Ford of Europe no longer a standalone region

After 55 years of existence, Ford of Europe will no longer be a separate entity within the automaker next year when the company switches from reporting regional results to focus on its five new global divisions.

Ford is splitting its passenger-car business into the electric Model e division and the Ford Blue combustion engine unit to better prepare the automaker for the switch to electrification.

The new divisions will exist alongside three other business divisions -- the Ford Pro commercial division, Ford Drive (renamed from Ford Mobility) and Ford Credit.

Each of the businesses will report their own financial results, but regional earnings will not be broken out.

"Geographies are still going to be important to us, but we will focus more on the business units in 2023 going forward, as we report the business unit segments," chief financial officer John Lawler said on a call with analysts on March 2.

The regional business units will no longer be the focus of "how we report the way we are running the business," he added.

Ford also said that Ford of Europe President Stuart Rowley, 54, has taken an additional global job within Ford as chief transformation and quality officer, reporting to CEO Jim Farley.

Rowley's expanded role will include helping to cuts costs and to increase quality as part of Ford's goal to find savings of $3 billion in global structural costs related to the internal combustion engine business.

Rowley will be focused "on benchmarking every aspect of our business," Kumar Galhotra, president of Ford Blue, said on the analyst call.

"One of the big costs is our investments in products. Are they efficient? Are they world-class? If they are not, we need to take a bunch of investment out of there without compromising the product," Galhotra said.

Ford's European history

Ford of Europe was created in 1967 with the merger of Ford of Britain, Ford Germany and Ford's Irish division. The combined division unified the development of models in Europe, which previously were carried separately in the UK and Germany.

In the future Ford's European division will largely be split between the Ford Pro commercial division and Ford Model e, a company spokesman told Automotive News Europe.

Ford's UK-based development center in Dunton near London focuses on commercial vehicles including vans and trucks. It will largely fall under Ford Pro, while Ford's development operations in Cologne, Germany, are expected to work on electric vehicles under Model e.

The decision to organize the company into new divisions was to allow investors to see the "value creation" among each of the divisions, Lawler said. "We feel that we should get credit for that," he said.

Legacy companies like Ford have recently been valued below newer EV-focused companies such as Tesla despite consistently producing better financial results.

The new restructuring would give Ford the ability to draw on the strengths of its manufacturing experience and combine it with those of an entrepreneurial start-up, Farley said.

"Model e will produce as much excitement as any pure EV competitor, but with the scale and the resources that no startup could ever match" he said. "We want to beat the old players. We want to beat the new players."