business, making changes in how the company is organized and operates to deliver executional excellence that benefits customers and delivers sustained profitable growth.

Jim Farley, who today succeeds Jim Hackett as Ford’s president and CEO, outlined key goals and organizational changes during a virtual town hall meeting with the company’s global team. Farley said Ford plans to move with urgency to turn around its automotive operations – improving quality, reducing costs and accelerating the restructuring of underperforming businesses.

At the same time, Ford will grow by:

  • Allocating more capital, resources and talent to its strongest businesses and vehicle franchises
  • Expanding its leading commercial vehicle business with a suite of software services that drive loyalty and recurring revenue streams
  • Offering compelling, uniquely Ford fully electric vehicles at scale around the world, including Transit, F-Series, Mustang, SUVs and Lincoln
  • Adding more affordable vehicles to its global lineup, including in North America
  • Standing up new customer-facing businesses enabled by Argo AI’s world-class self-driving system

“During the past three years, under Jim Hackett’s leadership, we have made meaningful progress and opened the door to becoming a vibrant, profitably growing company,” Farley said. “Now it’s time to charge through that door.”

“We are going to compete like a challenger – allocate capital to higher growth and return opportunities to create value – and earn customers for life through great products and a rewarding ownership experience.”

Ford is making changes to its operating model to help deliver on these priorities, including:

  • Concentrating decision-making and accountability around product and customer groups in three regional business units – The Americas and International Markets; Europe; and China
  • Accelerating innovation to be a leader in new businesses such as autonomous vehicles and mobility
  • Harnessing expertise in industrial platforms to develop world-class connected vehicles
  • Unleashing technology and software in ways that set Ford apart from competitors
  • Embracing and increasing the diversity of backgrounds, experiences and talent across the company

Farley said the company is targeting consistent operating performance that includes adjusted earnings before interest and taxes of 8% of revenue with strong automotive adjusted free cash flow, so the company can fully invest in customers and growth.

Ford today also announced key leadership changes.

John Lawler, 54, will become CFO today, overseeing the Finance and Ford Motor Credit organizations. Lawler will succeed Tim Stone, who has accepted a position as chief operating officer and chief financial officer at ASAPP Inc., a research-driven, artificial-intelligence software company.  Stone will remain with Ford through Oct. 15 to ensure a smooth transition.

Lawler has most recently been serving as CEO of Ford Autonomous Vehicles and vice president, Mobility Partnerships, and spent much of his 30 years at Ford in finance leadership and general management. He served as president of Ford China for nearly four years when the company achieved record in-country performance. He also served as corporate controller and CFO, Global Markets and head of worldwide strategy.

“John knows our company inside-out, has a clear view and great ambition for what Ford can be, and articulates what’s needed to get there,” Farley said. “As CFO, he will help assure we have the means to fund those ambitions.”

Lawler’s successor in his current position, who will oversee the New Businesses group going forward, will be named later.

“Tim has been a powerful voice inside the company pushing us all to persistently focus on our customers and what they want and need,” Farley said. “He also played a critical leadership role in guiding the company through the COVID-19 crisis. We thank Tim for his contributions and wish him the best.”

Jeff Lemmer, Ford’s chief information officer, will retire Jan. 1 after 33 years with the company. A successor for Lemmer as CIO, who will lead the Technology and Software platform, will be announced in the near future.

“Jeff has been an outstanding leader at Ford and that was never truer than this year, when he and the IT team kept our company fully connected and operational during the pandemic,” Farley said. “Ford shifted more than 100,000 people around the world to remote work virtually overnight because of COVID-19, and our information systems haven’t missed a beat.”

Ford will strengthen its commitment to two key areas by having separate senior leaders run the Lincoln Motor Company and Global Marketing.

Joy Falotico, 53, who has been president of Lincoln and Ford’s chief marketing officer for nearly three years, will be dedicated solely to further growing Ford’s luxury brand once a new chief marketing officer is named shortly. She will report to Kumar Galhotra, president, The Americas and International Markets.

“This change will allow Joy to focus on accelerating Lincoln’s global growth through great vehicles and services and a truly differentiated customer experience,” Galhotra said. “Lincoln’s completely refreshed lineup is resonating with customers in the U.S. as well as in China, where we are now producing the Lincoln Aviator and Corsair locally, for Chinese customers – and that’s just the beginning.”

