Ford CEO says restructuring is 'a massive undertaking' that must be 'very thoughtfully orchestrated'

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Ford (F) CEO Jim Hackett said the company is still determining what steps it needs to take to completely redesign itself.
Ford is in the midst of a plan to restructure the company that is expected to cost at least $11 billion dollars and take several years. But investors have grown impatient and frustrated with the level of detail Hackett and other Ford leadership have given about their plans. Ford's stock has lost about a third of its value this year.

During a conference call Wednesday, Hackett said he understands the frustration over the lack of clarity, but Ford has to move cautiously. Earlier, Ford reported third-quarter earnings that beat expectations .

What I remind everybody of is we first have to find the areas that need the attention," Hackett said. "We're through that. We then have to design the solutions for them. We're through a lot of that but not all of it. And then we have to put them in place and perform. If you read hesitancy from me, it's not that we don't know where we're going or don't know how to do it, it's that there's a massive undertaking that we have to have very thoughtfully orchestrated. Because my experience in doing this, the worst thing we could do is disrupt our business and we aren't going to do that.
Hackett has talked for months about the need to improve Ford's "fitness" or efficiency. And the company has announced at least some changes to its business.
In early 2018, Ford said it plans to phase out the production of passenger cars for the North American market, in favor of more popular and profitable trucks, SUVs and crossovers.
Then, in early October, Ford said it plans to make reductions to its salaried workforce of 70,000 employees. But fuller details on that won't come until the second quarter of 2019.
Hackett added on Wednesday's call that the company is already seeing some benefits from initiatives it has put in place. He cited the company's North American EBIT margin of almost 9 percent in the latest quarter as an example and said the company was "very happy" with its strong balance sheet.

"We are making great progress on the product portfolio and I can't emphasize that enough," he said.

Ford will share more details on its progress on autonomous vehicles, its strategic partnership, and its restructuring efforts in "the coming weeks and months," Hackett added.

In the wake of the earnings report, Ford shares were trading up more than 4 percent after the closing bell.
 


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