Ford's incoming COO focuses on cost cuts, launches, change (updated)

CIE Automotive India

26/02/2020 13:29

(Adds executive comments from conference, adds byline)
    By Ben Klayman
    DETROIT, Feb 26 (Reuters) - Ford Motor Co's  F.N  incoming
chief operating officer outlined his priorities for the
company's turnaround on Wednesday, including cost cuts and more
efficient new-vehicle launches in a year in which it will
introduce a redesigned F-150 full-sized pickup truck. 
     Other key plans include speeding up Ford's push in vehicle
connectivity and its commercial vehicle business, strategy chief
Jim Farley, who begins his role as Ford COO on March 1 after
being appointed earlier this month, said at a Wolfe Research
conference in New York. 
    "We have to fix a number of things," he told investors,
citing a need to cut $5 billion in warranty costs, successfully
launch 10 key global vehicles in the next two years, and slash
material and logistics costs.  
    Ford has acknowledged that mistakes proved costly in its
introduction of the redesigned Explorer SUV.  
    Electric carmaker Tesla Inc  TSLA.O  has shown how connected
vehicles and over-the-air updates can build customer loyalty,
Farley said, and Ford could better profit from the data
generated in vehicles and improve its customer service.
    Ford also will focus more heavily on advantages in
commercial vehicle sales. 
    "This is the signature execution opportunity for Ford and
growth opportunity for Ford," Farley said.        
    He also cited a focus on growing the electric vehicle
business of the No. 2 U.S. automaker. 
    The Dearborn, Michigan-based company named Farley its COO on
Feb. 7, and promised investors it would kick a slow-moving
turnaround into higher gear.  urn:newsml:reuters.com:*:nL1N2A70KL 
    On Tuesday, shares hit their lowest in more than a decade as
a rapidly escalating coronavirus epidemic that began in China
threatened sales outside the United States.
 urn:newsml:reuters.com:*:nL4N2AP12N urn:newsml:reuters.com:*:nL1N2AP0I4
    Ford is restructuring globally and faces slumping demand in
China, its second-largest market. Chief Executive Jim Hackett
has said the No. 2 U.S. automaker needs to move with greater
speed.
    It has booked $3.7 billion of a projected $11 billion in
charges it previously said it would take, and expects to book
another $900 million to $1.4 billion this year.
    As part of its restructuring, Ford formed a wide-ranging
alliance on commercial, electric and autonomous vehicles with
Volkswagen AG  VOWG_p.DE  and sold its money-losing operations
in India to a venture controlled by India's Mahindra & Mahindra.
 MAHN.NS 
    In China, Ford lost $771 million last year, about half the
2018 loss, and its market share there has shrunk. Ford has been
struggling to revive sales since its business began slumping in
late 2017, and prospects look more cloudy now that the world's
largest market has been hit by a fast-spreading coronavirus.

 (Reporting by Ben Klayman; Editing by Bernadette Baum)
 ((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))