Updated 4:15 p.m.
Cleveland, Ohio – Ford Motor Co. has fired CEO Mark Fields, leader of the automaker for the past three years, and replaced him with board member and head of Ford’s tech venture Jim Hackett.
A longtime Ford executive and architect of the company’s 2005-era restructuring plan, Fields’ tenure in the top spot has been rocky. Despite turning in record earnings in 2015, the automaker’s stock price has languished since 2014. Fields tried several initiatives to change that, ranging from big investments in autonomous vehicle technology and mobility startups to stock repurchases. However, stock prices remained low.
Ford’s value declines, coupled with growth in interests for companies with more investor appeal, have pushed Ford to No. 3 in market value for U.S. automakers, behind GM (No. 1) and Tesla (No. 2), despite the fact that Ford sells far more cars than Tesla and is solidly profitable while Tesla is still losing money.
Ford’s near-term prospects didn’t show a lot of room for improvement. Fields has warned investors in recent weeks that 2017 didn’t hold a lot of growth promise for Ford as rollout costs for new vehicles are expected to lower earnings. In recent weeks, investors have questioned Fields’ strategies for further growing the automaker.
“Mark Fields has been an outstanding leader and deserves a lot of credit for all he has accomplished in his many roles around the globe at Ford," Ford Chairman Bill Ford said. “His strong leadership was critical to our North American restructuring, our turnaround at the end of the last decade, and our record profits in the past two years."
Bill Ford said he decided to replace Fields with Hackett on Friday in hopes of revitalizing the company and focusing on the future. During a conference call with reporters and analysts, Bill Ford focused on Hackett’s vision for the future of mobility and his ability at previous companies to focus on operational excellence. Hackett served as Steelcase furniture's CEO for more than two decades and helped transform that company as office furniture demands changed with technology.
”He’s a proven transformational leader. He’s a visionary thinker. He and I think very much alike,” Bill Ford said. “He can integrate future thinking into an operation and help seamlessly deliver a future that has been envisioned. “
Bill Ford said Hackett’s appointment should spur more innovation at the automaker. The former Steelcase furniture chief executive became executive chairman of Ford Smart Mobility LLC a little more than a year ago.
”The future is not a fantasy,” Hackett said, adding that Ford engineers are watching trends such as 3D printing, autonomous vehicles, electric vehicles, lightweight materials, and others. “We’re triangulating all of these forces to try to come up with a competitive set about where we’re going to play and how we’re going to win.”
A longtime friend of Bill Ford’s, Hackett says he and the chairman are optimistic about Ford’s opportunities to develop new technologies, but the company still needs to focus on producing solid earnings.
“The license you get to make changes comes from your care of where the earnings come from,” Hackett said.
Fields rose to prominence at Ford in the early 2000s when he ran Mazda, a Japanese automaker that Ford partially owned at the time. There, he cut costs, increased sales and revitalized a struggling business. He returned to Ford in 2002 and was put in charge of an initiative to transform an automaker that was losing billions of dollar each year.
In 2005, he launched the Way Forward restructuring program that emphasized lowering costs, better using global resources, matching production with demand, and spending heavily on design and engineering. Using the “Change or Die” motto, Fields spent more than a year pitching his transformation vision to employees worldwide.
In 2006, when Bill Ford hired former Boeing executive Alan Mulally to run Ford, Mulally adopted Fields’ Way Forward program as his transformation template. Fields also added a financing provision to the turnaround plan, borrowing billions of dollars before the 2008 financial collapse. Fields’ transformation plan coupled with Mualally’s financing – called the One Ford strategy – allowed Ford to avoid the government-sponsored bankruptcy bailouts that General Motors and Chrysler needed in 2009.
Hackett said he has a lot of respect for Mulally’s One Ford strategy, and “We’re going to use parts of it in the way we monitor our success. What it doesn’t do as well, it doesn’t handle when there are lots of complex strategy questions.”
He added that his focus will be on making decisions more quickly by handing off more authority to several top executives. In addition to Hackett’s appointment, company officials announced new roles for three key leaders.
- Jim Farley: executive vice president and president, Global Markets
- Joe Hinrichs: executive vice president and president, Global Operations
- Marcy Klevorn: executive vice president and president, Mobility
Hackett’s appointment will make him the second person in the past 10 years to take the top spot at Ford from outside of the auto industry.
Fields’ ouster did not have an immediate impact of Ford’s stock early Monday. Shares remained less than $11 per share, near the company’s 52-week low.
About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 17 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.