Separately, in Europe, Dale Wishnousky, 57, vice president, Manufacturing, Ford of Europe, will retire at the end of the year. His career with the company started in 1987 and spanned key manufacturing and service leadership roles in multiple countries. Kieran Cahill, 53, previously director, Manufacturing and Strategic Projects, Ford of Europe, succeeds Wishnousky, effective immediately.

 

 

 

 

https://media.ford.com/content/fordmedia/fna/us/en/news/2020/10/01/ford-announces-operational-and-leadership-changes.html

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Watch this space:

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    • Allocating more capital, resources and talent to its strongest businesses and vehicle franchises
    • Expanding its leading commercial vehicle business with a suite of software services that drive loyalty and recurring revenue streams
    • Offering compelling, uniquely Ford fully electric vehicles at scale around the world, including Transit, F-Series, Mustang, SUVs and Lincoln
    • Adding more affordable vehicles to its global lineup, including in North America

     

     

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Sounds ambitious and won't miss Hackett at all, nor will WS.   Let's see how they execute, since Ford doesn't have the luxury of time on its side. The next 5-20 years (at most) of the auto industry is going to be revolutionary in more ways than the past 100 and will be interesting who survives the onslaught of the Chinese, move to battery powered vehicles and other obstacles. 

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1 minute ago, kyle said:

Let's see how they execute, since Ford doesn't have the luxury of time on its side. The next 5-20 years (at most) of the auto industry is going to be revolutionary in more ways than the past 100 and will be interesting who survives the onslaught of the Chinese, move to battery powered vehicles and other obstacles. 

 

Good post kyle sir. For Ford, successfully finishing the fitness initiatives that Jim Hackett started and "charging through the door" as Jim Farley said will be necessary though not sufficient for the company to survive in the next 5-20 years. Anything less means that Ford Motor Company becomes a relic of history.

 

Jim Farley is a good businessman, I'm confident he can pull this off.

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1 hour ago, PREMiERdrum said:

Allocating more capital, resources and talent to its strongest businesses and vehicle franchises

I might be reading this the wrong way, but isn’t this what Ford already does? All their money goes into their big name products like f150 and then let other vehicles languish for years. 

A lot of this seemed to be about AVs too. Ford should be spending less money on that and more money on quality products.

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1 hour ago, akirby said:


You do realize this is the continuation of Hackett’s plan, not something new.

 

Maybe some of it and maybe all of it, but Hackett never really explained his plan and hence WS wondering what was going on, and than all of the financial misses that occurred under his tenure. I think Farley has a much clearer vision of what the future looks like for an automotive company is going to look like. 

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1 hour ago, T-dubz said:

I might be reading this the wrong way, but isn’t this what Ford already does? All their money goes into their big name products like f150 and then let other vehicles languish for 


The change happened a couple of years ago when they cancelled cars in favor of new trucks, utilities and BEVs.   Letting things languish is not the same as cancelling them.   Look at how they’re investing in the Bronco sub brand.  That’s unprecedented outside of F-150.  And mustang is sure to follow.

 

1 hour ago, T-dubz said:

A lot of this seemed to be about AVs too. Ford should be spending less money on that and more money on quality products.


Commercial AV offerings.  Think fleets of self driving transits delivering packages or pizza delivery, etc.  Not consumer AVs.  This has been their business plan for AVs for the last few years.

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59 minutes ago, kyle said:

 

Maybe some of it and maybe all of it, but Hackett never really explained his plan and hence WS wondering what was going on, and than all of the financial misses that occurred under his tenure. I think Farley has a much clearer vision of what the future looks like for an automotive company is going to look like. 


Hacketts plan was obvious and he did communicate it.  How else would we know what it was?  Some people just got confused on the other things he said.

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1 hour ago, kyle said:

 

Maybe some of it and maybe all of it, but Hackett never really explained his plan and hence WS wondering what was going on, and than all of the financial misses that occurred under his tenure. I think Farley has a much clearer vision of what the future looks like for an automotive company is going to look like. 

