Wed. Sep 28th, 2022

DETROIT – Ford is restructuring vehicle development and supply chain operations, scrambling more executives just days after announcing it will build up to 45,000 vehicles with parts missing due to the shortage.

The Dearborn, Michigan-based automaker has assigned some executives to new roles and said its chief financial officer will begin reworking supply chain operations until a new head of global purchasing is hired.

The changes come at a time of profound change for Ford and the automotive industry, which has been making a living selling petrol-powered vehicles for more than a century. The company plans to turn half of its global production into electric vehicles by 2030, but like its main competitors, Ford will have to continue selling gas-powered vehicles to finance the massive transition.

Earlier this year, CEO Jim Farley split the company into two units, Ford Model and electric vehicle development and Ford Blue for managing internal combustion cars, trucks and SUVs.

Earlier on Thursday, Ford announced CFO John Lawler would perform a makeover of its supply chain operations until the company finds a new supply chain leader.

Doug Field, who was hired by Apple Inc., will now become responsible for the development of advanced products and technology. He will direct vehicle design and hardware engineering and continue to carry out supervisory tasks for electric vehicles, software and digital systems and driver assistance systems.

Former chief operating officer Lisa Drake, now vice president of electric vehicle industrialization, takes over manufacturing engineering as Ford plans to produce electric vehicles at a rate of 2 million per year by the end of 2026.

The company also announced two new hires from Hewlett-Packard and Google to develop vehicle software and driver assistance systems.

“Developing and scaling the next generation of electric and software-defined vehicles requires a different focus and mix of talent from the established Ford team,” Farley said in a statement.

Ford previously announced that Hau Thai-Tang, former head of product development and purchasing, will retire on October 1 after more than 34 years with the company. On Thursday he announced that Dave Filipe, vice president of vehicle hardware, will be retiring.

Sam Abuelsamid, lead electric mobility analyst at Guidehouse Research, said Farley is changing the people Ford hires as he joins other automakers in developing new vehicles that can be modified over time with software updates. “Customers love to have new features added during the life of a car,” he said. “The industry likes it because they see the potential for new revenue streams.”

But that change requires a different mindset than people who are used to developing vehicles that aren’t changed for years until the next version comes out, he said.

Ford, he said, will likely experience instability for a while when major changes occur. “They need to hire a lot of people with different skills,” he said.

On Monday, Ford revealed that a shortage of components would keep many of its most profitable vehicles sitting on batches waiting to be fully assembled. The problem forced the automaker to cut its third-quarter earnings forecast. The company was also hampered by problems with the launch of new vehicle production and high warranty claims.

Ford also said on Monday that inflation-related supplier costs for the third quarter were about $ 1 billion above planned.

Last month, the company laid off 3,000 employees to cut costs and contribute to the long transition from internal combustion to battery-powered vehicles.

Governments around the world are pushing to eliminate combustion cars to mitigate the impact of climate change. Companies like Ford have been orchestrating the liquidation of their combustion businesses for multiple years, although they are still raising money to finance the development of electric vehicles.

Shares of Ford fell just under 1% on Thursday due to the decline in broader markets. Equities are down about 38% for the year.

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