Ford Motor Company's new CEO isn't ready to abandon the traditional sedan just yet, but the recently minted executive is already on a budget-slicing mission that will focus the automaker on SUVs, trucks, and electric cars in the near future.
Jim Hackett, who took the helm at Ford in May after heading up the company's self-driving cars program, laid out his plans to investors Tuesday in New York. Here's a look at what Hackett's plan entails:
- Ford intends to cut about $14 billion in costs over the next five years by slicing the amount of time it takes to develop products and by reducing the number of unique parts per vehicle.
- Hackett has hacked away at Ford's long-term internal combustion development budget by about a third, shuttling that money instead into designing fully electric and electrified hybrid vehicles.
- In the short term, Ford plans to reduce the number of configurations in which its vehicles are built. Using the mid-size Fusion sedan as an example, Ford said that the car can currently be ordered in 35,000 different configurations. Soon, Ford will reduce that to just 96 variants—a far cry from the days of extensive a la carte options lists.
- Ford says it will reduce development time by about 20 percent and that it will amp up the use of robotics, 3D printing, and virtual reality to design and engineer upcoming vehicles.
- The automaker will reallocate $7 billion toward future development of crossovers and SUVs, which are driving Ford's profits and the bulk of the automaker's sales. Ford did not say exactly where that $7 billion will come from.
It's not just configurations that will go. Hackett hinted that Ford will begin axing nameplates as part of an overall shift toward profitable SUVs and pickups as well as electric and electrified vehicles, many of which will be self-driving taxis. Ford hasn't indicated just what badges will go on the chopping block, however.
Ford's decision to pull money away from internal combustion engine development in favor of electrification comes on top of a $4.5 billion pledge to develop electrified vehicles announced earlier this year.