"It is a stunning statement from a company that, together with Ford, sells more large pickup trucks and full-size sport utility vehicles than the rest of the global industry combined-and from an industry that grudgingly got into building electric vehicles in the face of stricter fuel emissions standards". The automaker will also speed up the development of vehicles by around 20 percent via new tools such as virtual reality and big data.
While Hackett made it clear Ford intends to accelerate those new lines of business, he stressed that it plans to remain "in the vehicle business, moving goods and people around".
Ford expects to have data services in all the cars it sells in the U.S. by 2019 and in 90% of the vehicles it sells globally by 2020. That means, basically, that some Ford vehicle nameplates will go away - expect some educated speculation on that soon.
Hackett's goals include aggressive cost-cutting. In August, Ford said it was considering a joint venture with Anhui Zotye Automobile Co to build electric vehicles in China under a new brand, tapping Zotye's low-priced electric-vehicle (EV) technology.
Hackett, who was put in charge as president and CEO in May after heading up Ford Smart Mobility, has spent four months evaluating Ford's position as an automaker and transportation company. The "One Ford" strategy - which helped the automaker's turnaround under former CEO Alan Mulally - doesn't fit all situations, the two insiders said, particularly in China and India, two crucial markets where Ford's sales have slowed.
So more trucks such as the Ford Ranger, potentially a Bronco (nee Everest) for Australia from 2020, the possibility of a Chinese-made Focus, and a very uncertain future for the Fiesta here, despite an all-new model launching in left-hand drive form overseas. Crosstown Detroit rival General Motors already has 7 million vehicles on the road with wi-fi capability after introducing the technology in 2015.
Hackett's strategic update, scheduled for 4:30 p.m. Tuesday in NY, will set the tone for his tenure as CEO.
The majority of those savings will disappoint up on Ford's bottom line until 2019 and 2020, Hackett and other Ford executives stated, showing the market's long product engineering lead times. GM, for instance, just announced that it'll have 20 electric auto models by 2023.
"We have too much cost across our business", he said.
For now, Ford has no plans to start producing its own batteries and battery packs the way Tesla is doing.
Now with the automotive industry spiraling through the most sensational changes in more than 100 years, Ford must at the same time upgrade its financial health while revolving towards a new business model.
During an event at the Warren Tech Center, GM Product Development Chief Mark Reuss said the company "believes the future's all electric".