Detroit – Ford has announced the departure of Chief Executive Mark Fields in a broad management shake-up that will see 62-year-old James Hackett taking the helm. Hacket, who Ford describes as a "transformational business leader", previously headed up Ford's autonomous vehicles unit.
Ford shares are down nearly 40 percent since Fields, 56, took over three years ago, at the peak of the US motor industry's recovery. Now US sales are slipping and Ford's profit margins are trailing those of larger rival General Motors.
Ford's board of directors and Chairman Bill Ford Jr have been unhappy with the company's performance, and sought more reassurance that investments in self-driving cars, electric vehicles and ride services would pay off.
“Hackett, together with Bill Ford, will focus on three priorities: Sharpening operational execution, modernising Ford’s present business and transforming the company to meet tomorrow’s challenges.” Ford’s statement said.
Ford also named leaders to three new roles under Hackett: Jim Farley has been appointed executive vice president and president of Global Markets, Joe Hinrichs is now executive vice president and president of Global Operations and Marcy Klevorn is executive vice president and president of Mobility.
Challenging times
The turbulence at Ford comes as all three Detroit carmakers are under pressure to prove they can avoid losses as the US auto market, the source of the bulk of their profits, is slowing down after last year's record sales.
Fields outlined a variety of initiatives 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."
Among Fields' bets on technology is a plan to invest $1 billion (R13.2bn) over the next five years in tech startup Argo AI.
Ford has churned out strong profits under Fields. However, Ford dismayed investors earlier this year by forecasting lower profits for 2017 and higher costs for its investments in "emerging opportunities."
On Friday, Silicon Valley electric car maker Tesla Inc was valued at $51 billion (R670bn), more than Ford's $43 billion (R565bn). The contrast is a dramatic sign of how little confidence investors have that old-line carmakers can transition to a future where software substitutes for pistons and transportation is sold by the mile or the minute.
At the same time, GM is turning up the pressure on Ford in the North American truck and SUV business, the source of 90 percent of Ford's profits.
GM is gearing up an "onslaught" of trucks for the North American market, the automaker's President Dan Ammann told Reuters last week, including a new generation of the Chevrolet Silverado large pickup truck that competes with Ford's primary profit machine, the F-series.
Ford is moving to cut costs to offset declining US sales. Last week, the carmaker said it would cut 1400 salaried jobs in North America and Asia through voluntary early retirement and other financial incentives.