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The
EV and ICE businesses will have separate names but will remain
under the Ford corporate umbrella, in the same way the company
operates its Ford Pro commercial business for corporate
customers, said the people, who asked not to be identified.
The U.S. automaker will name executives to lead each business
and Ford will also outline updated profit margin targets for the
company overall, the sources said. The idea is for Ford to
eventually report separate financial results for the EV and ICE
businesses, one of the sources said.
Ford spokesman T.R. Reid declined to comment on the report.
"We're focused on carrying out our Ford+ plan to transform the
company and thrive in this new era of electric and connected
vehicles," he said.
In response to reports Ford was weighing a full spinoff of its
EV business, Chief Executive Jim Farley last week said the
company had no plans to spin off either its EV or ICE
businesses.
"We know our competition is Nio and Tesla, and we have to beat
them, not match them," he said last Wednesday at a Wolfe
Research conference. "And we also have to beat the best of the
ICE players."
However, by separating the EV business into a separate unit,
Ford would be setting the table for a possible spinoff down the
road, industry officials said.
The growing preference among investment managers for companies
focused on low-carbon technology has helped Tesla Inc become the
world's highest-valued automaker, and led some investors and
analysts to urge other carmakers to consider separating their
combustion engine and electric businesses as a way to better tap
into their full values.
Companies such as General Motors Co have resisted those calls,
arguing that ICE profits will fund the transition to EVs.
Ford's expected move echoes one outlined earlier this month by
French automaker Renault, which said it was looking at creating
separate divisions for its EV and ICE businesses. It said the EV
business could be focused on France, while the ICE operations
could be focused outside France.
Farley also said last week that Ford's EV and ICE businesses
were underperforming on an earnings basis, adding that costs
could still be cut from the ICE business.
"We have too many people, we have too much investment, we have
too much complexity and we don't have expertise in transitioning
our assets," he said of the ICE business. "That's the simple
answer. There's waste."
He also said Ford needed to add more people to improve profit
margins for its EV busines, including in such areas as
electrical components, advanced electrical architectures and the
digital customer experience.
Candidates to run the businesses could include Ford's chief
advanced technology officer Doug Field, who was hired from Apple
Inc; Hau Thai-Tang, chief product platform and operations
officer; Lisa Drake, chief operating officer of North America;
and Kumar Galhotra, president of the Americas and International
Markets, industry officials said.
(Reporting by David Shepardson in Washington and Paul Lienert
and Ben Klayman in Detroit; editing by Richard Pullin)
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