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Ford to Fund Its EV Efforts in Part by Laying Off 8000 Workers


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https://www.caranddriver.com/news/a40669316/ford-layoffs-to-fund-evs/#:~:text=An anonymous source told Bloomberg,more money into EV development.

 

 

JUL 20, 2022

 

"...The (8000) cuts will reportedly come in the Ford Blue division, which handles production of Ford's internal-combustion-engine vehicles, and primarily come from salaried positions. There are approximately 31,000 salaried workers at Ford currently."

 

-Ovaltine

 

Edited by Ovaltine
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These actions represent an important step getting Ford out of the "old world" of the automotive industry and into the new. The quote from Jim Farley about Ford's ICE vehicle operations in the Car and Driver article Ovaltine shared is a good summary of Ford's predicament nowadays.

 

Quote

"We have too many people, we have too much investment, we have too much complexity, and we don't have expertise in transitioning our assets."

Edited by rperez817
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35 minutes ago, 7Mary3 said:

Can't transition assets, so start all over again?  Will any other large auto manufacturer need to do this?

 

All incumbent automakers will need to transition to a 100% electric vehicle lineup soon. The Ford+ plan implemented this year with separate Model e and Blue divisions within a common corporate umbrella puts Ford in a good position to not only survive but thrive in this ongoing revolution.

 

It remains to be seen if other incumbent automakers follow the Ford+ business model, or go a step further and completely spin off their ICE vehicle operations by selling those assets to private equity firms for example.

Edited by rperez817
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1 hour ago, rperez817 said:

 

All incumbent automakers will need to transition to a 100% electric vehicle lineup soon. The Ford+ plan implemented this year with separate Model e and Blue divisions within a common corporate umbrella puts Ford in a good position to not only survive but thrive in this ongoing revolution.

 

It remains to be seen if other incumbent automakers follow the Ford+ business model, or go a step further and completely spin off their ICE vehicle operations by selling those assets to private equity firms for example.

 

Sure they all will need to transition, but I don't see VW, GM, or Toyota splitting into separate entities like Ford is doing.  And, they are not as of yet talking about such drastic cuts.  FWIW, my impression is Ford early on wasn't taking the EV revolution seriously and when they finally did they made a huge misstep in not setting up to do the battery engineering and manufacturing in-house (or at least with a partner).  Ford is not alone as Toyota seems to have guessed wrong too with their fuel cell and hybrid approach, likely all to be rendered obsolete with rapidly developing battery tech..

 

 

  

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

 

Sure they all will need to transition, but I don't see VW, GM, or Toyota splitting into separate entities like Ford is doing.  And, they are not as of yet talking about such drastic cuts.  FWIW, my impression is Ford early on wasn't taking the EV revolution seriously and when they finally did they made a huge misstep in not setting up to do the battery engineering and manufacturing in-house (or at least with a partner).  Ford is not alone as Toyota seems to have guessed wrong too with their fuel cell and hybrid approach, likely all to be rendered obsolete with rapidly developing battery tech..


How do you know other companies didn’t start with separate EV business units?

 

It’s not that Ford didn’t take EVs seriously, they just weren’t willing to invest heavily in EVs until the market was a little better known.  Had EVs not caught on so quickly they’d be sitting pretty.  As it stands they’re in a pretty good position anyway.

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1 hour ago, akirby said:

Seems obvious they don’t need new platforms or IC powertrains but I don’t think that’s 8k people.

They could look beyond the offices and at plant management. IMO they could shave a layer or 2 and still function just fine, plus that way maybe communication would improve between the line and the top level. 

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2 hours ago, rperez817 said:

 

All incumbent automakers will need to transition to a 100% electric vehicle lineup soon. The Ford+ plan implemented this year with separate Model e and Blue divisions within a common corporate umbrella puts Ford in a good position to not only survive but thrive in this ongoing revolution.

 

It remains to be seen if other incumbent automakers follow the Ford+ business model, or go a step further and completely spin off their ICE vehicle operations by selling those assets to private equity firms for example.

Any automaker who is ignorant enough to transition to 100% electric is asking for bankruptcy.  Ford and gm had their hands out for money that Biden promised and is looking more likely they won't get.  The automakers that survive will be the ones that offer the customer what they want whether it be ICE or EV.

Edited by Footballfan
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Let's see.  Quality is in the toilet and the launches over the past few years have been disasters.  Now you are cutting resources from the division that is supposedly supposed to float Ford's EV fantasy/dreams.  What could possibly go wrong? 

 

 Sounds more like a CYA Wall Street appeasing move to me and to make up for the Rivian investment disaster. 

 

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29 minutes ago, Footballfan said:

Sounds more like a CYA Wall Street appeasing move to me and to make up for the Rivian investment disaster. 

 

What Rivian investment disaster? They more than recouped the cash investment they had when they sold part of the stake after the lockup ended.

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1 hour ago, akirby said:

It’s not that Ford didn’t take EVs seriously

 

Automotive industry analysts and experts have affirmed exactly what 7Mary3 stated: "Ford early on wasn't taking the EV revolution seriously and when they finally did they made a huge misstep in not setting up to do the battery engineering and manufacturing in-house (or at least with a partner)". And Jim Farley admitted just before the Ford+ plan was announced that Ford lacked the expertise to transition to BEV, due in no small part to poor past decisions like those that 7Mary3 mentioned.

 

What's important nowadays is that Ford has a plan (Ford+) to rectify their past mistakes. If executed well, the Ford+ plan may accelerate the company's own goal to completely phase out sales of new ICE powered vehicles in all markets where they do business. Ford's current timeline for that is 2040, but it wouldn't be surprising if Ford achieves that by 2035 or even 2030.

