Ford Motor Co. named James Hackett as chief executive on Monday, responding to investors’ growing unease about the U.S. automaker’s slumping stock price and its ability to counter threats from longtime rivals and Silicon Valley.
David Shepardson and Joseph White of Reuters had the news:
Ford Chairman Bill Ford Jr., whose family effectively controls the U.S. No. 2 automaker, said he wanted Hackett to speed up decision-making and cut costs, but did not offer specifics on how the new CEO should change operations.
“The clock speed at which our competitors are working …requires us to make decisions at a faster pace,” said Ford Jr., who plans to take a more active role at the company, according to a person briefed on the matter.
Ford, which announced plans to cut 1,400 white-collar positions last week, is expected to look at further significant cost cuts in the next three to six months, according to company officials, speaking on condition of anonymity as the plans have not been finalized.
Hackett, 62, known as a turnaround expert who for the past year has led the Ford unit developing self-driving cars and related projects, replaces Mark Fields, 56, who spent less than three years as CEO.
Fields’ abrupt dismissal caught nearly all at Ford by surprise, but concerns about the company’s direction have been brewing for some time.
Ford, once the most financially secure of the ‘Big Three’ Detroit automakers, and the only one not to take U.S. government money in the U.S. auto industry bailout a decade ago, reported record profit in 2015, but now finds itself under pressure on all sides as overall U.S. auto sales fall.
Thomas Heath and Jena McGregor of The Washington Post report that the slowdown in car sales hurt the company:
Traditional auto companies have seen their share prices lag in recent years because investors believe the boom cycle — driven by historically low interest rates that bolstered auto sales — may be exhausted and that fast-changing technology presents an uncertain future. Ford may be down more than its counterparts, but some analysts think the change has more to do with the company’s founding family.
“Ford has one, very big shareholder,” said Matthew Stover, an analyst with Susquehanna Financial Group, referring to the extended Ford family. “The board and the Ford family thought, ‘We have ideas and we aren’t acting fast enough and we’re not getting enough credit.’ I don’t think it’s much more complicated than that.”
Despite its 14.6 percent share of the U.S. car and truck market in 2016, Ford’s market value of $44 billion has been surpassed by electric-car upstart Tesla at $50 billion. The U.S. auto market is expected to slow this year.
Hackett’s job will be to reinvent Ford into a new transportation company capable of prospering in a highly competitive and fast-changing business.
Joann Muller of Forbes reported that the CEO change was part of a broader executive shakeup:
Other executives will assume larger roles, including James Farley, president of Ford’s Europe, Middle East and Africa business, and Joseph Hinrichs, head of Ford North America, people familiar with the changes said.
Also leaving the company is Ford’s group vice president of communications, Ray Day, who will be replaced by Mark Truby, vice president of communications for Ford’s Asia-Pacific operations.
The shakeup is a result of Executive Chairman Bill Ford and the rest of the board losing confidence in Fields’ leadership, according to people familiar with the board’s thinking. Fields replaced Alan Mulally in mid-2014, but lacked his predecessor’s ability to rally employees around a common mission or to make critical decisions about the company’s strategy.
“Without Alan, it’s back to the inmates running the asylum,” said one insider.
Directors were increasingly alarmed by the deterioration in Ford’s business, despite hefty profits from its flagship F-series pickup truck line, said people familiar with the board’s thinking.
A Ford spokesman would not confirm that any management changes were forthcoming. “We are staying focused on our plan for creating value and profitable growth. We do not comment on speculation or rumors,” the spokesman said.
