Ford CEO Fields replaced; new CEO Hackett known for turnarounds
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Ford is replacing CEO Mark Fields as it struggles to keep its traditional auto-manufacturing business running smoothly while remaking itself as a nimble, high-tech provider of new mobility services.
The 114-year-old automaker said Fields is retiring at age 56 after 28 years at the company. Fields will be replaced by Jim Hackett, a former CEO of office furniture company Steelcase Inc. who joined Ford's board in 2013. Hackett has led Ford's mobility unit since March of last year.
In a press conference Monday at Ford's Dearborn headquarters, Hackett said Ford does a lot of things well, but is not as good at handling complex strategy questions. Hackett plans to have a small executive team that can set the company's plans, communicate them clearly and make decisions quickly. That's a contrast to Fields, who had 20 direct reports and was a product of Ford's bureaucratic culture.
"The biggest challenge I had (at Steelcase), and I will have here, is to have everybody see the future. They can see their opportunity in that. And secondly, that it's our right to win and we don't have to cede that to anybody, Tesla or any of them," Hackett said. "I love that challenge because I know how to do that."
In three years as CEO, Fields began Ford's transition from a traditional automaker into a "mobility" company, laying out plans to build autonomous vehicles and explore new services such as ride-hailing and car-sharing. Silicon Valley companies such as Google were pushing into the car business, while Uber and Lyft threatened to change people's attitudes toward car ownership. In fact, it was Fields who put Hackett in charge of those projects as head of mobility.
Under Fields, Ford achieved a record pretax profit of $10.8 billion in 2015 as SUV and truck sales soared in the U.S. But there were rumblings that Fields wasn't focused enough on Ford's core business. Popular products like the Fusion sedan and Escape SUV grew dated. Ford lagged behind rivals in bringing long-range electric cars to the market. Ford couldn't pivot quickly; when subcompact SUV sales boomed in the U.S., for example, it didn't bring over a small SUV being sold in other regions. The stock price sagged — electric car maker Tesla Inc. even passed Ford in market value earlier this year.
Former Ford President and CEO Mark Fields. Photo / AP
Ford's shares jumped nearly 2 percent to $11.06 in morning trading. The company's stock price has fallen almost 40 percent since Fields became CEO in July 2014.
Hackett was the CEO of Steelcase for 20 years. He is credited with transforming that company, in part by predicting the shift away from cubicles and into open office plans. He cut thousands of jobs and moved furniture production from the U.S. to Mexico to stem massive losses at the company.
In an interview, Ford Motor Co. Executive Chairman Bill Ford called Hackett a "visionary" who knows how to remake a business.
"These are really unparalleled times, and it really requires transformational leadership during these times," Bill Ford said.
Hackett also served as the interim athletic director at the University of Michigan from 2014 to 2016. In that role, he lured star football coach Jim Harbaugh.
Bill Ford insisted that Fields wasn't fired. He called Fields "an outstanding leader" who orchestrated the company's turnaround a decade ago when he was head of Ford's Americas division.
"He and I sat down Friday and really decided this was the right time for him to go and for us to have new leadership," Bill Ford said.
Fields resurrected Ford's luxury Lincoln brand and grew sales in China. His bet on using aluminum for Ford's trucks paid off in terms of better fuel economy and strong sales. Fields opened an office in Silicon Valley to hire talented young researchers and scout out promising startups.
But investors worried about Ford's sliding U.S. market share and product decisions. U.S. sales are plateauing after years of growth, and Ford has been losing share in that all-important market. Unprofitable small cars have chipped away at some of the profit from SUVs. And in the electric car market, General Motors put the Chevrolet Bolt, with 238 miles of range, on sale last year; Ford is working on an electric SUV with 300 miles of range, but it's not due out until 2020.
Meanwhile, Mary Barra — who became GM's CEO about six months before Fields became Ford's — has made a series of headline-grabbing moves, such as forming a partnership with the ride-hailing company Lyft and pulling GM out of unprofitable markets, including Europe, India and South Africa. Even though GM shares are trading a few cents below the $33 initial public offering price from November 2010, the board appears satisfied with Barra's performance.
Hackett is confident he can placate and discontent on Wall Street.
"The way that that gets fixed is the nature of the innovation and the ideas making their way into the market," Hackett said. "It even sounds a little corny but the stock price is a consequence of the actions we're going to take to make the company more fit, more profitable and a more fun place to work."
Barclay's analyst Brian Johnson predicts more emphasis on cost-cutting under Hackett. GM has exceeded Wall Street's profit expectations, while Ford's results have been softer. Ford needs to turn that around for the share price to grow, Johnson said.
Fields also had the tough job of following CEO Alan Mulally, another auto industry outsider who was hired away from Boeing to lead Ford. Mulally, who joined Ford in 2006 when it was near bankruptcy, was widely credited with ending internal bickering at Ford and streamlining manufacturing.
As part of the shake-up, several Ford executives are taking on new roles as of June 1. Jim Farley, who led the company's European division back to profitability, will become vice president of global markets and will oversee Lincoln, sales and marketing. Joe Hinrichs, president of Ford's Americas division, will oversee global product development, manufacturing and quality. Marcy Klevorn, Ford's chief technical officer, will oversee a new mobility division.