ford-reportedly-set-to-run-electric-vehicle-and-internal-combustion-businesses-separately

Ford Reportedly Set to Run Electric Vehicle and Internal Combustion Businesses Separately

Ford Motor Company reportedly is reorganizing the company into an electric vehicle wing outside of its internal-combustion engine operation.

Reuters reported that the separate business spinoff would fast-track growth among its EV products.

The two divisions will have separate names but stay under the Ford Motor Company umbrella. Unnamed company officials said the move is similar to the company’s Ford Pro commercial business for corporate services. 

New Names, Same Ol’ Ford Operation?

So, the company’s doing the split, but you wouldn’t hear Ford officials go on the record about it.

Soon, the company will name new leaders to head the divisions. They’ll also come up with updated product targets. Sources said both EV and ICE groups would eventually have different financial results.

Ford spokesman T.R. Reid would not confirm the report. He went on to say the company was “focused” on its Ford+ plan “to transform the company and thrive in this new era of electric and connected vehicles.”

It makes you wonder if one becomes more successful if the other gets sold or spun off into another company one day.

Last week, Chief Executive Jim Farley squashed that rumor, saying Ford had no plans to spin off either of the two businesses.

Farley was high on the company’s recent consumer satisfaction reports. Ford’s EV products got high marks while Elon Musk’s Tesla car stumbled.

“We know our competition is Nio and Tesla, and we have to beat them, not match them,” he said last Wednesday at a Wolfe Research conference. “And we also have to beat the best of the ICE players.”

Reuters affirmed Ford’s decision would leave itself open to a possible spinoff down the road. Industry officials were keen on that fact.  

You have to wonder if consumers and government officials would see it that way in the future.

Some Have Thoughts About Splitsville For Car Companies

Companies with low-carbon technology like Tesla are hot right now for investments. Some investors and industry insiders think it’s wise for carmakers to split up their companies to get better values.

General Motors has said ICE profits would fund a down-the-road transition into EVs.

Earlier this month, French automaker Renault may have paved the way for Ford to do its split. The company said it would do its EV plans in France while conducting its ICE operations outside the country.

Despite the talk, Ford said its EV and ICE businesses were underperforming. Farley, however, said the ICE business could tamp down those costs.

Ultimately, Farley called out several wasteful issues. He said the company had too many people, too much investment, too much complexity, and not enough experience in “transitioning our assets.”

The executive called for more EV business staff to improve revenue in electrical components, advanced electrical architectures, and the digital customer experience.