Making an electric car requires 40% less labour according to Ford CEO

Ford CEO Jim Farley says that making an electric car has lower labour costs than a combustion engine car.

We all know that an electric car has far fewer parts than a combustion engine car, which makes it simpler to manufacture and simplifies maintenance.

Now Ford’s CEO has put a very interesting fact on the table, and he has stated that manufacturing an electric car requires 40% less man power.

This could mean that in the future the big automakerscould make massive layoffs in their plants to reduce this surplus labour.

However, Ford’s CEO does not intend to take the step of shedding the workforce, but is going to take advantage of this situation for a new organisation and strategy at Ford and bet again on a more vertical integration.

This means that Ford will internalise many of the processes and jobs that it currently outsources or buys from its suppliers.

Of course, Farley has already said that it will not be an easy transition and that the move to electric vehicles will involve “storm clouds”.

Even so, it is necessary if Ford wants to meet its stated goal that at least 50% of its sales by 2030 will be 100% electric cars.

A strategy that goes back to Ford’s beginnings

Ford will go back to its beginnings, to a strategy that allowed Henry Ford to create the empire that has survived over the years and which was based on having the greatest possible control of all the processes involved in making a car.

Henry Ford was already a visionary, and his empire included owning forests, iron ore mines, limestone quarries and even a rubber plantation in Brazil.

By doing so, Ford intended to have as much control as possible over the entire supply and production chain for making his cars.

And much of the move, Jim Farley said, is what Ford intends to do in the coming years, to increase its control over the supply chain and rely less on external suppliers, a strategy that other manufacturers are also adopting for the new electric age by making their own batteries for electric cars rather than buying them from suppliers.

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