Ford Announces Separate "Model e" EV Division and "Ford Blue" Internal Combustion Division

[Carolina Jim]

I'm guessing they can more easily shift ICE profits to develop EVs.

Next move: "Tracking Stock"

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[Mango&Moose]

They want your tax dollars from .gov

Cheap energy is super expensive.

 

[North7]

Update: video added to post #1, CNBC business analysis.

 

[vrtical]

There are a lot of reorgs occurring due to the energy push and future initiatives. I am in the middle of one.

 

[flip]

Tag this thread to revisit my prediction in a year or so. Dealers had to opt into EV and buy a bunch of equipment well before Mach E came out. Still not enough running around to justify the money outlay if you look at if from a service ROI. I really think Ford is going to use the EV spin off to be able to do direct sales but utilize the dealer network for service (this is where Ford would have an advantage over Tesla). There will probably be a separate or addendum to the master dealer agreement that allowed them to do this. Wouldn't be the least surprised if they pushed for separate facilities if you want to have vehicles on the lot to sell, otherwise direct order only.

 

[drew707]

Update: video added to post #1, CNBC business analysis.

Ford Model e will:

• Attract and retain the best software, engineering, design and UX talent and perfect new technologies and concepts that can be applied across the Ford enterprise
• Embrace a clean-sheet approach to designing, launching and scaling breakthrough, high-volume electric and connected products and services for retail, commercial and shared mobility
• Develop the key technologies and capabilities – such as EV platforms, batteries, e-motors, inverters, charging and recycling – to create ground-up, breakthrough electric vehicles
• Create the software platforms and fully networked vehicle architectures to support delightful, always-on and ever-improving vehicles and experiences.

Ford Model e also will lead on creating an exciting new shopping, buying and ownership experience for its future electric vehicle customers that includes simple, intuitive e-commerce platforms, transparent pricing and personalized customer support from Ford ambassadors. Ford Blue will adapt these best practices to enhance the experience of its ICE customers and deliver new levels of customer connectivity and satisfaction.

Ford Blue will exercise Ford’s deep automotive expertise to:

• Strengthen the iconic Ford vehicles customers love, such as F-Series, Ranger and Maverick trucks, Bronco and Explorer SUVs, and Mustang, with investments in new models, derivatives, experiences and services
• Help customers fulfill their passions and daily lives with tailored brand and vehicle experiences, from off-roading to performance to family activities, especially for those situations when ICE capabilities are required
• Deliver new, connected, personalized and always-on experiences for customers powered by Ford Model e’s software and embedded systems
• Make industry-leading quality and exceptional service a reason to choose and stay with Ford
• Root out waste and dramatically reduce product, manufacturing and quality costs; and
• Support Ford Model e and Ford Pro through proven, global-scale engineering, purchasing, manufacturing, and vehicle test and development capabilities for world-class safety, ride and handling, quiet and comfort, and durability.

 

[BlueBronco]

So how exactly would a split even work? Would they now have models that are strictly EV only or ICE only? Does each one develop their own products? And what about sales, are they sold side by side, different stores and dealership agreements? "Oh, you want one of them Lightnings? We only sell gassers here, yer gonna have to go down the road to that there mach 'lectric store for that." So many questions.

 

[drew707]

So how exactly would a split even work? Would they now have models that are strictly EV only or ICE only? Does each one develop their own products? And what about sales, are they sold side by side, different stores and dealership agreements? "Oh, you want one of them Lightnings? We only sell gassers here, yer gonna have to go down the road to that there mach 'lectric store for that." So many questions.

See my post above yours. It’s still one ford system

 

[crimsonhokie]

Ford Model e will:

• Attract and retain the best software, engineering, design and UX talent and perfect new technologies and concepts that can be applied across the Ford enterprise
• Embrace a clean-sheet approach to designing, launching and scaling breakthrough, high-volume electric and connected products and services for retail, commercial and shared mobility
• Develop the key technologies and capabilities – such as EV platforms, batteries, e-motors, inverters, charging and recycling – to create ground-up, breakthrough electric vehicles
• Create the software platforms and fully networked vehicle architectures to support delightful, always-on and ever-improving vehicles and experiences.

Ford Model e also will lead on creating an exciting new shopping, buying and ownership experience for its future electric vehicle customers that includes simple, intuitive e-commerce platforms, transparent pricing and personalized customer support from Ford ambassadors. Ford Blue will adapt these best practices to enhance the experience of its ICE customers and deliver new levels of customer connectivity and satisfaction.

