Ford board feels company on right path with new CEO
Jim Farley to take over post starting Oct. 1
Ford Motor Co. named Jim Farley its new chief executive on Tuesday as the No. 2 U.S. automaker wrestled with restructuring its global operations amid the ravages of the coronavirus crisis that has forced it to take on large amounts of debt.
Farley, 58, who is chief operating officer, will succeed Jim Hackett as chief executive and president on Oct. 1, the automaker said. Farley will be Ford’s fourth CEO since 2014.
Executive chairman Bill Ford said the company had not considered outside candidates because “our board felt that we were on the right path” with Farley.
“I wouldn’t expect any big surprises,” Ford said in terms of additional management changes.
Farley, who joined the company in 2007, was named COO in March. At that time, his main internal rival for the top role at the automaker, Joe Hinrichs, announced his retirement.
Farley has a reputation within Ford for being a skilled political operator with sharp elbows, which has garnered him some loyal fans but made him unpopular with others.
Hackett and Farley will work together during a twomonth transition period, and Hackett, 65, will continue as a company adviser through March 2021.
Ford shares closed up 2.5 per cent on Tuesday in New York trading at $US6.86, after earlier rising three per cent on news of Farley’s succession as CEO.
The stock has lost nearly 40 per cent of its value since Hackett took the reins as chief executive in May 2017 and has been at lows not seen since the depths of the Great Recession in 2009.
In the year to date, Ford shares have lost 26 per cent and its market capitalization of US$27 billion is one-tenth that of rival Tesla’s.
Hackett was handpicked for the top job at Ford by chairman Bill Ford, great-grandson of company founder Henry Ford. Hackett had no automotive experience, and his tenure at the automaker was rocky and accompanied by persistent rumours that he was about to be ousted, but Bill Ford stuck loyally by his chosen CEO for more than three years.
Last week, Ford reported a quarterly profit thanks to an investment by Volkswagen AG in its self-driving Argo AI unit, more than offsetting an operating loss caused by a coronavirus-induced production shutdown.
Ford said it expects a fullyear loss, but added it should have ample cash on hand through the rest of 2020, even if global demand falls further or the coronavirus pandemic forces further shutdowns of vehicle assembly plants.
Executives insisted that although the company had dramatically scaled back the amount it will spend on a global restructuring of its business, that overhaul had not stalled.