Ford Makes Push Away From Cars To SUVs, Trucks

(UPDATED) DEARBORN, MI — Ford Motor Co. is embarking on an ambitious plan to reduce operating costs, accelerate the introduction of connected smart vehicles, and shift $7 billion away from cars to the development of trucks and SUVs, the Dearborn automaker announced Tuesday.

Ford will also embrace partnerships, such as the one announced last week with Lyft. CEO Jim Hackett said the overall goal is to improve the company’s “fitness” and ability to thrive into the future.

“Ford was built on the belief that freedom of movement drives human progress,” Hackett said in a statement. He became Ford president and CEO on May 22. “It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing smart vehicles for a smart world that help people move more safely, confidently and freely.”

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By 2019, 100 percent of Ford’s new U.S. vehicles will be built with connectivity. The company has similarly aggressive plans for China and other markets, as 90 percent of Ford’s new global vehicles will feature connectivity by 2020, Ford said in a news release.

Hackett said Ford is going to attack costs. The company will do that by slicing $10 billion in “incremental material cost reductions,” Ford said.

Reducing engineering costs by $4 billion over the next five years is also planned. Ford says it will do that by increasing use of common parts across its full line of vehicles, reducing order complexity and building fewer prototypes.

Shifting capital away from car development into where “Ford can win the future” is another strategy. That means models like the Ranger small truck, EcoSport in North America and the all-new Bronco globally are in the company’s plans.

Signaling its commitment to “electrification,” Ford will reduce internal combustion engine capital expenditures by one-third. Those savings will go to help Ford deliver on its earlier commitment of brining 13 new electric vehicles to market in the next five years, including F-150 Hybrid, Mustang Hybrid, Transit Custom plug-in hybrid, an autonomous vehicle hybrid, Ford Police Responder Hybrid Sedan, and a fully electric small SUV.

“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally,” Hackett said. “Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”

Photo by Kelly Sullivan / Stringer / Getty Images News / Getty Images