Exclusive: the future of Ford, according to its bosses

“I just couldn’t believe how good these new cars were. They could do things you’d never do in an ICE [internal combustion-engined] car. They were just better.” 

Such passion from Palmer, a tall, fast-talking Englishman who has spent much of his 28-year Ford career on the fast-track, is all the more powerful for the fact that this is the man who delivered Ford’s much-loved Fiesta ST200, a skunkworks pocket-rocket universally admired. He also delivered the Mustang to Europe, proudly watching it become the world’s best-selling sports car. He’s a car lover since childhood, so when he starts talking about this new strain of EVs being “sexy and emotional”, you need to listen. 

The big plan, first publicised by Ford around 18 months ago and expanded since, is to spend $11 billion on a cycle of exciting EVs beginning next year. Under the deal recently agreed with Volkswagen, Fords built on the MEB platform will kick in from 2023. The flow will start next year with a ‘Mustang-based crossover’. The name Mach One was floated early on, although it has since emerged that it will be called the Mach E. A battery Ford F150 will come before 2022, says Palmer, and a fully electric Ford Transit. Palmer won’t confirm that a Ford Ranger or Bronco (the famous compact 4x4 that’s returning with conventional power after disappearing in the mid-1990s) are in the BEV mix, but he doesn’t deny it either. 

“We’re hitting our biggest icons first,” he says, “but we have more. And we’ll keep working through them.” Meanwhile, starting now, Ford is launching a new or renewed supporting range of smaller plug-in hybrids, first being the Escape SUV (our Kuga) with a larger Explorer not far behind, although it isn’t currently planned for the UK. 

Project Edison grew out of an earlier plan to build a second generation of the decent but dull economy BEVs, such as a second-generation electric Focus. But the decision to stop making saloons in the US, along with a realisation that the way to sell new BEVs at a profit was to build exciting cars closely related to existing icons, brought a new philosophy. “We decided very carefully where we’d play in the electric car market, and that every one would amplify the characteristics of the model it was based on. Each one had to be extremely desirable, but at an attainable price,” says Palmer. 

“These cars won’t necessarily be cheap, but they’ll be gotta-have-it models, sold at a price we judge is attainable for our existing customers. They’re our focus. Ford has always democratised technology and this will be more of the same. But early adopters of BEVs have a lot to deal with, so Project Edison is working on every aspect of ownership, from the minute someone considers an electric car, through the whole web experience to buying, owning, using and charging.” 

On keeping costs under control – already a proven BEV bugbear – Palmer acknowledges challenges but has answers. “We’ve planned the entire portfolio in one go,” he says. “We’ve selected a common battery cell for our BEVs and set up long-term, large-scale relationships with suppliers, because 75% of a battery’s cost is raw materials. 

“It’s vital that every BEV is profitable because that means you can sell as many as customers want. If they’re not profitable you hold them back: why do you think so many of today’s electrics are subject to year-long waiting lists? We’ll launch, and we won’t lose money. That’s what will make our cars mainstream.” 

BEV range, Palmer admits, is something customers obsess about. Decent range hasn’t been generally available up to now, partly because of poor battery density, partly because of cost. But these things are improving, even if progress is slowed by rising demand. “A car’s range in miles begins with a 1, 2 or 3,” says Palmer. “Our research shows that when it’s a 3 anxiety drops away fast. A 300-plus capability is something we’re aiming at.” 

It’s clear Palmer could continue his rapid-fire advocacy of electric cars indefinitely, except that he has at least 100 other things to do against a punishing timetable. (He explains, for instance, how an Edison-led team recently produced a completely new infotainment system for the Mustang-based CUV in just 90 days, from plan to final hardware.) So we content ourselves with asking him to characterise the importance of the current era of car creation. 

“It’s the greatest change and opportunity in the auto industry in 30 years,” he says, “and probably a lot longer. Today’s performance BEV isn’t just about the electric motor. It’s about software, surprises, over-the-air updates, cleverness, the fact it can learn and anticipate what you want, and makes your life better. It’s an entirely new kind of product. Those who try it will never go back.”

