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Ford To Split EV Unit?


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3 hours ago, mackinaw said:

 

Of course you realize that a brand new bureaucracy will form and become established if Ford does establish a separate BEV group.  Just because a company hires new, energetic engineers doesn't mean they won't establish their own bureaucracy and jealously guard it.  It's called human nature.  


Absolutely.  I’ve seen this many times in IT - moving from old to new technology and using the new processes and push to do things faster as an excuse to bypass vital steps in the name of modernization.  This is exactly what happened with the Tesla cybertruck bypassing practical design, ergonomics, crash testing and pedestrian safety in favor of PR.  Today in IT it’s devops and public cloud,

 

What you do is give the folks doing design and engineering more leeway to move faster, less approvals, etc but you don’t allow them to be lazy and skip critical steps or take shortcuts.  This requires direct involvement at all levels of management and clear top down direction.  I think Farley has the ability to pull it off but it will take hard work.

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What they need to do is avoid another “dry clutch Powershift” situation where concerns over a problem were down played and assumed to be fixable on the fly with a software patch at the first service. We all hope that Ford learned its lesson but I wonder sometimes…

Edited by jpd80
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On 2/26/2022 at 1:52 AM, rperez817 said:

 

There's nothing complicated about Ford and other incumbent automakers considering some form of separation of their BEV/AV/mobility services operations from their ICE vehicle business. The former is high growth and high tech, while the latter was sometimes a past cash cow but now rapidly heading toward extinction. Management strategies and approaches are vastly different for these 2 types of businesses.

 

A separate BEV/AV/mobility services business could provide Ford these potential advantages.

  • Access to capital markets - NO, they have that now.
  • Attracting outside talent, especially from companies outside the legacy automotive industry - Even if they do create a new company it's still going to be "FORD EV" or something with the Ford name in it.  They're not going to throw away the Ford name "because".  So let's not pretend like college kid would ONLY work for "FORD EV" but wouldn't work for today's Ford on the EV unit,
  • Attracting partners and dedicated supply chain solutions from suppliers - Uh, this is what they already do now?
  • Protecting against liability for past carbon emissions and pollution generated by ICE - Absolutely ridiculous comment.  1) Ford has always been in compliance with existing laws, 2) this idea of "reparations" for past emissions is absurd.  If this idea is actually being proposed by a government official (which given some of them I wouldn't be surprised), they should be removed from office.

 

 

 

13 hours ago, jpd80 said:

What they need to do is avoid another “dry clutch Powershift” situation where concerns over a problem were down played and assumed to be fixable on the fly with a software patch at the first service. We all hope that Ford learned its lesson but I wonder sometimes…

 

Ha, I get what you mean, but with EV cars, and vehicles ever more becoming "devices", a software patch just might solve whatever problem exists soon enough lol.  That wasn't your point, though.

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24 minutes ago, rmc523 said:

Ha, I get what you mean, but with EV cars, and vehicles ever more becoming "devices", a software patch just might solve whatever problem exists soon enough lol.  That wasn't your point, though.

Correct, think of Ford buying cheap under designed parts to save money, how does a software patch make up for that?

Answer: It keeps the red warning lights from coming on….

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13 hours ago, jpd80 said:

Correct, think of Ford buying cheap under designed parts to save money, how does a software patch make up for that?

Answer: It keeps the red warning lights from coming on….


Software can do a lot to work around an issue.  E.g. limiting engine torque in first gear.  Changing shift rpm and pressures.  Depends on the problem and what causes it.

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4 hours ago, akirby said:


Software can do a lot to work around an issue.  E.g. limiting engine torque in first gear.  Changing shift rpm and pressures.  Depends on the problem and what causes it.

Exactly but it shouldn’t be the go cure all for bad design.

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On 2/27/2022 at 9:34 PM, rmc523 said:

Protecting against liability for past carbon emissions and pollution generated by ICE - Absolutely ridiculous comment.  1) Ford has always been in compliance with existing laws, 2) this idea of "reparations" for past emissions is absurd. 

