Ford’s internal combustion engine vehicles division, known as Ford Blue, is set to undergo significant transformations in the coming months as part of a strategy to reduce production costs and enhance profitability.
As a result of these efforts, Ford plans to significantly decrease the number of orderable combinations for its popular F-150 pickup truck. Kumar Galothra, President of Ford Blue, revealed that the upcoming 2024 model year will feature approximately 2,400 fewer parts compared to the current model. This reduction in complexity will result in fewer parts to engineer, test, and manage for quality control.
The optimization drive extends beyond the F-150, with the Explorer SUV also undergoing a similar streamlining process. Galothra mentioned that the company currently has around 500 combinations of cable harnesses for the Explorer, a figure that will be reduced to less than 20 in the coming months.
Ford has made several seemingly minor adjustments that have yielded substantial savings. For instance, changing the material specifications for front rails, mounts, and exhaust manifolds has saved the company approximately $30 million annually. Additionally, eliminating a cable that differed between two manufacturing plants, which was previously used to pull vehicles through the assembly line, resulted in an additional $11 million in annual savings.
Galothra acknowledged the need to address the company’s cost competitiveness, emphasizing the reduction of material and structural costs. Ford is benchmarking its competition and collaborating with suppliers to lower the bill-of-material costs. This multipronged approach aims to enhance the overall cost-effectiveness of Ford’s vehicles.
In terms of the product life cycle, Ford Blue intends to extend the lifespans of vehicle platforms, while also reducing spending on sheet metal. Galothra explained that the focus on software allows for longer product lifecycles and the potential for multiple facelifts during a vehicle’s lifetime. Customers increasingly value software features, and with over-the-air capability, exciting updates can be delivered to customers throughout their ownership experience.
Regarding the growth trajectory of the internal combustion engine (ICE) business compared to Ford’s electric vehicle (EV) division, Galothra believes that the portfolio of gasoline and diesel vehicles is less exposed to the transition to EVs. The limited availability of EV charging stations off-road, an area where Bronco buyers spend significant time, and concerns about EV range while towing remain obstacles for typical pickup drivers. Galothra anticipates continued demand for ICE pickups and hybrid pickups until EV range and charging infrastructure improve substantially.
The changes implemented by Ford Blue demonstrate the company’s commitment to cost optimization, streamlining production, and aligning with evolving customer preferences and market demands.
