Ford’s ‘radical’ move to split the company won’t come easy

Ford’s decision to divide its business into two separate entities — one focused on electric vehicles and the other on gas-powered ones — may complicate the automaker’s efforts to recruit top-tier talent and could risk upsetting dealers already chafing under the shift to electrification, auto analysts and experts said Wednesday.

The move was “radical and rational,” said Jessica Caldwell, executive director of insights at Edmunds. “Right now, it’s almost as if Ford is running two companies anyway,” she added, “so it makes operational sense to draw lines between the two as it likely gives the employees more focused goals.” Ford executives faced similar questions during a call with investors Wednesday morning. Ford Blue’s newly named president Kumar Galhotra, who also serves as president of Americas and Internal Marketing Group, described the automaker’s traditional ICE business as “incredibly exciting, and as the “profit engine for the company for years to come.”

Ford is no stranger to bifurcated corporate structures, having split off its Ford Pro commercial entity last year. But the companyto go further by spinning off its EV division as a completely separate business, which likely would have been a more expensive proposition that would have enriched the banks and capital lenders but done little to advance the automaker’s EV ambitions.along with battery manufacturer SK Innovation on several new factories in Tennessee and Kentucky.

Ford says it is sticking with the dealer franchise model — and it really doesn’t have much of a choice. Many US states ban direct-to-consumer car sales, which is Tesla’s preferred sales model. Ford says its dealers will be encouraged to “opt in” to a revamped customer experience and transparent pricing. There will be no inventory, which shouldn’t come as a complete shock to anyone shopping for a new car today during the global chip shortage.

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