DETROIT — New CEO Jim Hackett has been tasked with "sharpening" the operational excellence at Ford Motor in a directive from Executive Chairman Bill Ford that could involve changes to nearly all parts of the business.
"Probably everything is on the table right now," Jeff Schuster, senior vice president of forecasting at LMC Automotive, said in an interview. "That tends to be the case when you go through a change like this. You have a honeymoon period where all the ideas start flowing."
In the coming weeks, Ford leadership will meet to chart a new course for product development, mobility investments and its involvement in global markets, among other areas. Adjustments to where and how Ford spends its money are likely on the horizon after decision-making bogged down in the Mark Fields era, irking the board of directors.
"We don't lack capital for good ideas, but over time, you have to earn the cost of capital on those ideas," Hackett told Automotive News. "What we now have to do is go back and make sure things are meeting that requirement."
That could mean a modification to some of Ford's much-hyped new mobility initiatives. Prior to its shareholder meeting earlier this month, board members and shareholders questioned Ford's investment in mobility and autonomous vehicles, since it's likely to take years before the company sees a return on the billions it's pouring into those areas.
Under former CEO Mark Fields, Ford invested in shuttle service Chariot and Motivate, a San Francisco bicycle-sharing program. It also launched FordPass, a do-it-all mobility app that includes a physical brand experience center in the bustling World Trade Center Oculus.
Parts of Chariot's business are profitable, according to Barclays analyst Brian Johnson, but Ford has not commented on the bicycle business. It does not sell anything in its New York brand center, despite maintaining a large showroom alongside retailers such as John Varvatos, Apple and Hugo Boss.
"Maybe you don't have to be a player in all aspects of mobility, through bikes and everything else," Schuster said. "You could see Ford's broad definition of mobility being adjusted."
Virtually all of Ford's profits today come from its core business of selling cars and trucks. Analysts have suggested that as Ford has spent on new technologies, it's put product development on the back burner and let vehicle quality languish.
"It looked as though Fields left manufacturing and day-to-day product development decisions on cruise control," Dave Sullivan, analyst at AutoPacific, said last week. "Recalls and quality issues dragged down earnings while spending increased on new business ventures."
Earlier this year, the company said executives missed out on hundreds of thousands of bonus dollars because they failed to meet internal quality targets set by the board of directors.
"Quality is something we're always looking at," Bill Ford told Automotive News. "Recently, we've not been terribly happy with some of the rankings and reports that have come out. When we talk about sharpening operational excellence, that's a good example. We have a lot to do, and some of it is in that area."
Product development could be on the table, too. Ford has promised five new SUVs by the end of the decade and 13 new electrified vehicles by 2021.
But it's entering several key markets, including compact crossovers and midsize trucks, years later than its competition. "They're looking to spread out and adjust their model-year life cycles, which may require some investment," Schuster said.
Ford's crosstown rival General Motors has made news in recent months for withdrawing from certain areas of the world to focus on profit-rich regions such as North America and Asia. It's recently pulled out of Europe with the sale of Opel and Vauxhall and also exited South Africa and India.
Ford, meanwhile, has stayed the course in global regions including Europe, Russia, South America and India.
"You could see a scaling back in some of these areas," Schuster said. "I suspect based on what GM's been doing, their global operations will probably be under review.
"I would say take nothing for granted."