New Ford CEO is named after announcing Mark Fields will retire to make room for the next “visionary” era at Ford Motor Company.
After 28 years at Ford Motor Company, CEO Mark Fields will be retiring. During his last three years with the automotive giant, Fields kicked off the major transition from traditional automaker into a mobility company.
Fields came under fire from investors and Ford’s board, as Ford’s shares dropped 40 percent since he became CEO in 2014. Both noted a lack of expansion in the company’s core auto business and stunted growth when it came to developing the next era of tech-oriented cars.
It wasn’t easy for Mark Fields to become the successor to former Ford CEO Alan Mulally. Mulally was considered an industry outsider who came on board in 2006—when Ford was on the brink of bankruptcy. Mulally was poached from Boeing and thanks to his leadership, he was able to put a stop to internal bickering, and streamline manufacturing at Ford.
Mark Fields was responsible for laying out the blueprint for autonomous vehicles, ride-hailing plans, and car-sharing services. He resurrected Ford’s luxury Lincoln brand, grew sales throughout China, and bet on using aluminum in Ford’s trucks for improved fuel economy and stronger sales. Mark Fields opened an office in Silicon Valley focused on hiring young research talent while scouting promising startups.
During 2015, Ford achieved a record pretax profit of $10.8 billion as SUV and truck sales boomed throughout the U.S.
JUST IN: Ford pushes out CEO Mark Fields, to be replaced by Jim Hackett, source tells AP https://t.co/c59xAbtO9v pic.twitter.com/phIxstekxd
— Bloomberg (@business) May 22, 2017
Popular Ford products are growing dated—take the Fusion sedan, for example. Ford remained behind rivals in the race to bring long-range electric cars to the market. Stock prices dropped while Tesla Inc. lapped Ford in market value.
Ford Motor Co. Executive Chairman Bill Ford says Mark Fields was an “outstanding leader” who wasn’t fired, citing Fields as the force behind Ford’s turnaround 10 years back. (This was while Fields 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. People can speculate all they want about that. But the fact is, he is (retiring), and I feel we’ve got a great leader in Jim,” said Bill Ford.
Jim Hackett: Cultural Change Agent
Fields will be replaced by Jim Hackett, who has been on Ford’s board since 2013. Hackett was the former CEO of Steelcase Inc., one of the largest office furniture companies in the world.
During his time with Steelcase, he predicted a shift away from cubicles and into open office plans. This was a massive transformation for the company, requiring thousands of jobs to be cut and relocating production from the U.S. to Mexico.
“We have to modernize the business,” Bill Ford stated, and “Move decisively to address underperforming areas.”
Bill Ford believes Hackett is a “visionary” who knows how to remake a business and the right person to lead Ford during its expansion into new business areas.
“These are really unparalleled times, and it really requires transformational leadership during these times,” Bill Ford said.
“Part of the job,” he pointed out, “Will be to teach and groom the next generation.” The job won’t come without obstacles, as the entire industry breaks away from tradition to develop new means to manufacture—like producing parts via 3D printing—and new types of transportation, such as autonomous cars.
Hackett has a vision for quicker decisions with a limited group of top executives to ensure a faster turnaround. “That frees teams of people that are below the top executives to really fly,” Hackett said.
“This is a time of unprecedented change. A time of great change requires a transformational leader, and thankfully we have that in Jim.” -Bill Ford
Other Moves
Additionally, several Ford executives will begin new roles in early June:
- Jim Farley, the Head of Ford’s European division who is largely responsible for recent profitability, will become Vice President of Global Markets He will oversee Lincoln’s sales and marketing.
- President of Ford’s Americas division, Joe Hinrichs, will oversee global product development, manufacturing, and quality.
- Ford CTO Marcy Klevorn will take over Hackett’s role as head of Ford Smart Mobility LLC, the company’s future mobility unit.
The Transformative Future of Ford
To add fuel to the fire, last week, Ford announced 1,400 staff positions in North America and Asia would be cut. Also, Ford keeps manufacturing small vehicles, despite the lack of profitability. Global buyers are compelled to purchase SUVs and small cars are less and less in demand.
Ford’s 2017 U.S. sales are down, and it definitely doesn’t help that the company isn’t offering any products in popular segments like subcompact SUVs and midsize pickups.
In the electric vehicle market, General Motors’ Chevrolet Bolt electric car—boastin 238 miles of range—went on sale last year. Ford’s electric SUV with 300 miles of range has been in the works, but won’t be on sale until 2020.
With Ford’s announcement of Jim Hackett’s new role came a vow to “catch up in the race to build self-driving cars and define a new era in personal mobility.” They will also be replacing their head of communications. All these moves have translated into developing increased shareholder value. As of this morning, shares have already risen as much as 2.4 percent, the biggest intraday surge for the company in a month.
It is an essential time for automotive companies to find their footing as they face uncertain payoff n tech investments and newfound competitors at Google, Uber, and more tech companies.
