Idling Ford replaces Fields as CEO
IN A shakeup reflecting the pressures on the US auto industry, Ford Motor Co is replacing its chief executive, Mark Fields, according to officials briefed on the move. Jim Hackett, who oversees the Ford subsidiary that works on autonomous vehicles, will take the reins from Fields. Ford was set to make an announcement yesterday morning, the officials said.
During Fields’ three-year tenure – a period when Ford’s shares dropped 40 percent – he came under fire from investors and Ford’s board for failing to expand the company’s core auto business and for lagging in developing the hightech cars of the future.
The change came less than two weeks after Fields was sharply criticised during the company’s annual shareholders meeting for Ford’s deteriorating financial results.
Hackett, 62, a longtime chief of the office furniture giant Steelcase and a former Ford director, joined the company’s operational ranks last year as head of its “smart mobility” operation, which includes driverless technology.
As recently as last week, Fields, 56, had been trying to strengthen Ford’s bottom line by cutting 1,400 salaried jobs. But, unable to reverse the stock decline, he ran out of time to carry out his strategy to slash costs and expand Ford’s lineup of trucks and sport utility vehicles, while also investing in autonomous and electrified vehicles.
Despite spending heavily on self- driving research, Ford was struggling to keep pace with larger automakers such as General Motors and tech giants like Google, both of which have been testing self-driving vehicles. Ford is promising to have a fully autonomous vehicle on the road by 2021.
The upstart electric-vehicle maker Tesla – which recently surpassed GM and Ford in market capitalisation – is bringing a mass-market model to market later this year.
At the annual meeting on May 11, Fields said Ford was capable of staying competitive in the current market for new vehicles, while also “keeping one foot in the future” of an industry heading toward autonomous, battery-powered cars.
Yet Ford is showing troubling signs of decline. Profit in the first quarter dropped more than 30 percent from a year earlier, and the company’s US market share declined slightly.
And with auto sales in the United States cooling off after two record years, Ford faces a tough balancing act to maintain strong results in North America while investing in projects for the future.
Fields was also at the forefront of an abortive plan to build a $1.6 billion assembly plant in Mexico for small cars. The project was abandoned early this year as sales stalled and President Donald Trump’s election brought pressure on Ford to make more vehicles in the US.
This year, Ford has had a number of safety recalls that have raised red flags about its overall vehicle quality. The company has also experienced a deep decline in the sale of small and midsize cars, leading some Wall Street analysts to suggest that it drop unprofitable models from its portfolio.
Ford’s car sales are down 25 percent this year – far more than the overall industry decline in the car segment – and it is making little, if any, money on the cars it does sell.
The personnel changes at the company extend beyond the departure of Fields and ascension of Hackett, according to the officials briefed on the move.
Joseph R Hinrichs, head of Ford’s critical Americas division, will expand his role to become executive vice president for global operations. James D Farley Jr, who runs Ford’s European unit, has been appointed to oversee worldwide sales and marketing. And the company’s chief technical officer, Marcy Klevorn, will take over Hackett’s duties as chief of mobility initiatives.
In a related move, Mark Truby, who previously led the company’s communications teams in Asia and Europe, will immediately take over as its communications chief. He succeeds Raymond F Day.