 

Not absurd at all, legal action involving cumulative and/or historical emissions by incumbent automakers is a very real possibility in the years to come, especially for automakers that don't act quickly to phase out ICE powered vehicles ASAP. Last September the German NGO DUH filed lawsuits against Mercedes-Benz and BMW for "refusing to tighten their carbon emissions target and stop producing fossil fuel fuel-emitting cars by 2030". The DUH v. BMW and DUH v. Mercedes-Benz lawsuits are the latest in a growing caseload of climate change litigation aimed at the private sector.

 

While Ford in its current form is in better shape than companies like BMW, VW, and Toyota that refused to sign the COP26 declaration for ZEV late last year, it may still be affected. Columbia Law School's Climate Law Blog said this. Climate Law Blog » Blog Archive » The contribution of automakers to climate change: broadening the reach of private sector defendants in climate litigation (columbia.edu)

 

Quote

In the United States, the transportation sector is the leading source of greenhouse gas emissions, accounting for 29 percent of total emissions. Thus, reducing pollution from transportation represents one of the most critical steps to sustaining a livable climate.

Automakers could be found negligent for breaching the applicable standard of care by continuing to sell fuel-emitting vehicles whose cumulative emissions create a reasonably foreseeable risk of harm due to their contributions to anthropogenic climate change. While a ruling on the DUH cases is not likely before 2022, the claim shows a significant development in global climate litigation.

 

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1 hour ago, rperez817 said:

 

Not absurd at all, legal action involving cumulative and/or historical emissions by incumbent automakers is a very real possibility in the years to come, especially for automakers that don't act quickly to phase out ICE powered vehicles ASAP. Last September the German NGO DUH filed lawsuits against Mercedes-Benz and BMW for "refusing to tighten their carbon emissions target and stop producing fossil fuel fuel-emitting cars by 2030". The DUH v. BMW and DUH v. Mercedes-Benz lawsuits are the latest in a growing caseload of climate change litigation aimed at the private sector.

 

While Ford in its current form is in better shape than companies like BMW, VW, and Toyota that refused to sign the COP26 declaration for ZEV late last year, it may still be affected. Columbia Law School's Climate Law Blog said this. Climate Law Blog » Blog Archive » The contribution of automakers to climate change: broadening the reach of private sector defendants in climate litigation (columbia.edu)

 

 

 

Just because they're doing it doesn't mean it isn't absurd.

 

Lawmakers set some arbitrary date.  Automakers work toward that date, balancing ICE sales that people actually want and are buying with BEV sales that aren't there yet.  Lawmakers don't like how automakers are getting to the arbitrary date, so now lawsuits for past things?  Absurd.

Edited by rmc523
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1 hour ago, rmc523 said:

 

Just because they're doing it doesn't mean it isn't absurd.

 

Lawmakers set some arbitrary date.  Automakers work toward that date, balancing ICE sales that people actually want and are buying with BEV sales that aren't there yet.  Lawmakers don't like how automakers are getting to the arbitrary date, so now lawsuits for past things?  Absurd.

I have a feeling gm and Ford are overly optimistic with their EV plans and it will bite them in the ass.  It is good PR to pander to the woke political crowd in DC even if they're failures.  However the market will dictate what will be built.  With Build Back Better DOA, there will not be the massive taxpayer incentives that was supposed to stimulate demand for these things.  

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47 minutes ago, Footballfan said:

I have a feeling gm and Ford are overly optimistic with their EV plans and it will bite them in the ass.  It is good PR to pander to the woke political crowd in DC even if they're failures.  However the market will dictate what will be built.  With Build Back Better DOA, there will not be the massive taxpayer incentives that was supposed to stimulate demand for these things.  

 

That's just it though - the good part about having their feet in both ponds though is that they can adjust the percentages accordingly to the market between ICE and BEV, especially if they have "duplicate"/parallel products in certain segments for some time.

 

Despite rperez's insistence it's the worst thing they could ever do, I think it's a good thing.    And I'd rather have them over prepare early for BEVs than be left be hind.  They can always scale back BEV plans/push the timeline out if need be.

