Ford Motor Company (NYSE:F) has unveiled a broad internal reorganization aimed at tightening how it designs, develops and industrializes vehicles, in a move that UBS analysts say could improve efficiency but raises some questions around leadership continuity in its electric vehicle strategy.
The company is creating a new “end-to-end” product creation and industrialization organization that will be overseen by COO Kumar Galhotra.
As part of the change, Ford said its Electric Vehicle, Digital and Design team will be integrated with its global industrial system, a structure it says is intended to accelerate execution of its Ford+ plan and support its long-term target of an 8% adjusted EBIT margin by 2029.
The overhaul also includes leadership changes. Doug Field, Ford’s chief EV, digital and design officer, will leave the company under the new structure.
From a strategic standpoint, UBS analysts said the reorganization makes conceptual sense.
“Thinking about the product (and planning) more integrated and holistically can create efficiencies,” analysts wrote.
“Traditionally, engineering designs the vehicle, manufacturing then industrializes, but there are many steps in between that have caused late-cycle redesigns, cost overruns, and launch delays. Better alignment, if achieved could lead to more discipline and more on-time, on-budget launches.”
The analysts also highlighted potential benefits from embedding digital and software considerations earlier in the product planning process. This, they said, could help Ford better position itself to monetize software-defined vehicle features and scale digital offerings across its lineup.
However, the departure of Field may be viewed negatively by investors given his role as a key EV leader within the company. His exit could prompt questions about Ford’s upcoming UEV platform, UBS said.
Ford shares were down 1.6% in afternoon trading following the announcement.