- Ford said CEO Jim Hackett will retire in October, and be replaced by COO Jim Farley.
- Ford Chairman Bill Ford said that the company didn’t do “deep dive” to find a new CEO outside the 117-year-old carmaker.
- Hackett took over as CEO in 2017 and had been leading an $11-billion restructuring of Ford’s business.
- Hackett, 65, said that he had started thinking about retiring in spring and that the time was now right as Ford has “wind in our sails” after several successful product launches, including a new Bronco SUV.
- Ford’s stock price has declined almost 40% since 2017 when Hackett took over from Mark Fields.
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Ford CEO Jim Hackett is retiring, to be replaced by COO Jim Farley, the automaker announced Wednesday. Farley was also elected to the Ford board of directors.
“I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future,” Bill Ford, the carmaker’s executive chairman, said in a statement.
“Our new product vision – led by the Mustang Mach-E, new F-150 and Bronco family – is taking shape. We now have compelling plans for electric and autonomous vehicles, as well as full vehicle connectivity. And we are becoming much more nimble, which was apparent when we quickly mobilized to make life-saving equipment at the outset of the pandemic.”
Farley’s appointment becomes effective October 1.
Hackett stepped into the CEO role in 2017, taking over for Mark Fields. He had been leading an $11 billion restructuring of the 117-year-old automaker. There has been speculation in the auto industry about how long he would remain in the top job at Ford, especially after former COO Joe Hinrichs left earlier this year, following a 19-year career with Ford.
That move was seen as clarifying a succession plan for the automaker, with Farley next in line when Hackett retired.
For Hackett, the timing was everything.
“It just hit me in the spring,” Hackett, 65, said on a conference call with reporters. He said when he asked himself when the right time to retire would be, his answer was, “Let’s do it now, with the wind in our sails.”
Ford recently reported coronavirus-impacted second-quarter earnings that were better than Wall Street expected. The company had also brought in more than 150,000 reservations for its Bronco SUV. But the company’s stock price had declined nearly 40% since 2017, hitting lows of almost $4 per share in March before recovering in the aftermath of a total shutdown of US and European manufacturing operations due to the COVID-19 crisis.
An orderly transition — and no “deep dive” for a leader outside of Ford
Ford said that Hackett and Farley will work together to ensure an orderly transition and that Hackett will remain as an advisor through March of 2021.
“My goal when I took on the CEO role was to prepare Ford to win in the future,” Hackett said in a statement. “The hardest thing for a proud, long-lived company to do is change to meet the challenges of the world it’s entering rather than the world it has known. I’m very proud of how far we have come in creating a modern Ford and I am very optimistic about the future.”
Hackett’s legacy at Ford involves the adoption of principles based on “design thinking” and “human-centric design,” idea he developed when he was CEO of furniture maker Steelcase.
“After being in the industry for decades as a product planner, I thought I knew a thing or two,” said Farley, 58, who came to Ford in 2007 after a career at Toyota.
But Hackett’s guidance “forever changed us as leaders at the company,” he added. “We’re all in. In what you’ll see in the next generation of vehicles. That was all informed by what Jin gifted us with. I can’t imagine Ford without it.”
Bill Ford said that the company, founded by his great-grandfather, Henry Ford, “didn’t do a deep dive externally” in the search for a new CEO.
“We clearly talked about taking a look outside,” he said. “But everybody was inspired by Jim Farley’s leadership.”
He added that “sometimes going outside is right,” citing both Hackett and Alan Mulally, the former Boeing executive who joined Ford prior to the financial crisis and as CEO helped the company avoid the government bailouts and bankruptcies than befell General Motors and Chrysler in 2009.
“But there’s strength in continuity, and the board felt we were in the right path,” he said.
Ford had been shuffling its management since 2019 as part of Hackett’s turnaround, which focused on improving the carmaker’s “fitness,” in his words. That process, according to Bill Ford, has come to an end.
“Management changes are largely up to Jim Farley,” he said. “But I wouldn’t expect big surprises.”
Ultimately, Bill Ford praised Hackett for his contribution to Ford’s reinvention — an undertaking that has intensified as upstarts such as Tesla have surged past Ford in financial value (Tesla is now worth more, at $267 billion in market capitalization, than Ford, GM, and Fiat Chrysler Automobiles combined).
“Jim never sought credit, and he doesn’t get enough,” Ford said. “He cared more about Ford’s reputation than his own.”
This story is developing.