Exec: Ford brand will carry company in future
Ford Motor Co. is leaning on experience amid calls for a clear path to the future of the auto industry.
Joe Hinrichs, Ford president of global operations, told Goldman Sachs analysts Tuesday in Boston that the Blue Oval’s history will drive the company forward as it expands into electrification, autonomous vehicles and other new mobility fields. The comments come as CEO Jim Hackett outlines plans to cut $14 billion in costs over the next five years and change the Dearborn-based company to drive up value.
It was the third time in two weeks that a Ford executive has pointed to the company nameplate as a driving force into a future where traditional automakers will compete in electrification, autonomous driving technology and mobility services like ride-sharing and shuttle services.
“Ford will be part of the solution of the future of transportation mobility challenges,” Hinrichs, said when asked why someone should buy Ford stock today. “We’re going to be part of that solution as we have been for 114 years. And we have capabilities and experiences that matter in this business. We’re going to be a successful part of that plan.”
Hinrichs told investors that consumer confidence in the Ford brand will add value in the future, though he offered no new information on the company’s plan under its new CEO. Hackett and Executive Chairman Bill Ford Jr. have done the same at recent talks in Detroit.
Ford’s pickups will continue to drive profits amid tougher competition over the next year, he said. The company was ahead of Fiat Chrysler Automobiles NV and General Motors Co. in redesigning or refreshing its leading F-Series over the last three years, which has set it up for lucrative sales as consumers opt for the bigger trucks.
Ford’s competitors are expected to release new models of the Silverado and Ram trucks for the 2019 model year. By then, Ford’s refreshed aluminum-body 2018 F-150 will have been out for roughly a year.
The company is expecting a stronger balance sheet from cost cuts, which will add to the pile of cash Ford’s currently sitting on. Hinrichs also said he’s not expecting Ford to take on costs due to “footprint” reductions, which would come out of plant closures or buyouts, as a result of the cost cuts under Hackett.
The company is cutting costs from its supply base, and through redesigned business models, he said. That money will act as a buffer from what Hinrichs expect will be increased costs for its electric and autonomous vehicle development.
There, Ford’s experience will push it forward despite the fact that Ford hasn’t made much money on its hybrid vehicles to-date.
“We’re very bullish on electrification,” Hinrichs said. “We want to time it where we think consumers and the technology are ready together so there’s a business model that can work.
“We’re very open to collaborations and partnerships in this area. (But) how that vehicle feels, how it performs, how it sounds are all pretty important parts of all this. We believe that we’ve learned a lot. The Ford brand matters. People trust the Blue Oval, and they trust that if we’re going to bring something to market and we’re going to launch it. ... It’s going to work.”
Ford has had a number of expensive recalls recently, but Hinrichs said Ford’s build quality is currently the best it’s ever been.