The announcement undoubtedly resonated strongly across all floors of Ford. ,F, Headquartered in Dearborn, Mich.
This unexpected news has certainly taken CEO Jim Farley and his team by surprise as they work to close the gap created by Tesla ,TSLA, In the highly competitive and lucrative electric vehicle market.
Farley made Tesla Ford the number one rival. The CEO wants to emerge as the big winner from this rivalry. To do so, he decided to transform Ford from an old automaker into a sort of company between a startup and a large firm. This includes removing too much redundancy and simplifying the decision-making process. In a word, Ford wants to cut its costs drastically.
“We have a lot of people,” Farley said at the Wolfe Research auto conference in February. “This management team strongly believes that our [internal-combustion-engine and battery-electric vehicle] Portfolios are earning less.”
He also said the company needs to reduce costs by $3 billion or more from its business by 2026. The company’s ambitious target is to produce two million electric vehicles by 2026. It sold just 27,140 EVs in the US in 2021.
$1.7 billion verdict
Ford says the cost-cutting is not arbitrary, but strategic, to make the business more competitive. A source told The Street last month that this cost reduction would cut several thousand salaried jobs.
Ford has separated manufacturing activities of internal combustion engine (ICE) vehicles, or gasoline cars, from operating battery-powered vehicles (BEVs).
It is in this context that a highly adverse judgment comes upon the company. A jury has ordered Ford to pay $1.7 billion in connection with a fatal accident in Georgia in 2014, Gerald Davidson of the law firm Mahafi Pickens Tucker, LLP, one of the attorneys representing the family, said by email. Told The Street.
“Hopefully, this daring jury decision will have the effect it is intended for and that Ford will do something about these millions of Super Duty trucks built between 1999 and 2016 that are still on the road,” Davidson said.
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The jury determined that Ford had sold 5.2 million “Super Duty” trucks with weak roofs that would crush people inside during a rollover, Atlanta-Journal Constitution informed of. This flaw was present in all “Super Duty” models between 1999 and 2016.
The jury delivered its verdict on 19 August after a three-week trial. The punitive damages are reportedly the largest in Georgia history. The case was first tried in 2018, but concluded in a wrong way.
A Ford spokesman responded in an emailed statement, saying, “While our sympathies are with the Hill family, we do not believe the verdict is backed by evidence.”
Will appeal against the decision, the spokesperson said.
$24 million compensatory
It is not certain that such a large amount will be the final amount. In fact, judges and courts of appeal often reduce punitive damages when they consider the amounts too large, as is the case here.
Melvin, 74, and Vonselle Hill, 62, were driving a 2002 Super Duty F-250 crew cab pickup when a tire detached, causing the vehicle to overturn and crush the vehicle’s roof.
The Hill family accused Ford of always knowing that the roof design of this 2002 model year pickup would not protect the vehicle’s occupants if it were to roll over. The family claimed that the roof design was bad. He also said that Ford had been aware of the dangers of roof crushing for many years, but did not take any steps to fix it.
Ford reportedly did not inform F-250 owners of the weak roof. Hence the vehicle manufacturer must take the responsibility of the fatal accident of their loved ones.
The jury seems to have sided with him.
The day before, jurors awarded $24 million in compensation to the Hill family for the incident.