Ford replaces chief executive Mark Fields as car maker bids to turn fortunes around

Ford shares fell 37 per cent during Fields’s almost-three-year tenure, dropping the company’s market capitalisation to below Tesla

Mark Fields (pictured) will be replaced by Jim Hackett, a turnaround specialist who has been leading the car manufacturer’s moves into self-driving cars (Reuters)

Ford is replacing embattled chief executive Mark Fields with Jim Hackett, a turnaround specialist who has been leading the car manufacturer’s moves into self-driving cars and ride sharing.

Mr Fields, 56, is retiring and Mr Hackett will move up from his position as head of Ford’s Smart Mobility unit, according to a statement. Mr Hackett, 62, revived office-furniture maker Steelcase as chief executive from 1994 to 2014.

Mr Fields came under pressure from Ford’s board this month ahead of an annual shareholder meeting where investors excoriated management for a poorly performing stock price. Ford shares fell 37 per cent during Mr Fields’s almost-three-year tenure, dropping the company’s market capitalisation to below Tesla. The company announced a salaried-worker buyout programme last week to show it was moving to cut costs.

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“It’s surprising how quickly Fields is being replaced,” said Stefan Bratzel, director of the Centre of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. “Ford isn’t exactly in crisis, but this development shows that shareholder value is more in focus,” even as carmakers face pressure to invest in technology where the payoff is uncertain.

Ford also will shuffle the direct reports beneath Mr Hackett, with Europe chief Jim Farley adding responsibility for the Americas and Asia Pacific regions and overseeing the Lincoln luxury brand. Joe Hinrichs, who had been leading the Americas, has been appointed president of global operations and will oversee areas including product development, manufacturing, labour, quality, purchasing and sustainability. Marcy Klevorn will take over Ford Smart Mobility after serving as chief information officer since January.

Ford shares rose 1.3 per cent to $11.02 in New York on Monday in early trading. The stock had dropped 10 per cent by Friday's close, trailing the 6.4 per cent gain for the S&P 500 Index.

Mobility Services

Mr Hackett joined Ford’s board of directors in 2013 and was appointed chairman of Ford Smart Mobility in March 2016. The unit was formed to accelerate Ford’s foray into emerging mobility services.

For two decades, Hackett guided Grand Rapids, Michigan-based office furniture maker Steelcase. He was recognised for predicting the office landscape would shift away from cubicles to an open-space environment and transformed the traditional manufacturer of office furniture, according to a profile on Ford’s website.

“Jim Hackett is the right CEO to lead Ford during this transformative period for the auto industry and the broader mobility space,” executive chairman Bill Ford said in the statement. “He’s a true visionary who brings a unique, human-centred leadership approach to our culture, products and services that will unlock the potential of our people and our business.”

Steelcase Overhaul

Mr Hackett led a major reorganisation that involved deep cuts in Steelcase’s workforce, including personally pink-slipping the best man from his wedding, according to Automotive News. After Steelcase, Mr Hackett served as interim athletic director of the University of Michigan at a time of turmoil and hired Jim Harbaugh to return the football team to its winning ways.

Ford’s board scheduled extra meeting time two weeks ago to drill Mr Fields on his plans for reversing the company’s fortunes, a person familiar with the discussions said earlier this month. As chief executive, he was pouring billions into self-driving cars and ride-sharing experiments as its traditional-car business has struggled more than General Motors Cwith a slowing US market.

“Ford’s reputation with the investor community with respect to the secular pressures is that they are throwing a lot of things at the wall,” Joe Spak, an analyst at RBC Capital Markets, wrote in a report Monday. “They are doing a lot. Some of it may be smart. But the overall communication hasn’t been great. A simpler message may be needed.”

Mark Truby, who’s been overseeing Ford’s communications in Asia, will take over the department and succeed Ray Day, who plans to retire from the company next year.

Tough Situations

Mr Fields joined Ford in July 1989 and helped steer its businesses through several tough situations before he was named to the top job in July 2014.

In 2000, Mr Fields became chief executive of Mazda, in which Ford had a controlling stake at the time. He led a turnaround at Mazda with several Ford executives with whom he later worked to revive the US automaker’s North American business.

After being promoted to chief operating officer in December 2012, Fields took over as chief executive from Alan Mulally, the former Boeing executive who led Ford through the global economic crisis and avoided the bailouts and bankruptcies that befell GM and Chrysler.

Mr Fields was leading an overhaul of Ford’s business model so the company could take on self-driving cars from the likes of Alphabet Inc.’s Waymo and Uber Technologies Inc. He warned the cost of investing in new technologies would reduce profits last year and this year before rebounding in 2018.

Ford’s first-quarter adjusted earnings fell 42 per cent, while GM appears on pace for another record annual profit. Net income at Ford plunged 38 per cent last year.

Bloomberg