Lagging in innovation, Ford ousts its CEO
New leader was head of nascent division devoted to autonomous vehicles
DEARBORN, Mich. — Ford Motor Co. was the American automaker savvy enough to avoid bankruptcy when industry sales collapsed during the 2008 financial crisis. Then it rode economic recovery and cheap gasoline to record sales and profits. But what looks like success can turn upside down quickly in Detroit these days.
The latest evidence came Monday when Ford ousted its chief executive, Mark Fields, after only three years in the job. Fields had failed to persuade investors and his own board that the company was moving fast enough to develop the vehicles of the future, like battery-powered cars that drive themselves.
Industry stalwarts such as Ford, General Motors and Volkswagen are no longer the only automotive trendsetters. Now they share that distinction with interlopers from the tech world like Google, Apple, Uber and not least Tesla, the electric-car maker now valued more highly than any of the Detroit giants.
The upheaval at Ford, the nation’s No. 2 automaker by sales, after GM, reflects the challenges that lie ahead for companies that cannot adapt to that new landscape fast enough.
“Our world has changed dramatically,” said William C. Ford Jr., Ford’s chairman and great-grandson of its founder. “Look at the pace of change and the competitors coming into our space, and we need to match or beat that.”
Fields, a 28-year veteran of Ford, was a victim of rapidly evolving expectations for carmakers that for decades had been judged on how many vehicles they could manufacture and sell at a profit.
And by tapping a new chief executive, Jim Hackett, from outside the ranks of automotive veterans, Ford served notice that it was determined to be a leader in a new era of personal mobility.
Hackett, 62, made his reputation as the head of Steelcase, an office-furniture maker based in Michigan. There, he built credibility in Silicon Valley for adapting workplaces to fit the needs of legions of computer programmers and other tech workers.
Since last year, he has been in the middle of the automotive revolution as the head of Ford’s nascent division devoted to autonomous vehicles and new forms of personal mobility like ride-hailing services.
One of Hackett’s first tasks will be to demonstrate that progress, and change perceptions that Ford is behind not only Tesla and Google, but also traditional rivals like GM that are testing prototypes of autonomous cars.
Fields had been under pressure for months from Ford’s board to sharpen the company’s strategy on future technologies and reverse what had been a 40 percent drop in its stock price since 2014. He also became embroiled in controversy over a $1.6 billion plant the company was planning to build in Mexico to assemble small cars.
When President Donald Trump was campaigning for the Republican nomination and criticizing U.S. companies for moving factories to Mexico, Fields defended the company’s expansion plans there. But once Trump was elected, Fields was forced to backtrack, and he ultimately canceled the project.
William Ford also felt the need to step in and smooth the testy relationship by speaking directly to Trump. While it hardly affected the company’s overall performance, the Mexico episode may have distracted Fields from corporate issues.
And with the U.S. auto market starting to decline after peaking last year, Ford’s profits were also dropping — more than 30 percent in the first quarter alone.