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Ford's reorganization means specialization everywhere

Small teams will develop vehicles, specialist dealers will sell them

We are beginning to understand how much more will go into the reorganization under way at Ford beyond the break into the Ford Blue, Ford Model E, and Ford Pro divisions announced earlier this month. Remember, Ford Blue will specialize in ICE vehicles, evolving the Icons lineup (Bronco, Explorer, F-150, Mustang, Ranger, Transit), providing efficient, cost-effective development and manufacturing processes for the entire company, enhancing customer service, and creating brand experiences for customers. Ford Model E will focus on all things electric and digital, from creating new battery-electric vehicles and powertrains to developing connected platforms, products, and programs for retail, commercial, and shared transportation. Ford Pro is for fleet vehicles, telematics, and solutions.

The grand aim is to figure out how to marry the best of legacy OEM operations and a global dealer network with EV startup efficiencies and savings. Ford CEO Jim Farley said Tesla's customer experience scores exceed Ford's for only about the first three years, then fall behind. He told Automotive News, "The lack of physical support for the customer becomes a really critical problem for them. ... Not everything can be done remote. We can do things Tesla can't do." But Tesla's direct-to-consumer sales mean the EV company saves $2,000 per vehicle compared to Ford, and Farley wants to find out how to narrow that gap.

Making the grand aims real will start with how Ford develops vehicles. Hau Thai-Tang, now chief industrial platform officer after the reorganization, said Ford will increasingly use small development teams with less formal oversight, using new methods, to create vehicles. That approach delivered the first and second Ford GTs, then proved its worth on a mass-market entry with the runaway hit Maverick pickup. Engineering teams working on the Mustang Mach-E and Bronco eschewed building expensive prototypes, instead mocking up ideas in foam core and virtual reality that could be tried and discarded quickly and cheaply if they didn't work. Further benefits of these methods have been reduced development time and increased secrecy.

Because OEMs are legally bound to reach customers through their dealer networks, the mothership revamp means Ford needs its dealers to embrace the changes. Execs are talking to dealers now about what the automaker is looking for, it will be up to dealers to opt in. First, Farley said, "Get ready to specialize." Realizing that certain dealers might do better with ICE vehicles and commercial offerings as opposed to EVs, Ford wants dealers to choose among Blue, Model E, and Pro. Those that don't opt in to Model E, which will mean committing to new operating standards like not carrying EV inventory, and potential facility changes, will be able to sell the brand's EVs until the end of 2023; from January 24, those dealers will only have access to ICE allotments. Said another Ford exec, "We want our dealers to add true value and really be knowledge centers for the customer," the plan now to find the best structure for that. Which, frankly, is another way of saying what dealers were meant to be all along.

The company is talking to dealers about the best way for everyone to get what they want, or to find the best compromise. Dealers welcome the dialogue, but small-market dealers don't want to cede more ground to large-market dealers with more options and throughput, and since dealers foot expensive facility makeovers when the franchisor decides to rebrand, they are all understandably cautious.

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