Ford Motor Company has appointed Jim Hackett as Ford Motor Company president and CEO, replacing Mark Fields, who is retiring, effective immediately. Hackett led Steelcase Inc.’s turnaround, served as interim Athletic Director at University of Michigan, and has led Ford Smart Mobility LLC since March 2016. He served on Ford’s board from 2013 to 2016.
Fields’s 3-year tenure as CEO, succeeding Alan Mulally, saw the share price of the automaker drop 39%. Ford’s US sales are down 5.1% year-to-date, with cars showing the steepest decline of 22.1%. Ford’s US hybrid and electric vehicle lineup—unchanged since 2013—has seen its sales volumes decline 10% from 2014-2016 to a combined 77,511 units in 2016 (with only 872 BEVs). At the annual shareholders’ meeting on 11 May, Fields had taken flak from investors over Ford’s share price and product performance.
Sharpening operational execution across the global business to further enhance quality and go-to-market strategy; product launch, while decisively addressing underperforming parts of the business.
- Modernizing Ford’s business, using new tools and techniques to unleash innovation, speed decision making and improve efficiency. This includes increasingly leveraging big data, artificial intelligence, advanced robotics, 3D printing and more.
Transforming the company to meet future challenges, ensuring the company has the right culture, talent, strategic processes and nimbleness to succeed as society’s needs and consumer behavior change over time.
Commenting on the ousting of Fields, Christian Stadler, Professor of Strategy at Warwick Business School in the UK, observed that:
Ford’s replacement of the CEO is unnecessary. The company was actually doing quite well in terms of profits. Only the share price was going in the wrong direction. This is obviously not a small point, but more of a reflection of unrealistic expectations. Fields was expected to turn a traditional car manufacturer into a mobility company matching the evaluation of such companies.
Ford has no plausible approach towards mobility and e-vehicles yet and lags behind GM in that respect, but the crucial point is that changing the CEO is not likely to change this. Ford falls into the trap of betting too much on one individual. Fields was also in a difficult position following celebrated CEO Alan Mulally who is credited with the turnaround of Ford, saving it from bankruptcy. Any successor would have struggled to meet expectation after that.
A new CEO is not likely to make a substantial difference in terms of fundamentals. In the short-term the likely successor Jim Hackett—the head of the mobility unit—could have a positive impact on the share price as he is a signal that this is the area the company wants to focus on. In the longer run Hackett will face the same challenges—i.e. Ford needs to make substantial progress in terms of self-driving cars and e-vehicles. He might do that well, but Fields would probably have taken similar steps.
Ford also shuffled its executive suite.
Jim Farley is appointed executive vice president and president, Global Markets. In this role, Farley will oversee Ford’s business units, The Americas; Europe, Middle East & Africa and Asia Pacific. In addition, Farley will oversee Lincoln Motor Company and global Marketing Sales & Service. Farley has served as executive vice president and president, Ford of Europe, Middle East and Africa since January 2015. Farley will also oversee the strategy and business model development for electrified vehicles and autonomous vehicles.
Joe Hinrichs is appointed executive vice president and president, Global Operations. In this role, Hinrichs will oversee Ford’s global Product Development; Manufacturing and Labor Affairs; Quality; Purchasing; and Sustainability, Environmental and Safety Engineering; Hinrichs has been serving as Ford executive vice president and president, The Americas, since December 2012.
Marcy Klevorn is appointed executive vice president and president, Mobility. In this role, Klevorn will oversee Ford Smart Mobility LLC, which was formed last year to accelerate the company’s plans to design, build, grow and invest in emerging mobility services, as well as Information Technology and Global Data, Insight and Analytics. Klevorn has served as group vice president, Information Technology and Chief Information Officer since January 2017.
These three appointments are effective 1 June. New execs to succeed Hinrichs, Farley and Klevorn will be the subject of a future announcement.
In addition, Ford appointed Mark Truby vice president, Communications, effective immediately, reporting to Bill Ford. He was also elected a company officer. Truby has previously led Ford’s Communications teams in Asia Pacific and Europe, Middle East & Africa. Truby succeeds Ray Day, who plans to retire from the company next year and will provide consulting services until then.
Ford also elected Paul Ballew as Global Chief Data and Analytics Officer, reporting to Klevorn. Ballew has been leading Ford’s global data and analytics teams since December 2014, including development of new capabilities supporting connectivity and smart mobility.