Ford's N.A. margins ‘need to be better'

DETROIT — Kumar Galhotra has transformed how Ford Motor Co. runs its North America business in the 10 months since he was tapped to lead the region, but he's unhappy with how Ford stacks up to its biggest rival in a key metric.

The automaker's leadership is using 10 percent profit margins as a major goal in its global restructuring under CEO Jim Hackett. But in the third quarter, Ford posted an 8.8 percent margin in the region, unchanged from the same period a year ago. Meanwhile, crosstown rival General Motors is already where Ford wants to be, posting a 10.2 percent margin for North America in the third quarter.

"That fact is very well-known to the entire North America team," Galhotra said last week at the Automotive News World Congress. "We need to be better."

To help reach that goal, Galhotra has revamped how Ford runs the business, focusing on profit margins for specific nameplates. He has transformed the 11th floor of Ford's Dearborn, Mich., headquarters and holds weekly meetings with small teams specific to each of Ford's U.S. products.

"I wasn't expecting this magnitude of the sense of ownership these teams have in running the business and improving it," he said. "It's literally unleashing their ideas."

Among them: an increased focus on electrification. Speaking with Automotive News Group Publisher KC Crain, Galhotra said Ford will use the battery-electric vehicle platform underpinning its upcoming Mustang-inspired crossover for a future Lincoln product, but the two will "absolutely" be distinct from each other.

Although he declined to put a time frame on the introduction, he said battery EVs from Lincoln will stay true to the brand's "quiet luxury" theme, whereas the 2020 Mustang-inspired EV is expected to have an aggressive look that Jim Farley, Ford's president of global markets, compared to a rocket ship.

"You can make beautiful vehicles in different ways," Galhotra said. "The BEV technology gives us so much freedom to sculpt that vehicle exactly how we want it. We're going to create elegant Lincoln BEVs."