By John D. Stoll, Christina Rogers and Joann S. Lubin
Wary of Silicon Valley's push into the car business, Ford Motor
Co. Chief Executive Mark Fields hired industry outsider Jim Hackett
to help counter the threat in early 2016. Now Mr. Hackett is taking
over the corner office.
Ford named Mr. Hackett, a former head of Steelcase Inc. who has
been leading Ford's "Smart Mobility" innovation unit, as its new
CEO Monday morning. The shuffle ends Mr. Fields's three-year tenure
at the helm of the Dearborn, Mich., auto maker and ends a 28-year
career at the company.
Ford Chairman Bill Ford Jr. said Monday the car company his
great-grandfather started in 1903 needs a fresh set of eyes. "We
need speed [in] decision making," Mr. Ford said in an interview. He
said Mr. Hackett needs to take "hard actions" to address
underperforming parts of Ford and "really invest in the performing
parts of the business."
Mr. Ford, long a supporter of Mr. Fields, didn't directly
comment on his performance, but acknowledged the company needed to
improve its communication with Wall Street and other constituents.
Ford's share price is down nearly 40% from when Mr. Fields
succeeded Alan Mulally in 2014.
Mr. Fields also was seen as having positioned the company for
criticism last year by then presidential candidate Donald Trump
when he announced a plan to move production of the Ford Focus from
Michigan to Mexico, according to a person familiar with the board's
thinking. At the time, Mr. Trump was slamming American companies
that made products in Mexico then sold them in the U.S.
Mr. Fields failed to make it clear that the auto maker had
specific products in mind to replace the Focus and save jobs, the
person said.
Mr. Ford on Monday said that part of the job for Ford's new CEO
"will be to teach and groom the next generation." Mr. Ford, who has
served as Ford's chief executive, said the auto maker faces
challenges as the industry pivots from conventional cars and trucks
to new forms of manufacturing, including parts made with 3-D
printers, and new types of transportation, including autonomous
vehicles.
The auto maker made several other changes at the loftiest level
of its executive ranks. Jim Farley, recruited by Ford from Toyota
Motor Corp. and credited with turning around European operations,
will be given a new prominent role as executive vice president and
president, global markets. 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.
It also tapped Joe Hinrichs, 50, as executive vice president and
president of global operations, overseeing global product
development and manufacturing. Since late 2012, Mr. Hinrichs had
been Ford's executive vice president and president for the
Americas.
The board began discussing the move to bring in a new CEO
earlier in 2017, a year during which the company stock price
slipped behind that of Tesla Inc., the electric-vehicle startup.
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.
Shares of the company rose 1.7% to $11.05 in afternoon
trading.
Mr. Hackett is known for clear communication and taking bold
action. He made waves in the Detroit area in 2014 when, as interim
athletic director for the University of Michigan, he recruited NFL
coach Jim Harbaugh to lead Michigan's vaunted 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 to help 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. Mr. Fields couldn't immediately
be reached.
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. He benefited from a revamped product line that was built
while avoiding the bankruptcies that hit Detroit rivals General
Motors Co. and Fiat Chrysler Automobiles NV's Chrysler unit in
2009.
Mr. Fields, a turnaround artist known to be a hard-charging
leader and for overseeing revivals in Ford's operations on several
continents and within various business units, was a top lieutenant
under Mr. Mulally and 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 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 at the top 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. 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 cheaper 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 Journal last year, Mr. Hackett said he
wasn't interested in being a chief executive 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 would be achieved.
Ford's North American unit is the most profitable it currently
runs. 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, acquiring van-shuttle service Chariot and
joining 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 13:25 ET (17:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Aug 2024 to Sep 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From Sep 2023 to Sep 2024