US carmaking giant Ford announced on Wednesday that it is creating separate businesses for its conventional and electric vehicle (EV) operations, as it accelerates its build-out of emission-free cars.
Under the plan, which sent Ford shares sharply higher, the conventional internal combustion operations will be known as “Ford Blue”, while the EV products will be run through “Ford Model e.”
The reorganisation, while significant, keeps both operations under the same corporate roof and avoids a potential spin-off that had generated speculation on Wall Street.
“Our legacy organisation has been holding us back,” chief executive Jim Farley said. “We had to change.”
Ford said the intention is to give the EV venture “the focus and speed of a start-up.”
Farley said the conventional business will try to excel at the challenges of a mature business, “relentlessly attacking costs, simplifying operations and improving quality.”
The two ventures will each have distinct executive leadership and report their own financial results. Both companies will continue to be headquartered in the midwestern state of Michigan.
The move is the latest announcement by a conventional automaker as the industry pivots hard to pursue EVs following the success of Elon Musk’s Tesla.
“This move represents the dual nature of every traditional automaker as they transition from internal combustion drivetrains to electric vehicles,” Karl Brauer, an analyst at iSeeCars.com, said.
Shares of Ford jumped 8.3% to $18.09 in afternoon trading.
- AFP, with additional editing by George Russell
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