Detroit - Ford Motor Company is replacing chief executive Mark Fields with James Hackett, the head of the unit developing self-driving cars, the US car maker said yesterday, responding to investors’ growing unease over its stock price and prospects.
The abrupt departure of Fields, 56, who spent less than three years in the job, is among a series of management changes at Ford.
Hackett, 62, a former chief executive of furniture manufacturer Steelcase, will take the helm in a broader shake-up aimed at speeding up decision-making and improving operations.
Ford shares were up 1.4percent in early trading. At Friday’s close, they had fallen 37percent since Fields took over three years ago, at the peak of the US car industry’s recovery.
Now US sales are slipping, and Ford’s profits are trailing those of larger rival General Motors (GM), whose shares fell 13percent over the same period.
Executive chairperson Bill Ford Jr and the board have been unhappy with the company’s performance and sought reassurance that investments in self-driving cars, electric vehicles and ride services would pay off.
“With this transition, we are moving forward with great optimism,” Bill Ford said in an employee e-mail.
“We have the right team to sharpen our operational excellence, modernise our business, and develop and invent new business models for the future.”
Hackett, a former football player at the University of Michigan and interim athletic director, was named chairman of the car maker’s Ford Smart Mobility LLC subsidiary in 2016 to focus on emerging businesses that include ride sharing and autonomous vehicles.
Ford said in February it was investing $1billion (R13.21bn) in artificial intelligence company Argo AI to develop a virtual driver system for the car maker’s autonomous vehicle coming in 2021.
The upheaval at Ford underlines pressure on all three Detroit car makers to prove they can avoid losses as the US market begins to slow from last year’s record sales.
Fiat Chrysler is fighting diesel emissions-cheating allegations from US and California regulators following chief executive Sergio Marchionne’s failed bid to find a merger partner.
GM chief executive Mary Barra is fending off attacks from hedge fund Greenlight Capital, which wants to install three new directors and split the company’s stock.
Buybacks
In March, GM sold its money-losing Opel division to France’s PSA Group, effectively exiting Europe in a move Barra promised would free cash for share buybacks.
The shake-up at Ford may bring new scrutiny of its own plans in the region. Jim Farley, Ford's Europe chief since January 2015, will oversee all of the company’s regions, global marketing and sales, as well as its Lincoln Motor Company.
Joe Hinrichs, head of the Americas since December 2012, will manage global product development, manufacturing and labour affairs, purchasing, and environmental and safety engineering, while Marcy Klevorn, vice president of information technology and chief technical officer since January, will oversee Hackett’s Ford Smart Mobility.
The company is also replacing its head of communications.
Ford posted a record $1.2bn profit in Europe last year, but warned the impact of Britain’s vote to leave the EU would put a dent in 2017 earnings.
Fields, who earned $22.1million in 2016 and had a 28-year-career at Ford, also faced a clamour for share repurchases, which boost the value of stock, at the company’s annual meeting earlier this month. “Confidence is created by hard currency, not proclamations that are often qualified,” one investor said.
Ford said last week it would cut 1400 staff positions in North America and Asia, a small fraction of the 20000 job reductions some news outlets had reported were imminent.
Fields had outlined a variety of plans to confront challenges from technology companies such as Alphabet that want to control a future of autonomous, data-intensive vehicles.
“You have to have one foot in today but also one foot in the future,” Fields told reporters last month. “I think investors understand our strategy.”
Ford, who previously was chief executive before replacing himself in 2006 with Alan Mulally, is the great-grandson of company founder Henry Ford and has warned in recent months about the dramatic challenges facing the car maker.
Ford has churned out strong profits on his watch. - Reuters