• Home

Friday, December 5, 2008

The Ford Motor Company's Business (Survival) Plan

Below is the section on sustainability and electric vehicles from the business plan that Ford presented to the Senate Banking Committee on December 2nd. After reviewing this plan as well as the plans, the big three CEO's testimony to Congress, and also the financial health of the Detroit automakers, I have to say that Ford's relatively stronger balance sheet, their aggressive plans for rolling out electric vehicles, and having a chairman in Bill Ford who has longed to make Ford a green auto company, makes Ford the favorite to come out of this recession with a plan and strategy that will put them in a position of strength to compete with the Toyotas and Hondas who have been eating the big three's lunch throughout the past three decades. More to come on the plans of GM and Chrysler, but from first glance it looks like GM is asking for $18 billion to gut the company, while Chrysler seems to be a counting down the days until its cash shortage forces them to turn off the lights.

Here is the press release from Ford, which has links to both the plan (PDF) and appendix (PPT).

A WSJ reporter lived blogged the testimony, and it is worth reading in its entirety, especially the parts where Nardelli and Wagoner seem to be losing it.

Ford's Sustainability and Electrification Strategy
(page 16 in the report)

Ford’s sustainability plan will achieve continuous and substantial improvement in fuel economy and a corresponding reduction in CO2 through affordable technology in high volume. Ford’s plan is to make affordable fuel efficiency available to millions of consumers.

Our three-phased approach – with near-term,medium-term and long-term advanced technologies and products – begins now with advanced internal combustion engine and
transmission technologies, such as our EcoBoost engines going into production on several vehicles in 2009. The next major step in Ford’s plan is to increase over time the volume of electrified vehicles, as battery costs improve and as the transition from Hybrids to Plug-in Hybrids to Battery Electric Vehicles occurs. (See Appendix, Slide 4.)

Next month at the North American International Auto Show in Detroit, we will discuss in detail Ford’s accelerated vehicle electrification plan, which includes bringing to market by 2012 a family of hybrids, plug-in hybrids and battery electric vehicles. Our work will include partnering with battery and powertrain systems suppliers to deliver a full battery electric vehicle (BEV) in a van-type vehicle for commercial fleet use in 2010 and a BEV sedan in 2011. We will develop these vehicles in a manner that enables us to reduce costs and ultimately makes battery electric powered vehicles more affordable for consumers.

Our plan also includes building on our competence in hybrid vehicles, as demonstrated by the industry-leading fuel economy of the Ford Escape and Ford Fusion hybrids. We are now developing our next generation full hybrid technology, which includes plug-in capability, for vehicles in 2012 and beyond. We are targeting a substantial increase in hybrid volume through a greater than 30% reduction in cost, installation of hybrid capability in global platforms and hybrid vehicles that are uniquely styled.

We cannot, however, accomplish significant electrification by ourselves. The 2007 Energy Independence and Security Act requires American-developed breakthroughs in high-power energy batteries (e.g. lithium ion). In order to make significant progress in electrification, Ford supports establishing a U.S. public/private partnership to accelerate the development of this capability, including supporting infrastructure, within the United States.


Anonymous said...

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.



Marginal Designs said...

How embarrassing must it be to have yourself publicly scolded and flogged as the auto execs have. I'm not saying it's wrong, I'm just saying wow.

EdHeath said...

What's your take on the Better Place company? Tom Friedman wrote about them today in the NYTimes.

Schultz said...

Well, it sounds promising, and their CEO, Agassi, is out there making deals, so that is good to hear. California (the bay area) and Hawaii (the entire state) are signed on to build the electric charging infrastructure for the Better Place system. Several other nations are on board as well. I posted about the Hawaii announcement a few posts prior to this one.