Joe Hinrichs: living in the present 

While others have their heads in the future, Ford’s automotive president, Joe Hinrichs, has his eyes fixed on current markets, products and performance. It’s all very well dreaming up a fabulous future, but that’s only affordable if you keep today’s market percolating. Which means turning profits from what you have, and making great near-term improvements. 

For somebody with ultimate charge of all aspects of the business – design, manufacturing, purchasing, product development, quality – Hinrichs cuts a remarkably jaunty figure in his white Ford Performance shirt (“we’re all on the same team, maybe it helps if I dress accordingly”). He’s also the guy who regularly sends live, how-we’re-doing webcasts around the Ford empire, and he has just the right manner for those. 

Ford Performance is close to Hinrichs’ heart. He owns several GTs of different ages, several Mustangs of different power levels, an F150 Raptor and an old Bronco. It’s fun, a description he also frequently applies to the car business. That’s understandable: recent margins have been strong in the US, even if in Europe and South America they’ve been hit by costs from a “fundamental redesign of the business” during what president Hinrichs oversees the whole business: “We’re all on the same team” Jim Hackett labels “this key year of action”. 

Hinrichs says Ford Performance has yet to reach its full potential, given that models like the Focus ST and Raptor would have happened anyway. The division was created, he explains, to connect Ford’s fast car production with its motorsport. The two organisations are bigger and more influential, and that part has worked. But there’s more to do. 

Will there be an all-new Focus RS? A new one normally appears after the mid-life refresh of a cooking Focus. This time there’s a lot to think about, says Hinrichs. “The world is changing, and we have new powertrain options.” I ask if that means hybridisation but Hinrichs widens this to “electrification”, which makes me think. They wouldn’t launch a Focus RS BEV, would they? Hinrichs changes the subject. 

One marketing challenge he sees is getting buyers – both in the US and Europe – to view Ford’s burgeoning selection of hybrid cars as normal models. “The Prius set the standard,” he says, “by being marketed as a different kind of vehicle. But the job now is to get consumers to see hybridisation as tried and tested technology, not a science project but the vehicle they love with a more efficient powertrain.

Stuart Rowley: Euro chief speaks 

Ford’s top man in Europe, Stuart Rowley, loses no time in acknowledging that the Blue Oval needs a serious, long-term boost on this side of the pond. A Ford of Britain recruit of 30 years’ standing who has worked in most of the company’s key global operations, Rowley was drafted back to the UK last October “to help right the ship” after a bout of serious losses. That must have gone well: this April he was appointed FoE president, charged with reorganising the business in ways that had worked in the US but not been tried here before. 

Righting the ship involved rapid, headline-grabbing stuff like quitting most of the Russian manufacturing business and closing the Bridgend engine plant, and the giant Ford of Britain office building in Warley, Essex, was put up for sale. Much of that has been achieved or at least agreed, and recent business has been healthier for it. Now it’s time for the business reorganisation to show its potential in volumes and profits. 

“A while ago we laid out 20 years of the company’s business history,” says Rowley, “and it was amazingly instructive. It showed that while we’d had good years and bad, our market share had stayed reasonably stable. But we’d only been marginally profitable, not even returning the cost of our capital. This isn’t acceptable for a $30bn business, especially as conditions get tougher and electrification beckons. We needed a different strategy, a different operating model.” 

The plan was simple: split the business three ways, into a thriving commercials operation (Ford is Europe’s market leader with a 30% share), a passenger car business (Ford has the first and second UK best sellers but earnings are low) and a small, lively import operation (Mustang is the huge success, but Ford has big plans for the Explorer, for next year’s Mustang-influenced EV crossover, and probably for the renewed Bronco 4x4). 

That’s just part of it. Rowley is also separating the company on product lines, finding keen young general managers to be advocates of every product. “If we separated our Ranger business out, it’d be big enough to make the FTSE 250,” he says. “As a young employee, how’d you like to be given charge of a business like that?” 

