A month ago, Ford’s CEO, Mark Fields, told investors that the company was planning to sell off some of its flagship vehicles, including the Ford Explorer, for a “big price” in a deal with its largest customer.
The news, according to people familiar with the matter, came after Ford CEO Mark Fields told investors on Wednesday that the automaker was considering selling off some models.
As part of the deal, Ford is expected to pay $6 billion for the Explorer and a number of other vehicles in a sale that could potentially include the Lincoln MKC, the Dodge Challenger, the Ram 1500 and the Lincoln Continental.
The deal, which would be structured as a cash-for-stock offering, would not include the $5.4 billion Ford has already agreed to pay for the Lincoln and Challenger.
Ford said on Thursday that the deal was final.
While Fields is expected continue to lead Ford, he said on Wednesday the company needed to move beyond the “dumbed down” approach that has become its trademark and that the plan is to get back to making cars that “fit people.”
The news comes at a time when Ford is under increasing pressure to make some bold moves to shore up profitability.
The automaker has been facing stiff competition from General Motors, which is selling about 60,000 Explorer vehicles a week, and Nissan, which has sold about 35,000 models.
Ford has also seen strong growth in the market for electric cars, with sales of the Ford Fusion and Fusion Hybrid up 15 percent in the past six months.
But the automa’s sales and profits have also been falling.
Ford had to cut back on its production in 2019, a year in which it had said it was on track to meet a production goal of 1 million vehicles a year by 2020.
Ford has been trying to change that with its Fusion, which it announced last week was being retired and will be replaced by the Fusion Electric in 2021.
Ford’s plans to sell some of the vehicles in the deal include the Explorer, Fusion and Lincoln MKCs, which were all designed in the 1970s and have been built to Ford’s standards for decades.
One person familiar with Ford’s thinking said the automagoes planned to sell about 20% of the Explorer in a cash and stock deal, and another person familiar said the company had already begun talks with other dealers.
In addition to the Explorer’s sale, Ford has been shopping the Lincoln for years.
Ford also has a deal to buy the Lincoln name from the estate of Henry Ford Jr., the founder of the American automobile company.