After a day of speculation, automaker Ford has announced a significant regime change to underscore its ambitions in connected and self-driving cars: Jim Hackett — who had been running Ford’s Smart Mobility business — is taking over as the company’s CEO, replacing Mark Fields, who is retiring.
The move is a bold attempt to push Ford into what many see as the next generation of auto-making. This is an area Ford has been criticised for not attacking as well as competitors like GM (which has invested in and works with companies like Lyft, acquired startups like Cruise, and started new initiatives like car-sharing service Maven); and upstarts like Tesla — never mind the likes of Google and Uber. Ford’s stock price, which is lingering around $11 at the moment, is significantly down from lofty heights of $36, which it hit in 1999-2000, right before a huge downturn.
It is therefore no surprise that during a press conference announcing the news today, Chairman Bill Ford compared Hackett several times to Alan Mulally, who was Ford’s CEO from 2006 to 2014 and helped bring Ford out of its last slump and back into profitability.
Hackett is thought of as a turnaround specialist: he spent a long period as the CEO of Steelcase, turning it around from a mundane office furniture maker into one whose products essentially evolved with the changing pace of work (for example, from closed, individual offices into open-plan spaces), and also how the products were made.
Both of those challenges have analogous cases in today’s auto industry — which is straddling two worlds where cars are either seen as dinosaurs or the next great piece of connected hardware. The hope is that he will be able to apply some of his proven Steelcase magic to Ford.
In the press conference today, Hackett (pictured above on the left, with Ford chairman Bill Ford on the right) likened the auto industry landscape today as a “Rubik’s Cube.” This underscores some of the bigger challenges of how fixing one thing could create problems elsewhere, and that sometimes the moves might not look logical if you do not now the bigger picture.
“I am so excited to work with Bill Ford [Ford’s chairman] and the entire team to create an even more dynamic and vibrant Ford that improves people’s lives around the world, and creates value for all of our stakeholders. I have developed a deep appreciation for Ford’s people, values and heritage during the past four years as part of the company and look forward to working together with everyone tied to Ford during this transformative period.”
He also seemed to caution that there needs to be patience around the new leadership: there is still some planning and strategy that needs to be decided before it is announced.
“We need to have not only a point of view on innovations, but a plan for how to integrate them into our business — or not,” Chairman Ford said in the press conference today. “We need to speed up our decision making.”
Ford added that Hackett will be focusing on operational changes, and more product launches; weeding out unprofitable areas and modernizing the business around new innovations around big data, AI, robotics and so on; and focusing on culture changes.
Chairman Ford noted that specifically, on the culture front, that the idea will be to try to make the company less top-down in how it is run and ideas are hatched. “We have to bend that notion of hierarchy in the company… it’s existed for a lot of years,” he said. “Jim is a cultural change agent.”
This is not to say that Ford has totally been out of the loop when it comes to focusing on next-generation services and plans. They include last year’s acquisition of SAIPS for self-driving tech and Chariot for its smart city transit strategy. And earlier this year, it invested $1 billion in Argo AI to further drive its autonomous car business. The bigger issue now is how these investments and acquisitions will be utilised in the longer term.
Notably, Ford very much believes that what it needs to do — and perhaps what the market needs to hear — is that it’s not a rusty old car maker, but essentially a hardware maker of the future. As part of that, chairman Ford highlighted how Hackett was lauded and greeted warmly by Silicon Valley when they once made a trip there together several years ago, when he was on the board before taking an executive role.
In addition to Hackett, there were some other changes. Jim Farley was named president and EVP, Global Markets; Joe Hinrichs is appointed EVP of Global Operations; and Marcy Klevorn EVP and president, Mobility.
Fields was a Ford lifer. He had been in the CEO role since July, 2014, and has been working for Ford in a variety of roles since 1989, and Chairman Ford noted today that the wheels were put in place for the change in the last 72 hours, although it less specifically in progress “for some time.”
Last week, we had Ford’s CTO Raj Nair on stage at Disrupt, where he predicted that Ford would look like a very different company in 10 years. Undoubtedly, he knew that something about today’s news was on the cards. Now comes the interesting part: seeing how this plays out, and if it plays out.
See that full interview here:
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