Edited by rmc523
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8 hours ago, rmc523 said:

Despite rperez's insistence it's the worst thing they could ever do

 

"Straddling the old and new worlds" is indeed the worst thing Ford can do nowadays, that concern came from former Ford CEO Jim Hackett a couple years ago.

 

As Business Innovation Professor Enrique Dans said about Volkswagen specifically but also about incumbent automakers generally, "don’t tell me how many electric vehicles do you plan to manufacture: tell me when will you stop manufacturing the polluting ones." Ford has an answer to that, it is year 2040 in all markets around the world. The question remains, is that soon enough?

 

Ford's "old world" stuff are burdens that Tesla, Rivian, and other 100% electric vehicle startups don't have to worry about. By selling off its ICE vehicle operations to private equity firms or something similar, the resulting BEV/AV/Mobility Services Ford "Newco" may be able to more quickly achieve Jim Farley's own goal of second place in BEV among global automakers to Tesla.

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10 hours ago, rmc523 said:

Just because they're doing it doesn't mean it isn't absurd.

 

E&E News reported in 2020 that Ford's and GM's past activities have "striking parallels" to what went on at ExxonMobil regarding their knowledge of fossil fuels and climate change vs. their business strategies. ExxonMobil has been hit by a slew of climate change lawsuits in the past few years. The same reasoning could potentially be applied toward litigation against Ford and GM. Exclusive: GM, Ford knew about climate change 50 years ago - E&E News (eenews.net)

 



Scientists at two of America’s biggest automakers knew as early as the 1960s that car emissions caused climate change, a monthslong investigation by E&E News has found.

The discoveries by General Motors and Ford Motor Co. preceded decades of political lobbying by the two car giants that undermined global attempts to reduce emissions while stalling U.S. efforts to make vehicles cleaner.

The investigation reveals striking parallels between two of the country’s biggest automakers and Exxon Mobil Corp., one of the world’s largest publicly traded oil and gas companies. Exxon privately knew about climate change in the late 1970s but publicly denied the scientific consensus for decades, according to 2015 reporting by InsideClimate News and the Los Angeles Times that spawned the hashtag #ExxonKnew and fueled a wave of climate litigation against the oil major.

The findings by E&E News reveal that GM and Ford were "deeply and actively engaged" since the 1960s in understanding how their cars affected the climate, said Carroll Muffett, president and CEO of the Center for International Environmental Law.

"We also know that certainly by the 1980s and 1990s, the auto industry was involved in efforts to undermine climate science and stop progress to address climate change," Muffett said. "But a different path was available."

Today the companies acknowledge that climate change is a problem and in statements to E&E News outlined their plans to increase production of clean cars.

 

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2 hours ago, rperez817 said:

 

"Straddling the old and new worlds" is indeed the worst thing Ford can do nowadays, that concern came from former Ford CEO Jim Hackett a couple years ago.

 

As Business Innovation Professor Enrique Dans said about Volkswagen specifically but also about incumbent automakers generally, "don’t tell me how many electric vehicles do you plan to manufacture: tell me when will you stop manufacturing the polluting ones." Ford has an answer to that, it is year 2040 in all markets around the world. The question remains, is that soon enough?

 

Ford's "old world" stuff are burdens that Tesla, Rivian, and other 100% electric vehicle startups don't have to worry about. By selling off its ICE vehicle operations to private equity firms or something similar, the resulting BEV/AV/Mobility Services Ford "Newco" may be able to more quickly achieve Jim Farley's own goal of second place in BEV among global automakers to Tesla.

 

You act as if EV startups have no burdens of their own that Ford doesn't have.  Ford has guaranteed revenues and profits from ICE products that BEV startups don't.

 

Whether you like it or not, BEV doesn't work for everyone yet.  Over time they may.

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Straddling both worlds means continuing to develop ICE platforms and powertrains and not committing enough resources to BEVs.   Only politicians and climate extremists think we have to eliminate ICE immediately.  It doesn’t make business sense.

