The news has been circulating behind the scenes for a while now, but it had not yet received Ford’s official stamp. It is now confirmed: Ford is splitting its operations in two, creating two separate entities to be treated as partners, in order to better manage the move to electric and the challenges that come with it.
The Blue Oval automaker will separate its automotive operations into what it calls “two distinct, but strategically interdependent, auto businesses - Ford Blue and Ford Model e”. This is all happening as part of the Ford+ plan put forth by Ford CEO Jim Farley.
Ford Blue is thus the new name for the company we've known for over 100 years, and it will develop and produce vehicles with gasoline-powered engines, or ICEs. Ford Model e will handle all electric-vehicle projects and models.
And let's not forget the company's third division, Ford Pro, which oversees commercial operations.
"We have an extraordinary opportunity to lead this thrilling new era of connected and electric vehicles, give our customers the very best of Ford, and help make a real difference for the health of the planet.”
- Bill Ford, Ford Executive Chairman
Of course, while these will officially be two separate entities, expect them to work together when appropriate and necessary. There will, however, be separate management structures. Jim Farley becomes president of Ford Model e, in addition to his role as president and CEO of Ford Motor Company. Doug Field, who previously led Apple's automotive team and served as senior vice president of engineering at Tesla, will be responsible for creating the Ford Model e products as head of electric vehicles and digital systems. He will also lead software and embedded systems development for all of Ford's creations. Kumar Galhotra will be the president of Ford Blue.
The goal behind the exercise is, not to put too fine a point on it, profitability. At least that's the view of John Lawler, Ford's CFO, who stated that “This new structure will enhance our capacity to generate industry-leading growth, profitability and liquidity in this new era of transportation.”
As we've seen, start-ups in the electric vehicle space tend to generate a lot of interest and investment. Ford is certainly hoping to capitalize on this with its new electric-vehicle division.
We'll see what happens next and how the new structure will serve Ford.
