Formation of new Model e and Blue divisions will enable quicker development of models in both segments
Ford is separating its electric car division from its internal combustion engine businesses in a move that it hopes will encourage investors to value the company more highly.
Ford Model e will focus on electric vehicles as well as developing software and connected vehicle services.
Ford Blue, meanwhile, will be responsible for all combustion engine vehicle development with a task to cut costs, simplify operations and improve quality. Commercial vehicles will be covered by the company’s previously established Ford Pro division.
Ford’s aim is that by dividing the company the two sides will play to their strengths. “We are going all in, creating separate but complementary businesses,” CEO Jim Farley said in a statement. “That will give us start-up speed and unbridled innovation in Ford Model e together with Ford Blue’s industrial know-how, volume and iconic brands like Bronco, that start-ups can only dream about.”
While the two businesses will be split, both will be owned by Ford and its shareholders with no separate stock market listing, as has been rumoured.
Farley will serve as president of Ford Model e, with Doug Field, currently head of advanced technology and embedded systems, named as chief EV and digital systems officer for the division. Kumar Galhotra, currently head of Americas and the International Markets Group, will serve as president of Ford Blue.
Ford CEO Jim Farley has previously stated that the work needed to develop, build and sell an electric car is very different from that for a combustion engine vehicle.
“Running a successful ICE [internal combustion engine] business and the successful BEV [battery electric vehicle] business are not the same,” he told investors on an earnings call in February. “The customers are different. We think the go-to-market is going to have to be different. The product development process and the kinds of products we develop are different. The procurement supply chains are all different. The talent is different.”
Car manufacturers such as Renault, VW and Mercedes have split or are looking to split divisions as they prepare for an electrified future and hive off those legacy structures that focus on internal combustion engines.
Keyword: Ford separates electric and combustion vehicle businesses