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Ford will split into two units; a gas one and an electric one The American
automaker is going to split its auto business into two units — Ford Blue and
Ford Model E. They will be housed under the same corporate umbrella.


BUSINESS


FORD ANNOUNCES A HISTORIC RESTRUCTURING AS IT PIVOTS TO AN ELECTRIC FUTURE

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March 2, 202211:44 AM ET

Camila Domonoske

Twitter
Enlarge this image

The Ford Bronco logo is displayed on a vehicle in Colma, Calif., on Jan. 5. The
American automaker is splitting its auto business into two units. Justin
Sullivan/Getty Images hide caption

toggle caption
Justin Sullivan/Getty Images


The Ford Bronco logo is displayed on a vehicle in Colma, Calif., on Jan. 5. The
American automaker is splitting its auto business into two units.

Justin Sullivan/Getty Images

Ford's Model T reshaped the 20th century. Tesla's Model 3 is transforming the
21st.

Now, meet "Model E" — part of Ford's big plan to bridge its gas-powered past and
its battery-powered future through a major restructuring of its business.

Ford is splitting its auto business into two separate units: Ford Blue, for
traditional gas- and diesel-powered vehicles, and Ford Model E, for new electric
models.

The automaker has already split off a unit for commercial customers called Ford
Pro.

Wall Street responded positively to the restructuring of the company, with
stocks moving up on the news as investors welcomed Ford's commitment to growing
its electric business.

"Sometimes two is better than one," Bank of America mused in a note, while
Jefferies called it a "creative move."


BUSINESS


GIVING UP GAS-POWERED CARS WAS A FRINGE IDEA. IT'S NOW ON ITS WAY TO REALITY


FORD WANTS THE TWO NEW UNITS UNDER THE SAME UMBRELLA

Some analysts had been pushing Ford to spin off its electric vehicle production
into an entirely separate company — one that is future-focused and
growth-oriented, and could trade stock in the eye-popping valuations that Tesla
and other new electric vehicle startups are enjoying.

But Ford CEO Jim Farley said that doesn't make sense at this time.

Enlarge this image

Current Ford CEO Jim Farley speaks at the New York International Auto Show event
in New York City on March 28, 2018. Farley was then a senior executive at the
automaker. Spencer Platt/Getty Images hide caption

toggle caption
Spencer Platt/Getty Images


Current Ford CEO Jim Farley speaks at the New York International Auto Show event
in New York City on March 28, 2018. Farley was then a senior executive at the
automaker.

Spencer Platt/Getty Images

Keeping the businesses under a single corporate umbrella allows them to share
technology and capital, he says, with Ford Model E benefiting from the cash flow
and economies of scale of Ford's traditional business, while Ford Blue gets to
piggyback off the technological innovations that the more software-focused
electric vehicle division is investing in.



"Model E will nurture the talent and the culture and the intensity of a
high-tech start up," Farley said on Wednesday. "Blue will be a profit and cash
engine for the entire enterprise."


CLIMATE


FORD BREAKS DOWN HOW IT PLANS TO REACH ITS ZERO EMISSIONS COMMITMENT


KEEPING A FIRM FOOT ON ITS GAS-POWERED PAST

Ford has seen strong demand for its electric offerings, like the F-150 Lightning
and Mustang Mach E. But it also continues to make enormous profits off
traditional gas- and diesel-powered vehicles, particularly large trucks.

The company has committed to massively increase its electric vehicle production.
Ford says it will build more than 2 million electric vehicles per year by 2026,
which will represent about a third of the company's global output.

And at the COP26 climate convention last year, Ford even signed on to a pledge
to shift toward exclusively zero-emission vehicles by 2040.

But unlike some rivals, Ford is not fully committing to entirely phasing out
gas-powered vehicles.

Farley told investors there are some trucks and SUVs where he doesn't think
electric vehicles are a good fit.

"Although maybe the volumes go down ... I think we'll see a really revitalized
[internal combustion engine] business," he said.

The entire auto industry is pivoting toward electric vehicles, but companies
have wildly varying timelines for transitioning away from traditional vehicles.

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