Ford Motor Co.'s new CEO said his company needs to be smarter, run leaner and move more quickly into the future to remain profitable.
Jim Hackett, who took the car company's top job in May, told investors in Detroit that Ford must build more SUVs and trucks, move more quickly toward electrification and increase connectivity among its vehicles.
Outlining a campaign to increase revenue while controlling expenses, Hackett said Ford had to become a more disciplined company.
"We can't compete for the future unless we get fit today," Hackett said. "Our priority is to reset revenue and attack costs."
That will mean reducing the number of options available per vehicle and increasing the number of parts that are shared between vehicles.
A current Ford Focus, for example, can be had in 360 different combinations of engines, transmissions, colors, trim lines and so on. The future model will be ordered in only 26 combinations, Hackett's presentation said.
In dollar values, the new plan will call for the implementation of a "cost attack plan" that will save $4 billion in engineering costs over the next five years, and an additional $10 billion in savings in material cost efficiencies.
"We will do this by increasing common parts, reducing order combinations and building fewer prototypes," Hackett told investors.
The CEO said Ford vehicles in the U.S. will be smarter by becoming 100% connected to each other by 2019, and 90% connected globally by 2020.
He also declared that Ford will focus increasingly on trucks and SUVs and less so on passenger cars and will back that up with the reallocation of $7 billion in expenditures.
"We are shifting funds from cars to SUVs and trucks and bringing the Ranger, Bronco and EcoSport to North America," he said, while giving a particular shout-out to the new model Navigator.
The new Ranger will be available in 2018 and the new Bronco two years later.
Analysts were guardedly positive.
"It's clear that Jim Hackett and team are preparing for the future, balancing short-term vision such as product balance with longer-term goals such as electric vehicles and autonomous driving," said Kelley Blue Book's Akshay Anand. "Regardless, Ford's biggest challenge may be delivering shareholder value and gains in a time where many other stocks have been booming."
Ford stock closed at $12.34 Tuesday, up 2%.