 

Good points kyle sir. In Hackett's defense, when he became Ford CEO in 2017, the company was so out of shape that he desperately had to come up with new strategies to get Ford back on track. This is what his "fitness" initiatives are about. But you are correct that explanations of specific actions in the fitness plan weren't always clear to media, investors, and analysts. And also that Hackett's work was very slow to show results, and that Ford continues to struggle amid the ongoing automotive industry revolution.

 

But had it not been for Hackett becoming Ford CEO, the "door" that Jim Farley talked about would have never been opened. Now it's Farley's job to make sure Ford charges through that door.

Edited by rperez817
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13 minutes ago, akirby said:


Commercial AV offerings.  Think fleets of self driving transits delivering packages or pizza delivery, etc.  Not consumer AVs.  This has been their business plan for AVs for the last few years.

Self driving vehicles won’t be driving on public roads for years - and probably decades. Hard to see Ford making an 8% return on these dollars.

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19 minutes ago, akirby said:


Hacketts plan was obvious and he did communicate it.  How else would we know what it was?  Some people just got confused on the other things he said.

 

Wasn't he responsible for pushing forward the Bronco and Bronco Sport projects? The Bronco is going to be a huge hit, and the strategy of offering the Escape and the Bronco Sport looks like a very effective way to compete with Honda, Hyundai, Kia, Jeep and Toyota in this critical segment. He should get credit for that. 

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3 minutes ago, Trader 10 said:

Self driving vehicles won’t be driving on public roads for years - and probably decades. Hard to see Ford making an 8% return on these dollars.

 

We're talking about very small, well defined areas not all public roads.   And these are commercial businesses who can shut down in bad weather, etc.  Also private campuses.  It's a very narrow use case.

 

The reason is represents higher profit margins is because it's not just an AV vehicle sale it comes with a management service and monthly fees.

 

The jury is out on how successful it will be but there is certainly a limited business case.

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1 hour ago, T-dubz said:

 

I might be reading this the wrong way, but isn’t this what Ford already does? All their money goes into their big name products like f150 and then let other vehicles languish for years. 

A lot of this seemed to be about AVs too. Ford should be spending less money on that and more money on quality products.


And that's exactly why they dropped sedans. They’re playing to their strengths. 

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Sure Hackett gets credit for some of the successes Ford's had recently, but he should also get faulted for the mistakes on his watch. I like some of his initiatives-but he talks in tongues and was brought in to help raise the stock price-something he clearly failed at. Like I said, I won't miss him but to Akirby's point-maybe he was the right person at the right time. This is Farley's moment to grab control of the company and really execute on his plan. I'm excited and hopeful he can kick the company into a high gear. 

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39 minutes ago, jasonj80 said:

Not much as it was a supplier issue.

 

Yep.  Years back, a friend of mine worked in Ford purchasing.  A supplier delivered some bad front end suspension bolts for the Ranger which resulted in a recall.  The supplier had to pay the cost of the recall.

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1 minute ago, T-dubz said:


Well it wasn’t just sedans I was referring to. Edge, expedition, and flex went long times without any substantial changes.

 

But they were still taking up company resources - manufacturing, engineering, marketing, distribution, warranty, etc.   Just keeping nameplates alive has a significant cost in dollars and resources.   When you have a fixed budget the only way to free up resources to work on new things is to stop old things completely and that's the difference between now and a few years ago.

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26 minutes ago, akirby said:

The jury is out on how successful it will be but there is certainly a limited business case.

 

It's a good way for Ford to take what it's learned already with its Smart Mobility and AV business and come up with new products and services. One component of the automotive industry's future is 100% autonomous vehicles, and Ford is at least doing things now to get there.

 

Jim Farley directly managed Ford Smart Mobility and AV before becoming CEO. That is one factor for its success.

Edited by rperez817
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7 minutes ago, T-dubz said:


Well it wasn’t just sedans I was referring to. Edge, expedition, and flex went long times without any substantial changes.

Edge didn't really go that long. Came out as a 2007, facelift for 2010, all new in 2015, facelift for 2019. 
 

I get the feeling like Flex wasn't update because that was kind of the plan all along. I got nothing for Expedition. That was a giant missed opportunity. 

Edited by fuzzymoomoo
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