Fields out at Ford; new CEO Hackett known for turnarounds
— Ford is replacing CEO Mark Fields as it struggles to keep its traditional auto-manufacturing business running smoothly while remaking itself as a nimble, hightech provider of new mobility services.
The 114-year-old automaker said Fields is retiring at age 56 after 28 years at the company. Fields will be replaced by Jim Hackett, a former CEO of office furniture company Steelcase Inc. who joined Ford’s board in 2013. Hackett has led Ford’s mobility unit since March last year.
In a news conference Monday at Ford’s Dearborn headquarters, Hackett said Ford does a lot of things well, but is not as good at handling complex strategy questions. Hackett plans to have a small executive team that can set the company’s plans, communicate them clearly and make decisions quickly. That’s a contrast to Fields, who had 20 direct reports and was a product of Ford’s bureaucratic culture.
“The biggest challenge I had (at Steelcase), and I will have here, is to have everybody see the future. They can see their opportunity in that. And secondly, that it’s our right to win and we don’t have to cede that to anybody, Tesla or any of them,” Hackett said. “I love that challenge because I know how to do that.”
In three years as CEO, Fields began Ford’s transition from a traditional automaker into a “mobility” company, laying out plans to build autonomous vehicles and explore new services such as ride-hailing and carsharing. Silicon Valley companies such as Google were pushing into the car business, while Uber and Lyft threatened to change people’s attitudes toward car ownership. In fact, it was Fields who put Hackett in charge of those projects as head of mobility.
Under Fields, Ford achieved a record pretax profit of $10.8 billion in 2015 as SUV and truck sales soared in the U.S. But there were rumblings that Fields wasn’t focused enough on Ford’s core business. Popular products like the Fusion sedan and Escape SUV grew dated. Ford lagged behind rivals in bringing longrange electric cars to the market. Ford couldn’t pivot quickly; when subcompact SUV sales boomed in the U.S., for example, it didn’t bring over a small SUV being sold in other regions. The stock price sagged — electric carmaker Tesla Inc. even passed Ford in market value earlier this year.
Ford’s shares jumped nearly 2 percent to $11.06 in morning trading. The company’s stock price has fallen almost 40 percent since Fields became CEO in July 2014.
Hackett was the CEO of Steelcase for 20 years. He is credited with transforming that company, in part by predicting the shift away from cubicles and into open office plans. He cut thousands of jobs and moved furniture production from the U.S. to Mexico to stem massive losses at the company.
In an interview, Ford Motor Co. Executive Chairman Bill Ford called Hackett a “visionary” who knows how to remake a business.
OPEC’s second biggest producer is also its biggest cheater.
And if past is prologue, that lengthens the odds the group will be able to squeeze too many more price gains out of its output cuts.
Iraq pumped about 80,000 more barrels of oil a day than permitted by Organization of Petroleum Exporting Countries curbs during the first quarter. If that deal gets extended to 2018, the nation will have even less incentive to comply because capacity at key southern fields is expanding and three years of fighting Islamic state has left it drowning in debt.
“Leaving that productive capacity idle will come with an opportunity cost that Iraq may prove reluctant to bear,” said Harry Tchilinguirian, the London-based head of commodity markets strategy at BNP Paribas. He’s nonetheless optimistic that global inventories will fall by year-end as members like Saudi Arabia pick up the slack for Iraq’s transgressions.
A risk, though, emerges if Iraqi compliance worsens to such an extent that other countries in the 13-member group start cutting corners too, exacerbating a global surplus that’s already erased much of the gains that unfolded after the deal was struck in November.
Brent crude tumbled below $50 a barrel this month as data showed U.S. shale producers were alive and kicking, confounding OPEC’s efforts to control the supply glut. While oil recovered losses after Saudi Arabia and Russia threw their weight behind extending the sixmonth output reductions, it’s still 7 percent off postdeal highs.
“A lot of market participants have been a bit underwhelmed by the impact of the cut,” Martijn Rats, an oil analyst at Morgan Stanley, said in an interview in Dubai. He says OPEC members are most likely to respect curbs if Brent trades in the $50-$60 range, with prices on either side increasing the risk of noncompliance.
Under the November deal, OPEC envisioned curbing 1.2 million barrels per day of output, with Iraq trimming 210,000 barrels a day to 4.351 million barrels a day. In the first quarter, Iraq met only 61 percent of its targeted cut, though compliance improved to 90 percent in April, according to OPEC data. It’s not the only straggler. The United Arab Emirates achieved just 57 percent of its cut in the first quarter, though the U.A.E. exceeded its target in April, and many non-OPEC producers including Russia also missed their goals.
“I doubt Iraq will cut any more in the second half than it has already,” said Robin Mills, the Dubai-based chief executive officer of consultant Qamar Energy.