Ford Motor CEO Jim Hackett told employees late on Thursday the No. 2 U.S. automaker would not accept last year’s “mediocre” results and said the company was aiming to nearly double its annual operating profit.
Hackett made his comments in an email to employees that was seen by Reuters.
Ford is restructuring its worldwide operations, including new plans to make cuts in Europe. It also has declared an alliance in commercial vehicles with Germany’s Volkswagen, with strategies to jointly develop electric and self-driving vehicles, in moves supposed to save billions of dollars.
Ford declared its fourth-quarter results on Wednesday, reporting a 2018 operating profit of $7 billion with a profit margin of 4.4 percent, dropped from 6.1 percent in 2017. Ford stated last week that its target for operating margin was over 8 percent.
“2018 was mediocre by any standard,” Hackett stated in the email. “Yes, we made $7 billion last year. But think of it this way: this represents a 4.4 percent operating margin, about half what we consider is an appropriate margin. So we are aiming for much closer to $14 billion.”
Hackett did not provide a timetable for hitting the $14 billion target. A Ford spokesman stated Hackett was simply doing the math to indicate employees how the margin target translated to total profit.
Hackett, who has been on the job for 1 year and 8 months, also stated that it was “time to bury the year (2018) in a deep grave, grieve over what might have been and become super focused on meeting, and, in fact, exceeding this year’s plan.”
