Ford Motor Co (NYSE:F) Reports Plans To Improve Operational Fitness

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Ford Motor Co (NYSE:F) reported plans to enhance operational fitness, accelerate the launch of smart services and vehicles, and refocus capital allocation. Showcasing at the Deutsche Bank Global Auto Industry Event in Detroit, the firm posted preliminary data for full-year 2017, issued projection for 2018 and outlined plans to support investment in sport utility vehicles and electric vehicles.

The buzz

Jim Farley, the President and EVP, Global Markets at Ford, expressed that last year F-Series extended its success as America’s top-selling pickup for the 41st consecutive year, they set a new firm high for U.S. SUV sales while Lincoln posted its best year since the change of the millennium, largely due to better growth in China. They have a robust foundation and they have seen growth in major areas, however they know they must grow to be more competitive, and reduce their full line of nameplates in different markets, to an increasingly focused lineup that offers more profitable growth with improved returns.

Bob Shanks, the Chief Financial Officer and EVP, expressed that they are working rapidly to enhance Ford’s operational fitness and reallocate funds to higher-return prospects that is expected to support profitable growth in the imminent period. Since they reinstated a payout in 2012, they have generated cumulative automotive cash flow of $31 billion, and returned $15.4 billion to stockholders via share repurchase and dividends.

Ford is further reporting its fitness initiatives first detailed at a presentation to experts last fall. This comprises making changes to offerings in production today and dramatically enhancing the business efficiency.

For instance, the firm is lowering the count of orderable combinations on Fusion, EcoSport and Escape from thousands, to merely 10 to 20 combinations for a vehicle. This will lower costs by cutting manufacturing expense, reducing logistics and inventory expense and enhance quality.

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