This approach involves ‘de-aggregation’ – a term Rowley uses a lot. Instead of looking at, say, Focus sales as a whole, you study the performance of individual versions – for example, Titanium, Vignale, ST, estate – in individual markets, noting how and where they sell, and emphasising the successful, profitable models. In Rowley’s twin HQs, Merkenich (Germany) and Dunton (UK), there are now model-specific rooms with their own teams working to boost individual models. “The job is to drive gross margins,” he says. “I spend time every week with every team, just seeing how I can help. I like to be hands-on.” 

Rowley says de-aggregating is giving a more realistic view of the saloon market, which still yields decent volume but isn’t a big earner. “It’s difficult to make money because there are lots of players and lots of capacity,” he says. “That’s the backdrop. The D-segment has fallen to nothing, the C/D-segment is tiny, and though they’re still big, the C and B-segments are shrinking too. 

“The growth in passenger cars is in the small utility segment (our Kuga) and mini utility (our Ford Ecosport). But we have more to do. If I were to critique Ford in Europe, I’d say we were late to too many parties and stayed too long after they’d finished. Our new Puma – great looking, practical and cost-effective to design and sell – is part of the answer. It leverages our strengths and history.” 

Does all this change threaten Ford’s leading position in Britain, unbroken since the Transit’s arrival in 1965 and the Ford Fiesta’s in 1976? Rowley says not: “We may not be number one OEM here, but we’re number one brand and that feels right. It’s far too big to give up; Ford will never be a niche player. But we’ve got to be smarter. What portfolio will we need to keep winning in the second half of the 2020s? That’s what we’re planning right now.” 

Parts of that plan are already clear. Ford will build 600,000 EVs on new partner VW’s MEB platform over six years from 2023. (“Wouldn’t it be great,” he says, “if our MEB car was the best of the lot?”). And FoE is working on a compact SUV for the mid-2020s, a project initially called ‘C Puma’ until Rowley changed it. “If we use that name, we’ll do another Puma in four years’ time,” he says. “It might not be relevant. Let’s put more time into understanding what our customers need by then.” 

Bill Ford: check the hubcaps… 

Bill Ford knows plenty of specific Ford facts but he doesn’t use them in interviews. After 20 years as chairman of the car company his great-grandfather founded 116 years ago and 40 years as an employee, the 62-year-old learned long ago that the most important job “the guy with his name on the hubcaps” could do was to keep his eye on the big picture and nudge the company into new directions when necessary. 

This he started early. Not long after he joined the company, this great-grandson of both Henry Ford and Harvey Firestone astonished industry lifers by taking a serious view of green issues, encouraging and supporting research into biofuel and hydrogen models, among other things. In his own words he was “branded a bit of a heretic”. Speaking in London a year after he became chairman, he reckoned the day was coming when Ford would embrace car sharing. Soon afterwards, he persuaded the company to convert Ford’s historic River Rouge assembly plant to green operation. Then in 2011, as part of a TED talk, he outlined many initiatives the industry is enacting today. 

“My opinion was that the business models we were using back then weren’t going to work much longer, but that the industry wasn’t prepared for it, or even aware,” he says. “Since then we’ve seen a huge transition, and it’s all coming to pass now. This is absolutely the most interesting time in my 40 years with the company. I just wish I was 20 again, because of what’s happening.” 

Happily for Mustang owners, Ford’s optimism extends to the future of sports cars, which he unashamedly loves owning and driving (he’s understood to have several dozen ’Stangs) and has passed to his children: “Some people choose to see a kind of dystopian future, full of self-driving cars with no human input. I prefer to see an era of ultimate choice. For a long time yet we’re going to live in a kind of dual world, full of cars and trucks much as we know them now, but with self-driving vehicles being built as well. Eventually things will change completely.” 

As part of his role as a thought-leader, Bill Ford sees bringing other thought-leaders to the company as part of his role. He found and hired the distinguished ex-Boeing CEO Alan Mulally for an eight-year term that produced the ‘One Ford’ philosophy, helping carry the company through the global recession of 2008-2010 as the only Big Three company to avoid bankruptcy and a government bail-out. 