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2 hours ago, rperez817 said:

 

Automotive industry analysts and experts have affirmed exactly what 7Mary3 stated: "Ford early on wasn't taking the EV revolution seriously and when they finally did they made a huge misstep in not setting up to do the battery engineering and manufacturing in-house (or at least with a partner)". And Jim Farley admitted just before the Ford+ plan was announced that Ford lacked the expertise to transition to BEV, due in no small part to poor past decisions like those that 7Mary3 mentioned.

 

What's important nowadays is that Ford has a plan (Ford+) to rectify their past mistakes. If executed well, the Ford+ plan may accelerate the company's own goal to completely phase out sales of new ICE powered vehicles in all markets where they do business. Ford's current timeline for that is 2040, but it wouldn't be surprising if Ford achieves that by 2035 or even 2030.

2030 is awfully close.  Have you seen how long E series has stuck around with little to no investment?  I don’t think Ford will have the supply chains setup to handle all the volume before the late ‘30s.  Let’s see how the blue oval city thing works out.  That will give a better indication of how fast things are actually moving in the EV direction.

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2 hours ago, Flying68 said:

What Rivian investment disaster? They more than recouped the cash investment they had when they sold part of the stake after the lockup ended.

Correct, the original investment was $500 million back in 2019, Ford sells like 8% of it stock and gets $200 million back….

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Well I hope they don't cut too many of those positions in the quality control department. They really can't afford for quality to get worse right now. Ford blue won't be much of a profit generator if the products become lackluster in the near future.

Edited by 2005Explorer
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1 hour ago, slemke said:

2030 is awfully close.  Have you seen how long E series has stuck around with little to no investment?  I don’t think Ford will have the supply chains setup to handle all the volume before the late ‘30s.  Let’s see how the blue oval city thing works out.  That will give a better indication of how fast things are actually moving in the EV direction.

If BOC even reaches expectations.

 

Along your lines, I remember in 2008 all the Big Three were supposedly ditching pickups and SUVs and moving to small cars like the Focus, Fiesta, Cruise, Sonic, and Dart.  We were told then this was a "forever" thing and there's no looking back.  Look where we are now- you cannot buy a compact car from the Big Three and the companies are short of full-size truck capacity.

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3 hours ago, rperez817 said:

 

Automotive industry analysts and experts have affirmed exactly what 7Mary3 stated: "Ford early on wasn't taking the EV revolution seriously and when they finally did they made a huge misstep in not setting up to do the battery engineering and manufacturing in-house (or at least with a partner)". And Jim Farley admitted just before the Ford+ plan was announced that Ford lacked the expertise to transition to BEV, due in no small part to poor past decisions like those that 7Mary3 mentioned.

 

What's important nowadays is that Ford has a plan (Ford+) to rectify their past mistakes. If executed well, the Ford+ plan may accelerate the company's own goal to completely phase out sales of new ICE powered vehicles in all markets where they do business. Ford's current timeline for that is 2040, but it wouldn't be surprising if Ford achieves that by 2035 or even 2030.

They may have the capability to go all electric, but that does not mean there will be market acceptance.  

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1 hour ago, 2005Explorer said:

Well I hope they don't cut too many of those positions in the quality control department. They really can't afford for quality to get worse right now. Ford blue won't be much of a profit generator if the products become lackluster in the near future.

Remember the 1980s when the Taurus was supposed to replace the Crown Vic, the Sable the Grand Marquis, the FWD Continental the Town Car?  Or the Ranger replacing for the most part the F-Series?  Or Probe replacing Mustang? Seems the customers wanted those vehicles and Ford was then stuck with having to soldier on with those vehicles for years before a major redesign.  The powertrains- especially V-8s were ancient. I hope we are not seeing a repeat of that.

Edited by Footballfan
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Something that sticks in my mind was about 6 or so years ago GM was set to develop a Wranger-fighter (possibly based on the aborted Hummer H4 program) tentively named 'Blazer'.  Just about the same time Ford embarked on the new Bronco.  Early on Barra and company decided that the money needed to develop this new off-roader could better be spent on BEV programs that would spawn a number of SUV's and light trucks.  So, the 'Blazer' name went to a mid-size (guaranteed profitable) CUV, and we are just stating to see the results of where the 'real off-roader' money went.  Now don't get me wrong, I am glad Ford did the Bronco.  It should prove profitable if they can actually deliver them and improve the quality, and most importantly, it should help fund Ford's BEV programs as Farley has stated.     

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4 hours ago, Footballfan said:

Remember the 1980s when the Taurus was supposed to replace the Crown Vic, the Sable the Grand Marquis, the FWD Continental the Town Car? Or the Ranger replacing for the most part the F-Series?  Or Probe replacing Mustang? Seems the customers wanted those vehicles and Ford was then stuck with having to soldier on with those vehicles for years before a major redesign.  The powertrains- especially V-8s were ancient. I hope we are not seeing a repeat of that.

The three vehicles that make significant profit in descending order are F Series, Ranger and Transit. Everything else is far less of a contributor to the bottom line, that’s why Ford is glad to be rid of certain vehicles and move to BEVs. Sure , they make a lot of mistakes but for all of that, Ford still seems to make a fair chunk of profit….even with paper losses.

 

The sad part is that it’s only starting to leak out how many won’t be with Ford when mass BEV changeover  happens, this 8,000 cut is only the beginning…..

Edited by jpd80
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