Retiring Ford CEO Jim Hackett and current COO Jim Farley
When Jim Hackett was brought in to replace Mark Fields as CEO just over three years ago, he was never expected to have a particularly long tenure. He was already 62 and had served and retired as CEO of Steelcase
Hackett’s tenure has been tumultous to say the least and many on the outside have complained of not really seeing any clear and compelling vision. Over the past three years, Ford’s stock price has sunk to levels last seen a decade ago, the company has largely gotten out of the car business in North America and its financial position has degraded significantly. One of its most important products, the Explorer had a very rocky launch in 2019 and the first half of this year has seen the entire economy rocked by a fatally mishandled pandemic.
Nonetheless, below the surface, a lot of change was happening, particularly with the way Ford develops its products. The clearest example of that yet is the Mustang Mach-E. In the opening months of Hackett’s tenure, all future programs were evaluated and the electrification plan that had been set up under Fields was found significantly lacking and deemed unlikely to succeed. Hackett established Team Edison to rethink how Ford could build a successful business around electric vehicles, something no in the industry had yet done with the possible exception of Tesla
With Farley as one of his two chief liuetenants along with Joe Hinrichs, many aspects of Ford’s business were pivoted. The Explorer launch which was expected to help swell the Ford coffers was a disaster and Hinrichs has since elected to retire as well. But Farley, who had been overseeing Ford’s future business strategy was promoted to COO.
The next 12-18 months will likely prove to be pivotal if Ford is to survive and thrive. The company has put plans in place to make the transition to a company that builds on its strengths in trucks, utilities and commercial vehicles and add a substantial services component. So far while Ford has dabbled in a variety of mobility services offerings including Chariot and Spin scooters, none has yet been profitable.
Whether it can take the lessons learned from those efforts and its experiments in Miami and elsewhere with automated driving and turn that into a sustainable business remains to be seen. During the conference call announcing the transition, Farley emphasised that he plans to continue navigating the course that has been set out by Hackett, executive chairman Bill Ford and himself.
Farley has been on the track to the top job at Ford almost since he arrived from Toyota in 2007. After missing out to Fields and then Hackett he now has that job. While his resume is impressive, he and the team have to execute.
At the time Alan Mulally retired in 2014, it seemed that he had instilled some fundamental cultural changes in the company. By the time Fields departed three years later, it seemed that Ford had reverted back to many of its bad old ways. I’ve had a number of conversations with Jim Farley over the past dozen years and his intentions are undoubtedly to make the changes stick. But he is just a single individual in a very large organization and change can fall apart rapidly.