Jim Hackett, the latest Bill Ford appointee to the president/CEO’s position, has brought extreme customer focus to the Blue Oval since 2017, probably because that is Bill Ford’s mantra as well: “One Ford standardised everything,” he says. “It did a lot of good, but maybe it went a bit too far. One size doesn’t fit all. 

“So recently we’ve gone for more customisation, keeping the customer’s requirements at the centre of everything. It’s easy to fall in love with technology and give people stuff they don’t need or even understand. You’ve got to ask: are we making things easier, better, more fun? Are we putting time back into their lives? If the answer is no, we probably shouldn’t be doing it.” 

For now, Bill Ford believes Ford’s concentration should be on new-era powertrains and flexible platforms. It’s not so important that Americans still overwhelmingly prefer trucks and big SUVs, with their weight and aero penalties. “Silhouettes can change as time goes on,” he says. “They’re the easiest bits. Our Mustang-based sports car for 2020 is already showing the future. Some people think electrification means no driving fun, but that couldn’t be further from the truth.” 

He refers to lingering suggestions of an FCA-Renault-Nissan merger as evidence that such news is “a harbinger of things to come”, although he points to his own company’s recent co-operative deal with VW over commercials, trucks and electric vehicles – which involves no ownership changes – as Ford’s preferred way. “We’re likely to be opportunistic because we’re in a good place at the moment,” he says. “We’re investing wisely for the future, our current range is strong and our production cadence is picking up. We’re about to have one of the strongest showrooms in the industry, although we’re still very much open for tactical co-operation.” 

As an implacable supporter of Detroit through every one of its difficult years, Bill Ford is hugely popular wherever he goes. He is famously modest while being well aware of the importance his family’s heritage has to the 116-year-old marque. “People know we’re not just a faceless corporation,” he says. “We’re accountable. I’m not going anywhere. People know how to find me, and that goes for dealers, employees, customers, everybody. This my life. I’m working for my children and my grandchildren, and I hope they’ll continue.” 

Bill Ford’s personal standing has taken a further boost over the past two years, since his epic decision to acquire the decaying but hugely imposing Michigan Central Station complex and convert it to a mobility campus for 2500 Ford employees and as many others from universities, tech partners, retailers and the public. 

“I used to drive past that place every day,” says Ford. “I hated it. It was the poster child for the decay of Detroit, constantly being used as a way of illustrating America’s most troubled city. Two years ago I started wondering if we really could find a role for it. I started talking about the idea internally, we put a plan together and the whole thing came together pretty quickly. 

“The outpouring of emotion from people all over south Michigan has been amazing. It signals that Detroit really is on its way back. They know this is much more than just the restoration of a beautiful building, which would have been cool in itself. But now they know this is where we’re going to invent the future of mobility, and that’s really special.”

The five-platform strategy 

What could you do with £21 billion? Plenty, we’d wager, given that it’s enough to sustain a small country or deliver a giant boost to a major global automotive group. It’s the amount Ford expects to save in the once-in-a-generation operational overhaul it began earlier this year, destined to continue into the mid-2020s. 

This latest reorganisation is led by Jim Farley (new businesses, technology and strategy president), Hau Thai-Tang (global head of product development and purchasing) and Kemal Curic (chief designer), who explained it in an exclusive meeting with Autocar in one of Dearborn’s inner design sanctums. Two of the three men are well known on our side of the Atlantic: Farley because he was Ford’s European chief for several years, Thai-Tang because in the early 1990s he was a Newman-Haas IndyCar race engineer who worked with Nigel Mansell and Mario Andretti. Later at Ford he was chief engineer of the 2005 Mustang. 

Their changes began with a ruthless editing of the kinds of vehicles Ford builds. While insisting it won’t reduce its total number of models or duck important price points, Ford shocked the industry by ditching saloons in the US on grounds that they just weren’t profitable. 

“We want to compete where we have the most confidence,” says Farley. “Our aim is to produce incredible vehicles that are also affordable and we’ll choose our ground to do that.” 

The second bombshell is migrating its entire portfolio onto just five ‘flexible architectures’, most of which are already in production or close to it. In the early 2000s, before Alan Mulally’s ‘One Ford’ reign, the company had an astonishing 30 platforms, which Mulally reduced to nine. Now the number is almost halved again, and that move delivers a large slice of the projected savings. 

