Ford plans $14B in cost cuts as part of new CEO's strategy

How Ford Will Join the Electric-Car Revolution

Looking to the future, Ford has established a dedicated electrification team that will develop and launch more than a dozen new electric vehicles. The automaker will also speed up the development of vehicles by around 20 percent via new tools such as virtual reality and big data.

Overall, financial analysts suggested that Hackett's lack of details on future products might delay reactions by Wall Street to Ford's plans, which were intended in part to boost its lagging stock price and market value. "In the interim, Ford is fixated on improving efficiency and 'fitness.' It's early in the turnaround but we believe Ford is on a focused and improved track".

Electric vehicles will mean auto factories can have a final assembly area that is half the size, requires half the capital investment and 30 percent fewer labor hours per car.

Most of those savings will not show up on Ford's bottom line until 2019 and 2020, Hackett and other Ford executives said, reflecting the industry's long product engineering lead times. Ford recently partnered with India's Mahindra Group and China's Zoyte to develop new range of low-priced all-electric vehicles. It comes at a time when Ford is pushing its mobility solutions, but still lags behind rivals such as General Motors in terms of autonomous technologies, partnerships and electric vehicle development.

Couple Describe Witnessing Las Vegas Shooting
But they are not enough. "In the interim, thousands more have been lost to the daily, ruthless toll of gun violence". Richard Blumenthal said the Las Vegas shooting shows that, "the time for hand-wringing and soul-searching is over".

"We see an inflection point in the major markets toward battery electric vehicles", Sherif Marakby, Ford's head of electrification and autonomous vehicles, told Martinez.

Ford reiterated its long-term goal remains an 8% automotive operating margin, adding it will embrace the "profound technological changes" and new competition "buffeting the industry".

Ford will also use the group to create partnerships with other companies including suppliers to accelerate its move towards electrification.

Given this latest development, I think it's clear that Ford shareholders can expect Hackett to address both issues in his presentation on Tuesday. In his first deliberate overhaul since being assigned as the CEO Hackett tried to equipoise keenness for the future with solemn evaluation of the disconcerting trials Ford faces today. It did not say it would exit any vehicle segments, but rather that would continue in a more focused, reduced manner. "That's why nobody internally talks about "One Ford" (in those markets) anymore", said one of the insiders, who are familiar with Ford's Chinese strategy. Ford earned $1.76 per share 2016. The Motley Fool has a disclosure policy.

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