Ford Reengineers Plug-In Mustang In Real Time to Boost Profit

(Bloomberg) -- Ford Motor Co. is reengineering its electric Mustang Mach-E on the fly to make it more profitable, an approach that portends big changes in how the automaker designs and builds vehicles.

Chief Executive Officer Jim Farley told analysts Thursday Ford will no longer wait for the next model change to rework a vehicle. With software updates and hardware reengineering, the company is lowering the cost to build the Mach-E at its factory in Mexico in real time.

“We are not going to wait for next year,” Farley said on a conference call to discuss fourth-quarter earnings, which fell short of Wall Street estimates. “We're are going to reengineer that vehicle now, and then use that expertise for the F-150 Lightning” plug-in pickup that's going on sale this spring.

As an example, Farley said engineers are reworking the Mach-E's cooling system to reduce the number of hoses by one-third and cut the number of motors in half. Fewer parts mean lower costs and higher profit, he said.

This on-the-fly engineering to boost the bottom line will become a new way of doing business at Ford, Farley said. Ford's CEO has frequently praised Tesla Inc. and is said to be reorganizing using that company as a template.

“We have learned so much about the lack of integration in our engineering operations as we compared our engineering on Mach-E to others that are best-in-class, and we are finding lots of profit opportunities,” Farley said. “Being in the industry as long as I have, I haven't felt this chance to take out so much cost after Job 1.”