“We learned a lot from Jim’s time in Europe,” says Thai-Tang, “including just how competitive the business had become and how the emotive qualities of cars are valued by customers just as much as the rational. That has helped us position most of which are already in production or close to it. In the early 2000s, before Alan Mulally’s ‘One Ford’ reign, the company had an astonishing 30 platforms, which Mulally reduced to nine. Now the number is almost halved again, and that move delivers a large slice of the projected savings. says Thai-Tang, “including just how competitive the business had become and how the emotive qualities of cars are valued by customers just as much as the rational. That has helped us position our GT ‘halo’ car with models like the Mustang Shelby GT500 we’re just launching. It has helped us leverage Raptor – we’re using that with Ranger now – along with our ST models, Fiesta and Focus, Explorer and Edge.” Might ST extend to the new Puma, we ask? “That would seem a good place to look, but we’ve not decided,” he says. “ We’re very objective about measuring the performance uplift of ST models because they have to be credible.”

Streamlined and standardised 

Thai-Tang believes the reorganisation offers ‘streamlined development’, and the graduation to five architectures is a big part of that. They are: 

â–  A unitary design for transverse front- or all-wheel-drive applications, already used in the latest European Focus and likely to be adopted for all other C-segment Fords. 

â–  A unitary body for rear- or all-wheel-drive models, already used in the new Explorer SUV and likely to be adopted in other rear-drive models. The next-generation Mustang seems an obvious target, but there’s no confirmation. Farley and Thai-Tang insist they don’t want any ‘orphan’ architectures. 

â–  A body for Transit-style commercials, whose specifics are still under discussion following the recent cooperative agreement with Volkswagen that embraces commercial vehicles. 

â–  A body-on-frame design for rear or all-wheel-drive models, already used in the latest F150. 

â–  A unitary body specifically for battery-electric vehicles, presumably embracing the Mustang-influenced crossover for 2020. It’ll be a Ford design rather than the VW MEB platform on which Ford of Europe has just agreed to build 600,000 cars over six years from 2023. Curic says this platform will give designers new freedom in space usage because of its body proportions.

Cost cutting and connectivity 

Around 30% of a car’s build cost goes into its architecture, explains Thai-Tang, while 40% goes into the ‘top hat’. He admits Ford hasn’t been as efficient with top hats as it could have been, often designing powertrain, HVAC systems, seating and infotainment systems on a model-by-model basis, introducing needless cost and complexity. 

Thai-Tang says 80% of the projected £21m will be saved by changes to product development, purchasing and manufacturing. Some of the money will be used simply to make models more affordable against hot competition, and more to slice about a fifth off the average time it takes to develop one. He says Ford has been guilty of “too many programme deferrals” in the past: the new strategy will cut the average age of models from 6.7 years at the beginning of this year to 3.3 years by next year. “Selling cars is like selling fish,” he jokes. “Fresher is better.” 

Ford’s experts are convinced the forthcoming new levels of connectivity will prove “the new canvas” for car customers, not just in the safety and convenience areas we know but with features that will positively excite buyers – ‘my car can be a personal update for my devices’. It will also improve business for commercial vehicle customers. “Imagine if every van is connected to Ford so its condition is always known and breakdowns need never happen,” says Farley. 

Selecting a powertrain solution

Deciding which of the three main propulsion options – internal combustion, hybrid and BEV – will predominate in the years ahead is presenting a challenge for Ford’s cleverest minds at present. “We think we’ll need to offer each of the three main solutions,” says Thai-Tang. “Luckily Ford owns IP around them all. We built our first hybrid 30 years ago.” One key reason for keeping options open, says Ford, is that government policy is a large driver of electric car take-up, and legislation varies all over the world. 

And the progress of battery technology? “Well, we’re on our sixth generation of battery,” he says. “With each generation we’ve seen a drop of about 30% in the cost per kilowatt hour. The trouble is, we keep investing in kilowatt hours to give our cars more performance and better range, which is the right thing to do, but it means prices don’t fall very fast. Batteries are definitely improving, but for the next decade I believe we’ll need to keep offering a portfolio of powertrains.”

