Hackett planning $14B cut in costs

DET ROIT» Ford Motor Co.’s new CEO plans to cut $14 billion in costs, drop some car models and focus the company’s resources on trucks, SUVs and electric vehicles as part of a renewed effort to win over skeptical investors.

Jim Hackett, who became Ford’s CEO in May, met with around 100 investors in New York Tuesday to lay out his plans for the future. He said getting the company lean and flexible will help it handle the changes the auto industry is facing, from car-sharing to selfdriving vehicles, to the shift to electric cars.

“I feel a real sense of urgency for what we’re doing here,” Hackett said.

Hackett and his executive team spent the summer visiting and reevaluating Ford’s operations after former CEO Mark Fields was ousted in May.

He said he was impressed by the talent at Ford, but wants to update factories and speed product development and decision-making.

Ford told investors it expects to reduce material costs by $10 billion by 2022 through new deals with suppliers and simpler designs. The company plans to share more parts between vehicles and reduce the options available for configuring a car.

Ford also says it will cut $4 billion in engineering costs through 2022 by making fewer prototypes and reducing product-development time. It plans to cut one-third of its engine development costs and redeploy them to electric and hybrid vehicles. Ford plans to introduce 13 new electrics and hybrids over the next five years, including a small electric SUV coming in 2020.