Why Ford Is Replacing Three-Quarters of its Line-Up

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Ford hybrid vehicles

Ford CEO Jim Hackett has pulled the curtain back on his grand strategy for the iconic American automaker.

Among is goals—for Ford to sell more hybrid vehicles than industry leader Toyota within a couple of years; to turn over about 75% of its product line within the next few years; and for new trucks and SUVs to fuel a comeback and finance its progress into the era of autonomous vehicles.

And, as he told reporters, “We’re just going to run the company better.” In fact, streamlining its workforce and costs are part of what Hackett is counting on to help Ford make it back to its long-term 8% goal for profitability. But the most exciting aspects of his plan from a customer perspective are its new vehicles and innovation investments.

Sustainability Investments

Part of Ford’s new strategy includes going all-in on hybrids to bring more capability to customers of our most popular and high-volume vehicles like F-150, Mustang, Explorer, Escape and Bronco—and serve as a hedge for customers against higher gas prices.

Ford plans to to amplify its “unsung” presence in hybrids by surpassing Toyota in segment sales by 2021, in part by putting battery power in its most popular vehicles—including the F-150 pickup truck, the Mustang performance car and Explorer SUV—instead of segregating them in separate nameplates, the strategy that Toyota first pursued with its groundbreaking Prius.

“We’re moving past hybrids as a science project,” Jim Farley, president of global markets, commented. “It’s become an accepted, reliable technology and we’re going to make it as desirable as an EcoBoost engine,” he said, referring to Ford’s engines that have enabled it to provide as much horsepower as earlier, larger engines but with significantly enhanced fuel economy.

New Models

Ford plans to drive SUV growth with two all-new off-road models: the new Bronco and in 2020, a yet-to-be-named off-road small electric utility, both designed to win a growing number of people who love getting away and spending time outdoors with their families and friends. The electric SUV will be “Mustang-inspired” and capable of 300 miles on a charge to better compete with Tesla and the German makes in sports vehicles.

Ford’s truck business will continue growing as the company adds new models and powertrains with an eye toward continued growth in high-end trims. Some highlights include: a new 3.0-liter Power Stroke diesel engine for F-150 and updated version of the popular F-150 Raptor in 2018; the return of Ranger to the midsize truck segment and the debut of a new F-Series Super Duty in 2019; and a new F-150 with new hybrid powertrain featuring a mobile generator in 2020.

Ford also plans to grow its lineup of performance SUVs. Two additions to the Ford Performance lineup include the all-new Edge ST later this year, and an Explorer ST will soon follow.

Overall, Ford said it will have the industry’s freshest lineup by 2020, with an average vehicle age of 3.3 years, down from almost 6 years today. Among them will be four new SUV models, for a total of eight utility vehicles in Ford’s showrooms by 2020. They will include a vehicle that will resuscitate the iconic Bronco nameplate as well as a new mid-sized pickup truck that will bring back the Ranger moniker.

A Fresh Start

Ford recently overhauled its full-size Expedition and Lincoln Navigator and introduced a new, compact crossover, EcoSport. It has a new Explorer and Escape in the pipeline and a high-performance Explorer ST. “Trucks and SUVs are going to fuel our growth and profitability,” accounting for almost 90% of Ford’s sales volume by 2020, Farley said.

A decade ago such a thought would have been unutterable. Ford did a great job of overhauling its sedan fleet back then into a fuel-efficient force that stood the company well through the spike in gasoline prices late last decade.

But since then, Ford has seen other automakers take advantage of the shift by American consumers to SUVs, although the F-150 remains America’s most popular vehicle.

The company also has had to fight through a late start in moving into autonomous-vehicle programs and technologies, the exit of Hackett’s predecessor as CEO less than a year ago, and the departure of its North American chief in February after misconduct allegations.

Advanced Manufacturing

The automaker is increasing its use of augmented and virtual reality to  help make its operations more efficient and reduce its plant changeover time by an estimated 25 percent, which adds an average $50 million to the company’s bottom line per changeover.

Simulating various production processes and assembly line configurations in the virtual world helps identify potentially hazardous maneuvers and fine-tune workflows before construction even begins, saving an estimated 20 percent of tooling cost on each vehicle program.

The company also is increasing its use of collaborative robots that can perform jobs quickly and repetitively, helping reduce the risk of injury to employees, freeing them up for more high-value jobs and improving the company’s bottom line.

“We’re looking at every part of our business, making it more fit and ensuring that every action we take is driven by what will serve our customers in a way that supports our fitness and performance goals,” said Joe Hinrichs, president, Global Operations.

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