Ford ecommerce unit put on the scrapheap
Ford Motor Company has quietly redrawn plans made at the heart of the dotcom boom, writing off nearly $200m (£129m) in failed ecommerce initiatives.
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Ford is to close its ebusiness unit, ConsumerConnect, and moving employees to other parts of the firm. The unit’s chief executive Karen Francis has left after 15 months with the company.
The company said it was implementing new cost-cutting methods because its previously announced cuts were not moving as fast as planned.
It echoes similar moves made by rivals General Motors, who brought its ebusiness arm back into the main company last year.
The separation of ebusiness units and main business units was a common mistake in the dot com boom, but most firms have realised this is a mistake, said Clive Longbottom, from analyst firm Quocirca.
‘You need new skills for ecommerce. You don’t need separate people. There needs to be cohesion between business processes and new technology,’ he said.
At the launch of ConsumerConenct, Ford’s then chief executive, Jaques Nasser claimed it would ‘reinvent the auto industry’, promising annual savings of $9bn. These activities will now be integrated into other Ford’s global marketing efforts, said a company spokesman.
Ford’s ebusiness unit, ConsumerConnect – which is similar to the e-GM unit of General Motors – was developed as a standalone division to develop and implement the company’s ecommerce strategies.
The company said it was implementing new cost-cutting methods because its previously announced cuts were not moving as fast as planned.
In its filing with the Securities and Exchange Commission, Ford said it had taken a $199m charge to write down ‘certain investments in ecommerce and automotive-related ventures’.
Francis was responsible for managing Ford’s ecommerce ventures and activities that included e-supplier relationships, consumer ebusiness activities, telematics and customer relationship centres.