Ford puts brakes on Fields’ tenure
CEO makes abrupt exit as U.S. automaker feels pressure to innovate, deliver profits
Bill Ford and his board needed an answer, and they needed it now: How was Mark Fields going to turn around Ford Motor Co.? The answer: he wasn’t. That was the sobering conclusion after a series of extraordinary meetings this month culminated Monday with an abrupt exit by Fields, whose nearly three-year tenure as chief executive left Ford struggling to keep pace with new technologies like self-driving cars and the relentless pressure from Wall Street to deliver profits now amid a slowing U.S. auto market.
It’s a stunning turnabout for Fields, a Ford insider who rose to the top only to lose the confidence of the board and investors over what has become one of the most pressing issues in the auto industry: how to navigate a new era of electrified, connected and selfdriving cars. Even praising tweets from U.S. President Donald Trump over Ford’s plans to keep jobs at home weren’t enough to deflect mounting criticism.
Replacing the embattled CEO will be Jim Hackett, a turnaround specialist who’s been leading Ford’s moves related to self-driving cars and ride sharing. His ascendancy was swift: Ford’s board huddled Friday, with Fields agreeing to resign in a meeting with Bill Ford afterward.
“We need to speed up our decision-making, we need to invest our capital where we can create value, and we have to move decisively to address underperforming areas,” Bill Ford said Monday.
Fields’s demise had been brewing for about six weeks, as the CEO oversaw a company drifting with regards to operational issues like quality, morale and profits, all while lavishing ever more attention on the high-tech needs of tomorrow, said a person familiar with the internal deliberations.
Fields and Bill Ford also grew apart as the CEO encroached on what was once the executive chairman’s domain: mapping out the future of mobility in a changing world, said the person, who asked not to be identified.
Ultimately, failing to take care of business today cost Fields his future at Ford.
Hackett, 62, made an impact on the great grandson of founder Henry Ford during a visit to Silicon Valley last February. Bill Ford says executives there greeted Hackett, the former CEO of office-furniture maker Steelcase Inc., with hugs.
“A number of them said to me, ‘my gosh he’s one of the real original thinkers that we know and you guys are really lucky to have him’,” Bill Ford told reporters. “To see Jim not only navigate that so well, but to be held in such high regard, it made an impression on me.”
Ford shares climbed 2.1 per cent to $11.10 Monday in New York and rose earlier as much as 2.4 per cent, the biggest intraday jump in a month. The stock had dropped 10 per cent through the close Friday, trailing the gain for the benchmark S&P 500 Index.
Hackett joined Ford’s board in 2013 and in March of last year was appointed chairman of Ford Smart Mobility, the unit formed to accelerate the company’s foray into emerging mobility services. He was CEO of Steelcase from 1994 to 2014.
There are a number of holes in Ford’s U.S. lineup that are indicative of the second-largest U.S. automaker’s need to make faster moves. With sport utility vehicles and truck models in greater demand in the U.S., the company didn’t announce until January that it would revive the Ranger mid-size pickup and Bronco SUV models. Dealers will have to wait until 2020 for both to be in the lineup.
Ford’s profits have been suffering relative to GM’s because the company hasn’t invested as much in larger SUVs, said Eric Noble, president of the CarLab, a consulting firm in Orange, California. GM dominates the market with models including the Cadillac Escalade, Chevrolet Tahoe and Suburban.
“They have given up tremendous market share almost exclusively to GM,” said Noble, who estimates GM makes about $20,000 apiece in profit on its big SUVs. Ford’s “neglect” of the Expedition and Navigator is “almost unforgivable at a time when SUVs are selling so well.”
Ford’s target for putting fully autonomous cars on the road also are a way off. The company is targeting 2021 for when it’ll deploy a fully self-driving vehicle lacking steering wheels, gas or brake pedals into a ride-hailing or sharing service.
A number of them said to me, ‘my gosh he’s one of the real original thinkers that we know and you guys are really lucky to have him.’