Ford is following that of other automakers and investing in electrification and connectivity. The company also said it would redirect $7 billion from car production to increase SUV and truck production.
The company is planning on moving $500 million from combustion engines to electric and hybrid vehicle development. That is above a $4.5 billion commitment previously announced as part of a plan to bring 13 electric and hybrid vehicles to market in the next five years.
“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally,” Jim Hackett, president & CEO, said. “Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”
Hackett said the company plans to reduce factory sizes in the future by using more robots and accelerating use of 3D printing of parts, robotics, virtual reality tools and big data to boost logistics efficiency. It will also shift production of small vehicles like its Focus to China.
A model for the reimagining of Ford can be found in the redesign of the 2015 Ford F-150. Hackett cited the success of the F-Series, which has gained market share while the average transaction price has increased 16%. It has improved fuel economy and increased capability for customers, thanks in part to a 700-pound weight reduction that helped make the F-150 the company’s most positive contributor to CAFE standards for model year 2018. Additionally, 90 percent of the manufacturing equipment can be reused for the next-generation F-150, reducing future capital requirements.
Did you know?
According to McKinsey Energy Insights, cost parity for electric vehicles versus diesel vehicles should come by 2025 in most of the world, with parity in the U.S. and China expected by 2030 due to market dynamics.
“We are making significant progress toward our goals while acknowledging our financial results will be uneven during this time.”
- Jon Russell, Celadon COO, on the company’s financials
In other news:
Class 8 orders climb in September
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Many truckers still without ELDs
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DOT seeks input on regulations
The Department of Transportation is asking for public comment on several existing regulations, including the ELD rule, driver training rules, and greenhouse gas regulations. (Transport Topics)
Celadon acknowledges SEC investigation
Celadon Group has confirmed it is under SEC investigation for its financial troubles that came to light earlier this year. (Transport Topics)
Flexport closes $110 million funding round
Shipping logistics startup Flexport has closed a $110 million round of Series C funding, turning down additional investments that would have valued the company over $1 billion. (Supply Chain Brain)
Flexport has become the latest freight startup that is benefitting from investor interest in the transportation sector. The four-year-old San Francisco company just closed a $110 million round of funding bringing its total funding to about $204 million to date. The company expects to top $500 million in revenue this year.
Hammer down everyone!