By Mike Colias and Christina Rogers
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 8, 2020).
Ford Motor Co. on Friday elevated a longtime marketing executive
to the No. 2 job, betting his experience fixing operations in
Europe and guiding the company's future technology bets will help
reverse a multiyear profit decline.
The auto giant promoted strategy chief Jim Farley to chief
operating officer Friday, giving him broader responsibilities and
positioning him to potentially succeed 64-year-old Chief Executive
Officer Jim Hackett, a former office-furniture executive who has
led the company for nearly three years.
Joe Hinrichs, a 19-year veteran and manufacturing guru at the
company, will retire effective March 1, the company said. Mr.
Hinrichs couldn't be reached for comment.
The moves come three days after the No. 2 U.S. auto maker by
sales missed fourth-quarter earnings targets and issued
disappointing profit guidance for 2020. Mr. Hackett is confronting
a litany of challenges, ranging from rising warranty costs and
blundered new-model launches to persistent losses overseas and
falling profits in its home U.S. market.
The company's stock tumbled more than 9% the day following the
earnings report Tuesday, which revealed the company's profit shrank
to $47 million last year, from $3.68 billion in 2018. Ford's stock
fell 1.7%, to $8.11, on Friday.
Even as Mr. Hackett has embarked on a multiyear restructuring of
the business, Ford's finances continue to deteriorate and its
profitability in recent quarters has slipped behind that of its two
crosstown rivals General Motors Co. and Fiat Chrysler Automobiles
NV.
Analysts have been frustrated with Mr. Hackett's inability to
fully explain the weakening business or detail the progress made on
his turnaround plan.
"There's going to be a lot of speculation as to how much more
time does Jim Hackett have before the board loses patience," said
David Whiston, an auto analyst with Morningstar Inc.
Mr. Hinrichs, 53, was named president of its automotive
operations in April, putting him in charge of the company's vast
car-manufacturing network globally.
At the time, it also made the 57-year-old Mr. Farley head of new
businesses, strategy and technology, giving him responsibility for
charting Ford's course as technological advances like electric and
driverless cars disrupt the auto business.
Mr. Farley has been overseeing Ford's electric- and
autonomous-car efforts, connected-car strategy and other long-term
bets. In his new role, he will take over much of Mr. Hinrich's
duties, including running Ford's vast product-development and
purchasing arms.
Mr. Hinrichs's pending departure leaves the company without one
of its most-seasoned manufacturing executives ahead of a critical
vehicle-rollout year for Ford.
The company is gearing up to introduce late this year a revamped
F-150 pickup truck, the first redesign of its most profitable model
in about six years. The company also plans to roll out a return of
its Bronco SUV, a model that Mr. Hinrichs heavily lobbied for
internally for years.
On Ford's earnings call Tuesday, Mr. Hackett stressed the
company needed to improve execution, after a botched launch of a
new Ford Explorer last year caused profits to tumble in the fourth
quarter.
"It does boil down to, we can't miss a beat now in the product
launches, " Mr. Hackett said.
Mr. Hinrichs, an Ohio native, joined Ford nearly two decades ago
and ascended through various manufacturing jobs and ran the
company's Asia region during a time of explosive growth in China's
car market.
As head of North America, he tackled complex manufacturing
challenges, including moving the profitable and high-volume F-150
from a steel to aluminum body.
Mr. Hinrichs is well-liked and widely admired inside the company
and has strong relations with auto-parts suppliers and labor
officials, employees and colleagues have said.
Mr. Hackett said Mr. Farley's appointment is aimed at achieving
8% operating margins globally, roughly double Ford's margin in
recent quarters.
"Jim Farley is the right person to take on this important new
role," Mr. Hackett said. "Jim's passion for great vehicles and his
intense drive for results are well known. He also has developed
into a transformational leader with the imagination and foresight
to help lead Ford into the future."
Asked about how long he plans to remain CEO, Mr. Hackett said he
doesn't intend to leave soon. "I plan on staying in this job and
working with Jim tightly," he told reporters Friday.
Mr. Farley joined Ford as a rising star, coming to the U.S. auto
maker from rival Toyota Motor Corp., where he pushed the Japanese
car maker to remake its image and broaden appeal to younger
buyers.
He was a key member of former CEO Alan Mulally's restructuring
team and rolled out the company's "Drive One" advertising campaign
that endured for years after Ford repeatedly changed slogans and
approaches.
More recently, he led Ford's troubled European operations
through restructuring that had for a period restored them to
profitability.
When Mr. Hackett stepped into the top job in May 2017, Messrs.
Farley and Hinrichs were given broad roles leading the company,
effectively setting up a succession race for the next CEO.
At the time, Ford Chairman Bill Ford said part of Mr. Hackett's
job would be grooming the next generation of leaders.
In addition to Mr. Farley, the company said it would also expand
the responsibilities of product chief Hau Thai-Tang, adding
customer services and experience to his role.
Write to Mike Colias at Mike.Colias@wsj.com and Christina Rogers
at christina.rogers@wsj.com
Corrections & Amplifications Mr. Farley joined Ford from
Toyota Motor Corp. An earlier version of this article incorrectly
stated the company's name as Toyota Motor Co. (Feb. 7)
(END) Dow Jones Newswires
February 08, 2020 02:47 ET (07:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Sep 2024 to Oct 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From Oct 2023 to Oct 2024