Ford’s Will Periam discusses transformational changes facing the automotive industry.
The automotive industry has been a huge factor in the global economy for many years. In Europe it employs many hundreds of thousands of people directly, and a multiple of that number taking into account other jobs supported by the industry.
Right now, the sector is undergoing a fundamental transformation, driven by the shift from traditional combustion engines to electrified propulsion, as well as by a shift towards vehicles that are software enabled.
Without complex powertrain technology as a barrier to entry, and as software technology has opened new possibilities, formidable competitors have entered – and continue to enter the industry – from China and elsewhere in the Far East, plus Tesla and others.
Restructuring
These competitors bring new ideas in terms of product, manufacturing, customer concepts, and cost competitiveness. Importantly, they do not have to spend time and resource restructuring legacy operations, which increases the pressure on traditional market participants to both compete and, in parallel, to effectively transform.
The restructuring required is more extensive than converting engine and gearbox factories to battery and e-motor production. It requires a root and branch rethink across the organisation covering engineering, manufacturing, marketing and sales, as well as administrative functions to position the business to be able to effectively compete into the future.
No company has any ‘right’ to continue to exist into the future.
Transformation
A successful approach to transformation starts with an understanding that the business needs to change. That starts with the most senior leadership and must be cascaded through the organisation if change is to take root.
Ford is a global automotive business, headquartered in the USA, with more than 120 years of history. In Ford, change is driven by the global CEO.
A demonstration of the importance of the challenge is that Ford has chosen to realign its business globally to better enable it to deliver its strategy as well as the necessary transformation.
Transformation starts with the most senior leadership and must be cascaded through the organisation if change is to take root.
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Ford has shifted from a regional business structure to create three global business units — Model E for battery electric vehicles, Ford Pro for its leading commercial vehicle business, and Ford Blue to manage vehicles with traditional propulsion systems.
In Europe we have rescaled our business over the last years, simplifying our structure, progressively rescaling and transforming our factories to new technologies, and investing in new skills to enable us to offer services to our customers.
Adding to the challenge, the transformation is not done in a vacuum and must be delivered in the context of a dynamic economic and geopolitical environment which has required us over the past few years also to manage Brexit, the global pandemic, supply chain shortages, shifting regulations and a transition to hybrid working.
Festival of Business at AMBS
Will Periam is one of the guest speakers at our Festival of Business in June, an opportunity for learning, discussion, and inspiration from the best of AMBS and global business.
The three-day event forms part of The University of Manchester’s wider 200th anniversary celebrations.
Our event opens with ‘Gaining the Edge’, a one-day seminar on ESG (Environmental, Social and Governance), leadership, strategic productivity and digital marketing.
On the second day we are hosting pupils from across Greater Manchester for a day of entrepreneurship and innovation hosted by the Masood Entrepreneurship Centre based at AMBS.
And our Festival ends with ‘Business 2050’ where business leaders and academics will discuss how business and society can find viable and sustainable solutions to today’s grand challenges.
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