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https://www.reuters.com/business/autos-transportation/exclusive-ford-set-announce-plans-run-ev-ice-separate-businesses-sources-2022-03-02/

 

Getting easier to read between the lines, particularly after hearing Farley talk about all the 'waste' and assets that can't be transitioned to EV on the ICE side.  Ford family in particular and shareholders in general ought to eventually profit handsomely if all goes well.

Edited by 7Mary3
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58 minutes ago, 7Mary3 said:

https://www.reuters.com/business/autos-transportation/exclusive-ford-set-announce-plans-run-ev-ice-separate-businesses-sources-2022-03-02/

 

Getting easier to read between the lines, particularly after hearing Farley talk about all the 'waste' and assets that can't be transitioned to EV on the ICE side.  Ford family in particular and shareholders in general ought to eventually profit handsomely if all goes well.


It will be a different division not a separate company just like several of us have said.  Separate executives, different goals and processes but still sharing back office functions and other shared components.  Allows separate financial reporting and takes the legacy costs out of the EV results.  Also enables creative accounting.

 

I wonder if this makes it easier to impose different rules and processes on dealers?

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1 hour ago, 7Mary3 said:

https://www.reuters.com/business/autos-transportation/exclusive-ford-set-announce-plans-run-ev-ice-separate-businesses-sources-2022-03-02/

 

Getting easier to read between the lines, particularly after hearing Farley talk about all the 'waste' and assets that can't be transitioned to EV on the ICE side.  Ford family in particular and shareholders in general ought to eventually profit handsomely if all goes well.

 

Thank you for sharing this 7Mary3. The separation of BEV operations (and presumably advanced technology operations) from legacy ICE powered vehicle operations within the Ford corporate umbrella is a great starting point. This arrangement should not only help get Ford out of its rut resulting from "straddling the old and new worlds", but also put Ford in a good position for full spinoffs in the future, just as the industry officials quoted in the Reuters article mentioned.

 

However, by separating the EV business into a separate unit, Ford would be setting the table for a possible spinoff down the road, industry officials said

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So if Ford Model e and Ford Blue are separate business units, will Ford be game to report their respective profit/loss/ debt position each quarter…….or is this move just froth and bubble to impress Wall Street and investors. The way I see it, Model e currently has a $30 billion debt that will take years to work down, or does that become Ford Blue’s yoke of oppression?

 

Hypothetically, if GM offered Ford $30 billion for Ford Blue, would Farley recommend that the board take it?

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14 minutes ago, Twin Turbo said:

And how will CAFE rules be applied? Still across the entire range as it is now? Or will the rules be applied to each new division of the company. I can only assume the former, as with ever tightening rules, ICE would struggle.

It will be applied across the entire range.  Key words are "Corporate Average"

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47 minutes ago, jpd80 said:

So if Ford Model e and Ford Blue are separate business units, will Ford be game to report their respective profit/loss/ debt position each quarter…….or is this move just froth and bubble to impress Wall Street and investors. The way I see it, Model e currently has a $30 billion debt that will take years to work down, or does that become Ford Blue’s yoke of oppression?

 

Hypothetically, if GM offered Ford $30 billion for Ford Blue, would Farley recommend that the board take it?

This kind if reminds me of what GM did in the mid 1980s with splitting the big car and small car operations into two groups.  It turned out to be a cluster@#&%.

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On 3/1/2022 at 12:41 AM, Footballfan said:

I have a feeling gm and Ford are overly optimistic with their EV plans and it will bite them in the ass.  It is good PR to pander to the woke political crowd in DC even if they're failures.  However the market will dictate what will be built.  With Build Back Better DOA, there will not be the massive taxpayer incentives that was supposed to stimulate demand for these things.  

 

I was disappointed that Biden didn't spend more time talking about Global Warming and steps to combat it last nite in speech. EV subsidies will be needed to speed up the transition, and not just for upper income people who itemize their taxes. Over last week climate scientists have been putting out warnings of accelerating warming of oceans. Here in Central FL, it will 90+ degrees for many days later this week. Already warnings for Atlantic coast and Gulf region for rising seas over next 10 years. 

 

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