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By John D. Stoll, Christina Rogers and Joann S. Lubin 

Looking to combat Silicon Valley's abrupt push into the car business, Ford Chief Executive Mark Fields hired industry outsider Jim Hackett to help tackle the issue in early 2016. Now Mr. Hackett is taking over the corner office.

A former head of Steelcase Inc., Mr. Hackett has been chairing Ford's "Smart Mobility" innovation unit. He will be named Ford's new CEO as early as Monday, according to several people familiar with the matter. The shuffle ends Mr. Field's three-year tenure at the Dearborn, Mich., auto maker's helm and caps a 28-year career at the company during which he developed a reputation as a hard-charging leader.

The board began discussing the move earlier in 2017, a year during which the auto industry icon's stock price slipped behind Palo Alto, Calif., electric-vehicle startup Tesla Inc. The Tesla development, along with tension amid the management ranks, shook directors' confidence in the strategy and direction, according to people familiar with the deliberations.

Mr. Hackett is known for clear communication and taking bold action, and recently made big waves in the Detroit area when as interim athletic director for the University of Michigan he famously recruited NFL coach Jim Harbaugh to lead Michigan's football program. He most recently oversaw the formation of Ford Smart Mobility, a unit responsible for experimenting with car-sharing programs, self-driving ventures and other programs aimed at helping the 114-year-old auto maker better compete with Uber Technologies Inc., Alphabet Inc. and other tech giants looking to edge in on the auto industry.

The Wall Street Journal reported the board's deliberations on a management shake-up Sunday evening. A Ford spokeswoman declined to comment on the move--Messrs. Fields and Hackett couldn't immediately be reached.

Jim Farley, recruited by Ford from Toyota Motor Corp. and credited with turning around European operations, will also be given a new prominent role. Mr. Farley, 54, will work directly under the 62-year-old Mr. Hackett as a potential successor, according to multiple people briefed on Ford's plans.

A group of other executives will be reassigned.

Mr. Hackett is a one-time Ford board member known for an easy and straightforward style reminiscent of Alan Mulally, a longtime Boeing Co. executive recruited to run Ford in 2006. Mr. Mulally addressed the turmoil that permeated Ford's management ranks at the time, sold off business units and shored up the balance sheet.

Mr. Mulally left Ford in 2014 as the company was on a winning streak, benefiting from a revamped product line that was built while avoiding the bankruptcies that claimed its Detroit rivals General Motors Co. and Fiat Chrysler Automobiles NV's Chrysler unit in 2009. Mr. Fields, a turnaround artist known for overseeing revivals in Ford's operations on several continents and within various business units, was a top lieutenant under Mr. Mulally and Chairman Bill Ford's pick as the successor.

The company's board and Mr. Ford, however, began discussing changes to the leadership team recently as the share price hovered around $11 a share--nearly 40% lower than when Mr. Fields took over. When the market capitalizations of Ford and GM were individually surpassed by automotive upstart Tesla Inc.'s earlier in this year, it underscored how far behind Detroit is perceived to be in the race to develop new technology.

One of several auto-industry outsiders recruited by Mr. Fields, Mr. Hackett was installed to be instrumental in helping Ford's moves into transportation-related services. Auto executives are confronting changing attitudes toward car ownership. Uber, Google, Tesla and others are racing ahead with programs aimed at overtaking Detroit as the tope of the U.S. car industry.

Those programs include electric vehicles, ride-hailing services and programs aimed at putting vehicles on the road entirely capable of driving without human intervention. Mr. Fields has been planning to launch driverless cars early next decade, but it has been far behind Tesla and GM on electric-car development and executives have struggled to explain how Ford will make money on services other than developing, producing and selling automobiles.

Ford has posted a series of solid profits under Mr. Fields, aided by renewed demand for pickups and sport utilities that deliver higher margins and do well in an era of cheap gasoline. Mr. Farley, meanwhile, helped deliver more than $1 billion in profit in Europe last year, with the favorable result coming as GM exited that region due to persistent losses and a lack of confidence in its German Opel unit.

Mr. Fields, however, has struggled with Wall Street. Analysts and investors have routinely questioned the company's ability to weather the next industry downturn--criticism has increased as U.S. auto sales plateau and Ford's market share slides.

Over 30 years at Steelcase, Mr. Hackett reshaped the company's workplace offerings, dispensing with cubicles and embracing open offices.

In an interview with The Wall Street Journal last year, Mr. Hackett said he wasn't interested in being a CEO again but was interested in helping Mr. Fields think through tough challenges.

During the interview, Mr. Hackett explained that traditional car-building consumes substantial capital and returns relatively slim margins. In so-called mobility services, he said Ford could eventually earn far more attractive margins if it hired the right software engineers and designers.

The auto maker has been projecting 20% margins in the mobility services business, but hasn't outlined when that will be. Ford's North American unit is the most profitable it currently runs, and it returns about 10% operating margins under the best conditions.

Ford's Smart Mobility unit has made some initial moves under Mr. Hackett's direction. For instance, it hired van-shuttle service Chariot and joined up with a bike-sharing firm.

Write to John D. Stoll at john.stoll@wsj.com and Christina Rogers at christina.rogers@wsj.com

(END) Dow Jones Newswires

May 22, 2017 06:32 ET (10:32 GMT)

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