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Ford Motor CEO and President Jim Hackett will retire amid a $11 billion restructuring plan that failed to impress investors.
Hackett, 65, will be replaced by his alleged heir, Jim Farley, Ford’s executive leader, starting October 1. Farley, 58, will paint with Hackett about a “smooth transition of control over the next two months,” according to the company.
See also: how Ford’s new CEO, Jim Farley, hopes to woo Wall Street
The management’s replacement will make Farley the fourth CEO of the automaker since the Great Recession, which nearly bankrupted her a decade ago. Ford’s shares rose by almost 3% after Tuesday’s announcement, but abandoned some of the day’s earnings through afternoon trading.
Since he started running Ford in May 2017, Hackett, the former CEO of furniture company Steelcase, has done little to build confidence in the Wall Street automaker, an explanation for why his predecessor, Mark Fields, was overthrown after a period of less than 3 years. . Training
Ford’s stock has fallen by 40% on Hackett. The stock, which has a market of $26.1 billion, has fallen by 28% in 2020.
Hackett had not expressed any interest in retiring in the past. In February, amid a reorganization of control, he said, “I plan to remain in this position.” He cited a close relationship with Farley that “would realize the value” promised by the company.
Hackett said it was time to move to Farley, as the company had the impetus for the presentation of its recent products, adding the Ford Bronco and better-than-expected functionality for the coronavirus pandemic.
“The wind in our sails is actually starting to rise,” he told reporters in a call. “Jim (Farley) has played a vital role in this area, and I can be sure that the things they asked me to do really started to take root.”
Hackett has been criticized for its lack of transparency and leadership and for executing its multi-year restructuring plan to increase profitability by focusing on commodities and all-electric autonomous vehicles.
“Hackett had a chance. He was there for 3 years, not a type of car,” said David Kudla, a leading CEO and investment strata at Mainstay Capital Management in Grand Blanc, Michigan. “We struggled from the beginning with his vision of the company.”
Kudla, which closely follows the automotive industry, believes it is a “good decision” that will further motivate the company’s internal and external confidence.
Hackett will continue as the company’s special adviser until March, according to Ford.
“I’m very grateful to Jim Hackett for everything he’s done to modernize Ford and prepare to compete and win in the future,” Chief Executive Bill Ford said in a statement.
The old furniture won the favor of Ford, great-grandson of company founder Henry Ford, because of his reputation in Silicon Valley and his motivational skills.
The president praised Hackett for his leadership in the coronavirus pandemic, streamlined the automaker’s operations and formed a global partnership with Volkswagen. Hackett has also moved the company’s portfolio of products from passenger cars, among other internal actions. During the call with reporters, Ford promised a perfect transition to Farley.
Hackett chose Farley over Joe Hinrichs, a former Ford who left the automaker amid the restructuring of control, as his heir in February.
Farley said he is “optimistic” about the company’s expansion plans for its ad line, as well as emerging projects for autonomous and all-electric vehicles, adding the upcoming Mustang Mach-E crossover.
“We have to change the fences, ” he said. “Grow and grow where we are already strong.”
Farley joined Ford in 2007 as global head of marketing and sales. Since then, he has held positions, adding head of the luxury logo of the Lincoln automaker and various overseas operations, such as Europe and South America.
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