Ford board feels com­pany on right path with new CEO

Jim Far­ley to take over post start­ing Oct. 1

National Post (National Edition) - - FINANCIAL POST - NICK CAREY, DAVID SHEPARDSON AND RACHIT VATS

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.

Jim Far­ley

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