May 22, 2017 — Coming off its second most profitable year ever, Ford Motor Co. has decided to replace its CEO and President Mark Fields. The announcement is expected this morning, according to numerous media reports breaking Sunday night.
Jim Hackett, former board Ford member and current head of the automaker’s mobility division, is being named as Fields’ replacement. Hackett led Steelcase for nearly 20 years before becoming the interim athletic director for the University of Michigan, where he hired the current football coach, Jim Harbaugh.
On the surface, the move would have been unthinkable a few months ago. But Fields’ never gained the confidence of Wall Street or the company’s employees, many of whom privately questioned his tactics of moving the company into the new era of “smart mobility.”
Over the last several months, investors were becoming less confident in Fields’ ability to navigate the company through a downturn, which may already be starting. Ford’s profits are healthy, but currently are reliant on trucks and SUVs. The company, though, has lost market share in the last year.
Ford, over the last two years, has invested billions of dollars int “smart mobility” initiatives, but the automaker may not see a return on those initiatives for years. Meanwhile, the stock price plummeted under Fields’ tenure dropping by nearly 40% since he replaced Alan Mulally in 2014.
Headlines are good, but investors and the board were seeing little in the way of growth prospects for the automaker. And Fields has not been able to communicate how the new initiatives would drive profitability for the automaker. Following a board meeting with Fields two weeks, it became apparent to the board that it needed to move into a new direction.
Under Hackett, don’t be surprised if the company shifts away from a more global focus, leaving areas such as India and Russia, following General Motors’ lead. The company also needs a less disjointed focus on “smart mobility.” But it will be a balancing act for Ford, as it is for GM — how to not get left behind by companies such as Alphabet or Tesla, but yet maintain growth and profitability.
Also, look for Hackett to refocus the company on a central mission in an attempt to rally the troops.
Fields also is a victim to timing. Replacing the revered Mulally was never going to be easy. But the culture has languished in Dearborn since he left. We’ll see both Joseph Hinrichs, head of Ford North America, and Jim Farley, president of Ford’s Europe, Middle East and Africa business, take on increased roles at the company.
There may also be other announcements of other moves in coming weeks.