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Ford Retunes Automotive Operations

A familiar call to improve the company’s performance
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Ford’s latest stab at streamlining its automotive unit unveils structural changes and appoints a bunch of new leaders.

“We are moving with a renewed sense of urgency,” declares Jim Farley, who was named chief operating officer in February.

Farley says the staffing shuffle aims to “modernize” Ford, streamline operations, take the bumps out of new product launches, lower costs, improve quality, and capitalize on big data, connectivity and artificial intelligence.

Familiar Tune

These are pretty much the same objectives described 30 months ago by then-new CEO Jim Hackett. In late 2017, he unveiled a five-year, $14 billion cost-cutting plan, now called Creating Tomorrow Together.

At the time, Hackett told investors, “I feel a real sense of urgency.”

No surprise there. Hackett, you may recall, was installed in May 2017 to replace Mark Fields. Grumpy investors (and some of Ford’s own board members) complained that Fields hadn’t moved fast enough during his three years as CEO to transform Ford from carmaker to mobility provider.

Since Hackett’s arrival, the company has implemented three major management changes (in 2017, again in 2018 and once more two months ago). Ford also has conducted several rounds of staff cuts, lined up a major partnership with Volkswagen and restructured its electric car and autonomous vehicle operations.

But investors remain skeptical. Since Hackett’s original announcement, Ford’s stock price has steadily skidded from around $12 to about $5.

Farley’s Team

Farley’s staff changes, which take effect on May 1, will expand the duties of two executives:

  • Kumar Galhotra will become president of the Americas and International Markets Group, overseeing profit and loss results for North America, South America and other international units. He also will be responsible for commercial vehicle operations in the U.S. and Canada.
  • Lyle Watters will broaden his nearly 4-year-old role as president of South America and the International Markets Group. Watters will continue to report to Galhotra.

Two more leaders are stepping into newly created roles:

  • Lisa Drake has been named chief operating officer for North America, also reporting to Galhotra. She also will continue as vice president of global purchasing. Her mission will be to restore a 10% pretax earnings margin for North American operations through smoother new product launches, reduced warranty costs and lower materials costs.
  • Ted Cannis, will become general manager of commercial vehicles in the U.S. and Canada. His assignment is to further optimize those operations with an eye toward “potential partners” (coincidentally, last year Ford and Volkswagen agreed to partner on the design and production of commercial vans and midsize pickup trucks). Cannis also will lead efforts to create tools that help Ford’s commercial vehicle customers enhance their own businesses.

Separately, Ford has hired Gil Gur Arie, a retired colonel from the Israeli Military Intelligence Corps, to be the carmaker’s head of global data insight and analytics. Gur Arie, who will report to Farley, will help Ford use artificial intelligence, human-machine interfaces and large scale analytics to make better decisions.

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