Jim Hackett, the chief executive at Ford Motor Co, said that he was reviewing the decision of the automaker to enter markets like India. He also said that he was looking at future product programs at Ford, including a plan to construct a self-driving commercial vehicle by 2021. This is all according to company officials as well as other sources who are familiar with the review.
Review
Hackett, who has been CEO of the company since May, spoke with investors telling them that he is going through a 100-day review of the operations of Ford, but didn't provide any details about the process that he was going through. The only thing he did was to indicate that he was looking at the automaker's strategy when it comes to luxury vehicles, the future of small vehicles, and its investments in various emerging markets.
He is doing what a CEO should do. No market should be taken for granted. Just because Ford is able to be successful in one market does not mean they will be successful in other markets. Some markets may not make sense for Ford to be in and if Ford makes amazing products, it is not really Ford’s loss they cannot be in a certain market and is perhaps that market’s loss just as much, if not more.
Perhaps that government or public should make some changes to help bring more competition into the fray, for instance.
Issues
Bob Shanks, the CFO at Ford, said the review was going to cover a number of issues including the strategy Ford was planning to adopt in India. He said that they have a ton of work to do if they are to address the issues in India. He also said that everything was now going to be on the table.
In May, General Motors said that it was going to stop selling in India while still producing its larger cars there in order to export them. Shanks said that Ford had not arrived at any decisions as yet, but did mention that they have a much larger business in India as compared to GM – you know, the company that received a bailout and still owes America billions of dollars.
He said that they were well aware of the fact that India is the third largest car market in the world too. He said that there were big decisions to be made and he cautioned that Ford may also not disclose all of the decisions when the review is up.
Challenges
Hackett is addressing a number of challenges which have contributed to an almost 8 percent decline in the price of Ford shares over 2016. The review will also include a look at the luxury brand Lincoln which may or may not be able to meet the ambitious targets set for it by ex-CEO Mark Fields.
Ford has set fresh targets for putting self-driving shuttles into commercial sharing fleets by the year 2021. Hackett is going to be reviewing this investment and the timing for the project according to sources.
Hackett will assess if he is to consolidate and reduce the production of models like the Fiesta subcompact and a couple of other mid-sized sedans which were being built in various parts of the world but don't have much demand.
Proposal
One proposal from him is to shift the production of the next-generation Ford Mondeo to Mexico from Europe. Here, it's going to share an assembly line with the Ford Fusion, its sibling, which would mean avoiding the cost of retooling another plant.
Shortly after taking charge, Hackett had approved a proposal for shifting the production of the next-generation Ford Focus to China from Mexico. This would save the company around $500 million since it would be consolidating multiple factories into a single one.
Hackett is supposed to be questioning the plan to build at least 6 future models including replacements for the Lincoln Continental, Ford Explorer, and Mustang on a flexible platform which is designed to accommodate both rear and front wheel drives.
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