Ford Motor is gearing up to launch new electric cars as soon as next year, CEO Jim Hackett told CNBC on Sunday.
Ford has previously announced its plans to invest $11 billion in electric vehicles by 2022 and produce 40 hybrid and fully electric cars, in a plan to revive its slowing business. However, the company’s chief told CNBC that drivers should be prepared for ‘a big surprise’ from Ford.
“We talked about a huge investment in electric vehicles. We have 16 models that are in design and development. We have a pretty big surprise coming next year,” Hackett told CNBC’s Phil LeBeau on the sidelines of the Detroit Auto Show, which kicks off this week.
During the first nine months in 2018, Ford’s profit dropped a whooping 27 percent from the same period in 2017. Shares of Ford, which tumbled 39 percent in 2018, are hunkered under $10 a share for the first time since 2012.
“Some of the pain in the margins additionally [is] because the vehicles are old. We have on average the oldest fleet in the industry and we are going to have average the newest fleet. 75 percent of the portfolio is being turned over,” the CEO said.
The company is also in the middle of a massive restructuring with an aim to slash costs by $14 billion over the next five years. Ford recently announced plans to cut thousands of jobs in Europe as well as discontinuing some unprofitable lines there.
Yet in the face of a skeptical market Hackett defended Ford’s moves to right its ship. He told CNBC that investors “needed to be a little patient with some of the long-lived problems that haven’t been addressed that I’m going to represent. In less than 19 months, I’ve addressed every one of them.”
Many companies have expressed concerns about American brands potentially falling out of favor in China. For example, tech giant Apple cut its forecast in January, sounding alarms that an economic slowdown will weigh on its business. However, Hackett is not so worried.
“China’s optimism is still high with us,” he told CNBC. “The brand is one of the highest-ranking brands in the country. Even at the highest levels of the government they see it as a family-owned business that middle America loves. The Chinese want to relate to American businesses like that,” Hackett added.