CEO Hackett Spells Out Ford Strategy

Ford Motor Co. CEO Jim Hackett says the company intends to cut costs, streamline its operations, speed up decision-making, design simpler vehicles, drop slow-selling models from its lineup and move one-third of its development budget for conventional engines to electrified power systems.

“I feel a real sense of urgency,” he tells a meeting with investors in New York City. Many analysts say he should. They complain that a three-year slide in Ford’s stock price comes from investor perception that the company lacks focus. Hackett replaced Mark Fields as CEO in May.

Hackett aims to cut annual costs by $14 billion over the next five years. He says $4 billion will come by compressing the product development process, and $10 billion will result from reducing materials and component costs.

Ford also will move $7 billion in product development spending from cars to more popular (and profitable) SUV/crossover vehicles and pickup trucks. Such moves are intended to buttress Ford’s profitability as it hikes spending on future technologies such as electrification, autonomous driving and connectivity.

To help spur innovation, Hackett says Ford will pursue more partnerships, alliances and joint ventures.