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Since Jim Hackett Ford CEO in 2017, investors have sent a transparent message about their lack of confidence in the automaker’s future, bringing their percentages from $11 to the start of their term to $7 when markets opened on Wednesday. Ford’s percentage value follows that of General Motors ($26, Wednesday morning), Fiat Chrysler ($11), Tesla ($1505) and even Nikola ($33), an electric van is launched that does not plan to start production of its first vehicle until next year.
But Wall Street skepticism doesn’t mean Hackett, who announced Tuesday that he would retire in October and be replaced through Chief Operating Officer Jim Farley, has overlooked Ford’s future. Under his leadership, Ford has taken promising steps to prepare for a globalization in which cars will be autonomous, electric and connected, two automotive industry experts told Business Insider.
“At least in those areas, Ford, I think, he’s done pretty well,” said Michael Ramsey, Gartner analyst.
While Ford appears to be lagging behind GM in electric vehicles, automated driving generation and vehicle connectivity, it has taken promising steps in those areas. Hackett said, Ramsey said, that it was sensible to dedicate Ford to install on all long-term vehicles, starting in 2022, a generation that will allow them to talk to each other and with the nearest traffic infrastructure. That year, Ford also plans to begin operating autonomous transportation and delivery facilities driven through the Argo AI automated driving formula of commissioning. Ford invested $1 billion in the company in 2017 with Hackett’s predecessor, Mark Fields, but it was Hackett who reinforced that investment by negotiating a large-scale partnership with Volkswagen that allowed Argo to raise $2.6 billion from the German automaker.
Volkswagen’s agreement also gives Ford access to its partner’s electric vehicle platform, preventing Ford from having to expand one from scratch. Ford has not been very successful with its electric vehicle strategy, which has been less competitive than GM’s, said Michelle Krebs, an analyst at Cox Automotive. In addition to introducing its own electric vehicle platform, GM is building a plant that will create a battery joint venture with LG Chem, a resolution that Ford has not yet matched. But GM’s resolution may not necessarily be more lucrative than Ford’s relative caution, Krebs said, even if he now seems smart. There is still a great deal of uncertainty as to the extent to which consumers will adopt electric vehicles, which accounted for less than 3% of the global automotive market in 2019.
“I think they’re very careful, ” said Krebs.
The explanation for why investors did not respond to Hackett’s movements would possibly lie in his inability to link them in a transparent and convincing view, Ramsey said. Hackett’s discursive communication style, which rarely has its own employees, contrasts with that of Alan Mulally, the executive hired to drive Ford through the Great Recession in the component through the transparent establishment of his priorities, Ramsey said.
Hackett, who led Ford’s mobility department before becoming CEO, can nevertheless be remembered as a transitional figure who has begun a reinvention to be completed by his successors. In a convention call Tuesday after the CEO’s announcement, Executive Chairman Bill Ford described Hackett as a type of table coach for Farley, who will be assigned the task of developing his predecessor’s efforts.
“I asked Jim to help modernize Ford and start a transformation that would radically replace our business,” Ford said. “We have a lot of paintings ahead of us to accomplish our mission, but thanks to Jim, we are a very different company today than we were 3 years ago.