Ford Motor Co. late Tuesday unveiled a plan to cut costs, go deeper into electric cars, and allocate more money to SUVs and trucks rather than cars. The goal is “to leverage its unique product strengths, trusted brand and global scale to refocus and thrive in an evolving and disruptive period for the auto industry,” Ford said in a statement. The company targets $10 billion in material cost reductions, and $4 billion in engineering costs by increasing the use of common parts across its lineup. The company also said it will reallocate $7 billion to SUVs and trucks, from cars, and that it plans to build the next-generation Ford Focus in China, saving capital investment and costs. Moreover, Ford said it is cutting its capital expenditures with internal combustion engines by a third and redeploying the capital into electric cars, in addition to a previously announced $4.5 billion in investments in electrification.
“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy — culturally or operationally,” Ford CEO Jim Hackett said in the statement. “Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.” Shares of Ford gained 0.6% after ending the regular trading session up 2.1%.
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