FIELDS OUT, HACKETT IN AS PATIENCE WEARS THIN
Automaker trying to speed up decisions, boost stock price
In a move that takes dead aim at Silicon Valley, Ford replaced its CEO on Monday with a former office furniture executive who lately has been focused on the future of transportation.
With Ford’s stock price flagging, Ford Motor ousted CEO Mark Fields and replaced him with Jim Hackett, an outsider known for corporate culture change and the former head of Steelcase, who’d only been at the automaker for about a year.
Ford, based in Dearborn, Mich., is seeking to recapture the magic of an outsider’s insight and expertise. It worked once before with Alan Mulally, a former Boeing manufacturing executive who saved the automaker from bankruptcy in the late 2000s despite never previously working in the auto industry.
“It’s hard to do,” Ford Executive Chairman Bill Ford said. “But Jim is a change agent.”
Hackett, 62, had been heading the automaker’s “mobility” division and was a favorite of Bill Ford’s.
“Ford is no stranger to looking outside of the house of Dearborn for someone to affect radical change,” Morgan Stanley analyst Adam Jonas said in a note to investors. But with the future uncertain, “in many ways, Mr. Hackett’s job may be more challenging than Mr. Mulally’s.”
Ford needs to reinvent itself as a more efficient company poised to capitalize on a future in which people may not drive or own their vehicles. Investors are bracing for seismic change to sweep through the transportation sector — potentially making car ownership unnecessary for millions of consumers in an autonomous ridesharing world. Nothing short of major transformation will impress them.
Automakers, both in Detroit and abroad, are in a race with Silicon Valley’s best-known technology companies to develop self-driving cars that could prowl the streets and be shared. Hackett’s biggest challenge may be convincing the world that Ford can fend off Tesla, Google and Uber, as well as traditional rivals such as General Motors and Toyota.
He has shown before that he isn’t afraid of setting a bold new course. At Steelcase, Hackett distanced the company from its treasured cubicle furniture and emphasized open-space work environments, which turned out to be a savvy bet. He cut costs aggressively, including shedding thousands of jobs.
During a recent stint as interim athletics director at the University of Michigan, where he had played football for iconic coach Bo Schembechler, he hired fan favorite Jim Harbaugh as head coach and returned the Wolverines to respectability.
Bill Ford said Hackett’s ability to pair a focus on the future with operational improvements was enticing. The two corporate leaders have long admired each other, often exuding a chummy vibe when paired together on media campaigns.
The company’s board made the call Friday. “But no decision like this is made hastily,” Bill Ford said. “There have been some discussions for some time.”
Though a radical change at the corporate level, Ford vehicle customers might not notice much in the short term. The switch, Bill Ford said, is aimed at remaking Ford’s legendarily hierarchical culture, expediting decision-making, pursuing a cohesive vision for the future and improving day-today operations.
Hackett said he would “be more emphatic about parts of the culture that need to come out,” citing the need to move faster as one key. He even lightly criticized Mulally — nearly sacrosanct territory in the automotive industry — for carrying out a strategy that did not adequately position Ford to handle “complex strategy questions.”
The shakeup comes after the board grew impatient with the company’s lagging stock price, down 34% from when Fields took over in July 2014. On Monday, Ford shares rose 2% to close at $11.10.
The move puts an abrupt end to a nearly three-year tenure at the top for Fields, 56, who got the job when Mulally retired from full-time corporate leadership.