Ford shifts gears, names new CEO
Automaker hopes to accelerate 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 head- ing 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 technol- ogy 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 dis-
It’s hard to do. But Jim is a change agent. ... There have been some discussions for some time.” Bill Ford, executive chairman of Ford
cussions 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.
Under Fields’ leadership, Ford posted respectable profits. The company capitalized on industryrecord sales in the U.S., having introduced an aluminum-body Fseries pickup, the most popular vehicle in the business, and minting money with large SUVs amid low gasoline prices.
But unexpectedly steep costs and quality issues, including major recalls, helped take down Fields, AutoPacific analyst Dave Sullivan said.
The automaker said Hackett would focus on “operational execution,” identifying a viable future and adopting data science, artificial intelligence and automation to modernize the company.
“It was a little bit overdue,” Sullivan said. “There was some growing frustration with the dayto-day operations.”
The future is a concern, too. The company recently fell behind Tesla in market value — despite vastly higher sales and profits — in a symbolic punch to the gut for the Blue Oval automaker.
Ford’s archrival GM faces its own stagnant stock price but has charted a clear path to a self-driving car, introduced a mass-market electric vehicle and struck a promising ride-sharing deal with Lyft, Kelley Blue Book analyst Karl Brauer said.
Ford has promised a self-driving car by 2021 after making a major investment in a self-driving car start-up, but “I don’t see an obvious pathway” to it, Brauer said.
Hackett will be charged with overhauling the company’s culture after he was credited with doing the same thing at Steelcase.
“Any time you go to a company like this, the culture is not gonna change overnight,” Sullivan said. “It’s been set in stone for a hundred years.”
Hackett said he’s here to stay, and he wants to make it fun for people to come to work.
“I think this culture of curiosity that I created at Steelcase” can be transferred to Ford, Hackett said in an interview.
Still, he may be a placeholder boss designed to keep the job for a few years while Ford identifies its long-term leader.
In a series of changes announced Monday, the company set up what could be a race to succeed Hackett among three people who will report directly to him, each with the title of president.
Jim Farley, Ford’s chief of Europe, Middle East and Africa, becomes president of global markets. Americas division chief Joe Hinrichs becomes president of global operations, with oversight including product development. And chief information officer Marcy Klevorn becomes president of the company’s mobility division.
Fields became CEO of Ford after several years in top leadership positions, including as president, chief operating officer and president of the company’s Americas division. He was instrumental in Ford’s North American turnaround during that stretch.
“Any time you go to a company like this, the culture is not gonna change overnight. It’s been set in stone for a hundred years.” Dave Sullivan, AutoPacific analyst