Ford Blue will exercise Ford’s deep automotive expertise to:

• Strengthen the iconic Ford vehicles customers love, such as F-Series, Ranger and Maverick trucks, Bronco and Explorer SUVs, and Mustang, with investments in new models, derivatives, experiences and services
• Help customers fulfill their passions and daily lives with tailored brand and vehicle experiences, from off-roading to performance to family activities, especially for those situations when ICE capabilities are required
• Deliver new, connected, personalized and always-on experiences for customers powered by Ford Model e’s software and embedded systems
• Make industry-leading quality and exceptional service a reason to choose and stay with Ford
• Root out waste and dramatically reduce product, manufacturing and quality costs; and
• Support Ford Model e and Ford Pro through proven, global-scale engineering, purchasing, manufacturing, and vehicle test and development capabilities for world-class safety, ride and handling, quiet and comfort, and durability.

@drew707 were you on the BCG/McKinsey team that developed this strategy? I’m only half kidding lol

 

[Lucky]

From my view, this has more to do with valuation than anything else. EV companies have crazy multiples, Ford is trading at 8x earnings, this will make the financials separate, thus easier to raise the valuation on the EV business and Ford overall.

 

[drew707]

From my view, this has more to do with valuation than anything else. EV companies have crazy multiples, Ford is trading at 8x earnings, this will make the financials separate, thus easier to raise the valuation on the EV business and Ford overall.

Bingo!

 

[Jdc]

Eh, it could work out. Definitely don't think it has "bad" all over it.

This strikes me more of a move for the engineering and development side of the house and less about the manufacturing side.

They are having massive problems retaining software development talent right now (pretty much everyone is, there is a huge industry-wide shortage of software developers/engineers). Software engineers love working for fast-paced startup-style companies. So if Ford can create that feeling within their Model e devision, it has a chance at working. The will allow them to attract young, eager software development & engineering talent using this new fancy new "Model e" thing.

If you don't create that startup feeling and instead if feels like you are working for an old legacy company with miles upon miles of red tape, you're probably going to get a bunch of B tier developers and that will reflect in the products.

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I do think this will trickle down to the dealer side eventually though. The biggest complaint right now (especially in this market) is that dealers are scummy blood-suckers who do not provide a seamless sales experience. So either Ford is going to try to do direct-to-market. Or Ford is going to require dealers to charge MSRP. Or perhaps some combination of the two.

Customers who buy EVs basically want to buy an iPad with wheels, and they want the same sales experience you get when buying an iPad. You don't get that experience today through dealers.

Reminds me of a kid I used to work with. He had two job offers:
Job offer 1: A more established company, offering 5k more than job offer 2. The office was your classic drab cubicle office and they described themselves as NOT having a startup like culture.
Job offer 2: A traditional startup with beer on tap.
He took job #2

 

[MJJ]

This is the start of Ford turning the dealer into a delivery/service outlet. Ford will control pricing and volume through direct orders and will not allow adm’s. That is my prediction.

 

[Fat dog]

I read Ford splitting ICE mountain and the future

 

[flip]

As a dealer, I'm saying

Eh, it could work out. Definitely don't think it has "bad" all over it.

This strikes me more of a move for the engineering and development side of the house and less about the manufacturing side.

They are having massive problems retaining software development talent right now (pretty much everyone is, there is a huge industry-wide shortage of software developers/engineers). Software engineers love working for fast-paced startup-style companies. So if Ford can create that feeling within their Model e devision, it has a chance at working. The will allow them to attract young, eager software development & engineering talent using this new fancy new "Model e" thing.

If you don't create that startup feeling and instead if feels like you are working for an old legacy company with miles upon miles of red tape, you're probably going to get a bunch of B tier developers and that will reflect in the products.

As a dealer, I see this as bad for us and feel it will make the terrible service we get on the service side of the business, worse. I can't explain how much information they dump on us with the expectation we have legions of employees to analyze and absorb it. It's like drinking from a fire hose and we are a medium size dealer with 135 employees. When the split happens, we'll have 2 times the info coming in with the same number of employees, all while still getting the same, or worse service.

It looks good to investors and it helps put Ford at the front of the domestic (big 3) EV business. Being first, IMO, isn't always the best. It just means everyone behind you get's a front row seat of what not to do. I really think this is a way to force some major changes to the dealer body and overall business model, that couldn't have been done under the existing company and dealer agreements.

I might be overreacting but do see a business case to make the split. Most dealers know Ford would love to do direct sales but can't due to franchise agreements and state laws. They just blew up floor plan assistance as part of the huge shift they are making to their business model. Maverick, Bronco, Mach-E are all just tests to see what needs to be changed in order for the direct sales system to work. They are setting up an all on-line transaction system that is essentially controlled by them. They only need us to do paperwork and arrange financing so any state exposure is on us, not them. All of these things are adding up and if that's what their plan is, fine. But at least lay the whole thing out so dealers can figure out what their place will be in their long term plan and decide if they can still make operate based on those changes.

Most dealers will adjust to the changes and some will say, F it. It would just be nice to know ahead of time.

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