Ford CEO: Decision-Making 'Shot Clock' Needed to Accelerate Plans
June 30 2017 - 10:40AM
Dow Jones News
By Christina Rogers
Ford Motor Co.'s new Chief Executive Jim Hackett is enforcing a
"shot clock" on lingering decisions at the auto maker to put plans
into action faster and regain competitive footing in vital segments
of the car business.
Mr. Hackett, speaking to analysts this week, rolled out the
shot-clock idea -- which is borrowed from a rule employed in
basketball to quicken the pace of the game -- as part of his agenda
for the first 100 days in a job he took over in May. He spoke
Thursday with Wall Street analysts, the first such meeting for
Ford's new chief as he confronts an underperforming stock
price.
The company has been widely criticized for appearing indecisive
on important technology bets, including self-driving cars or
electric vehicles.
In addition to setting firmer deadlines on decisions, Mr.
Hackett said he plans to focus on costs, according to analysts'
reports recounting the event. He wants to move faster to target
weaknesses in the business, such as slumping U.S. sedan sales.
Mr. Hackett succeeded former CEO Mark Fields as Ford and other
conventional auto makers scramble to keep pace with tech giants
edging in on the car business, including Alphabet Inc., Intel Corp.
and Apple Inc., and electric auto maker Tesla Inc. Ford is now
investing in autonomous-vehicle research, including taking
financial stakes in startups, and is spending more than $4 billion
to improve its electric-car lineup. Mr. Hackett signaled an
openness to revisit the strategy he inherited from Mr. Fields, the
analysts said.
The CEO change, coming as Ford's stock traded about 40% below
when Mr. Fields became chief in 2014, is seen as an attempt to fix
the 114-year-old company's culture.
"Mr. Hackett acknowledged that past slow decision-making --
sometimes caused by confusion over 'who was in charge' within newer
efforts -- has been an issue at Ford," said Itay Michaeli, an
analyst with Citigroup.
He also talked about his belief "that you can have a meeting
with just three people in the room," emphasizing that this is at
times sufficient to turn a plan into action, and expressed
"astonishment" at the amount of capital the industry requires, J.P.
Morgan analyst Ryan Brinkman said in a note.
Mr. Hackett acknowledged being behind in certain areas, such as
vehicle connectivity, Mr. Michaeli wrote in a research note.
The new CEO pointed to other areas where Ford could be leaner,
calling out the human-resources department. He told analysts that
department was "out-sized" relative to the size of the
organization, according Mr. Brinkman.
A Ford spokesman confirmed the meeting with analysts took
place.
In emerging technologies, Mr. Hackett appeared to play down the
importance of rolling out a fully autonomous vehicle by 2021 -- a
target set by his predecessor -- and analysts "sensed clear
skepticism that Ford somehow 'needs' to partner to access the car
of the future," Mr. Michaeli said.
Write to Christina Rogers at christina.rogers@wsj.com
(END) Dow Jones Newswires
June 30, 2017 10:25 ET (14:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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