What is the true state of Ford? 

Spend a couple of days with Ford’s bigwigs in Dearborn, as we did, and you learn a lot very quickly, especially if you take your new-found knowledge to a further meeting in Dunton with Ford’s European president. 

Our picture of Ford has changed. Far from being the beleaguered mainstream manufacturer we feared, today’s company seems happy in its skin, having taken a bold new course. In future, we are assured, Ford will show a more creative and customer-conscious attitude to the cars it designs and builds. The old ‘it’s time for a new one’ culture is dead: Ford’s car-loving management is fast-tracking a generation of iconic but practical designs that appeal directly to buyers’ emotions, and when those launched it will do it again. 

The aim is for Ford to become one of the most capable and financially savvy exponents of affordable automotive technology going, just in time for the electrification age to begin in earnest. This looks achievable, especially since great benefit will flow from Ford’s inspired choice of Volkswagen as a lead technical partner, without any of the fraught corporate share-swapping we’ve seen elsewhere. 

In Dearborn and Dunton we saw evidence that Ford’s long-held position as builder of best-selling passenger cars and light commercials in the UK will be closely guarded and sustained. Ford is no longer the biggest-selling OEM here (the combined VW Group is bigger), so it will have to battle. But we now know it has excellent weapons for the fight.

Ford restores Michigan station

Within walking distance of Ford’s Project Edison factory in inner Detroit’s Corktown district stands the enormous, imposing Michigan Central Station, a 105-year-old building destined to become the centrepiece of a Ford-backed, mobility-focused campus to be built over the next four years. Chairman Bill Ford says restoration, which began earlier this year, will entail a three-phase, £300 million makeover. A drying-out phase has already begun, which will progress in phase two to replacement of electrical and mechanical systems plus exterior refurbishment, ending with a third phase of interior restoration. 

Bill Ford says the company will eventually spend £610m transforming the station and surrounding buildings to contain apartments and “retail spaces” but also plans to base its own electric and autonomous creative teams there, hoping to attract like-minded partners to the businesses. When complete, the building will house 2500 Ford employees and is expected to provide another 2500 jobs for Ford’s partners and suppliers.

Jim Hackett: the man who runs it all

We weren’t supposed to meet Ford’s president and CEO Jim Hackett on this two-day flying visit to Dearborn. They told us he’d be committed elsewhere, and knowing how top car executives’ schedules are stretched to the minute, we knew with regret that there’d be no room for flexibility.  

Except there was. While we hovered in one of the corridors connecting the remarkably modest offices of Ford’s recently refurbed executive suites (do they suddenly have more executives to accommodate?) Hackett suddenly appeared, greeted us in his friendly way and swept us into his smallish office crowded with desk, computer and a large window overlooking the estate – one of his several domains. “Come on in,” he boomed, politely offering us a coffee we all knew there wouldn’t be time to drink. 

About the biggest thing in the whole room was a well-used whiteboard, set out with multicoloured markers. Hackett is someone who can cite numerous examples over a very successful business life of products and processes being imaginatively and productively adapted to their users. His collection of books – ‘Factfulness’, ‘Dare to Lead’ and ‘Bored and Brilliant’ were three – made his priorities quite clear: not a model car in sight.  

We outlined briefly our mission to investigate the true health and prospects of Ford, a giant in Europe about whose tribulations we’d been hearing so much that optimism about the future was proving difficult. He smiled, grabbed a couple of magic markers and set off on an explanation of “human-centred design”, a term we suddenly realised we’d been hearing all over the estate. Darren Palmer had used it; so had Bill Ford. 

According to Hackett, ‘normal’ design can make things better while appearing to make them worse. “Think of flying or driving as examples,” he says. “We think of both as worse than they used to be, even though it’s not true.” The objective of humancentred design – and he illustrated the principle perfectly with a diagram – is to reduce the ‘design gap’ between truth and perception by finding the particular sources of difficulty and refining them away. That, he told us, was an important principle being entrenched at Ford, which he expected to make a difference.