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Another three years, another CEO change at Ford Motor Co.
Jim Hackett, who took over the automaker in 2017 and led an effort to modernize its storied but financially struggling operations, will retire on October 1, Ford said Tuesday. He will be replaced as president and CEO by chief operating officer Jim Farley, who will now be responsible for driving the automaker through the rest of the COVID-19 pandemic, for boosting its competitiveness with higher-tech rivals—and for continuing to turn it around from the lingering effects of the Great Recession, more than a decade ago.
Farley, 58, has “great instincts for the future and the new technologies that are changing our industry,” executive chairman Bill Ford said in a company announcement, also thanking Hackett “for all he has done to modernize Ford and prepare us to compete and win in the future.” Hackett, 65, will remain a special advisor to the company through March 2021.
Ford has struggled with relatively flat sales and dwindling profits in the past few years, even before the COVID-19 pandemic temporarily halted its assembly lines and turned Ford into a ventilator manufacturer. Ford’s stock is down nearly 40% since the start of Hackett’s tenure, and shares rose 1.5% Tuesday after the CEO transition was announced.
Farley has been Hackett’s heir apparent since February, when Ford promoted him to chief operating officer. An industry lifer who spent the first half of his career at Toyota and joined Ford in 2007, he has since held various roles overseeing the company’s strategy, global marketing, and operations in Europe, the Middle East, and Africa. During a conference call Tuesday, he emphasized his plans to build on Hackett’s work to increase Ford’s competitiveness among fierce—and increasingly nontraditional—rivals.
“We know our competition today. It’s Amazon, Baidu, Tesla, Apple, Toyota, and others,” Farley said during a conference call with reporters. “They’re well-financed and voracious companies—and I’m inspired by the positive momentum that we’re now building.”
Farley inherits that tech-savvy focus from Hackett, a former Steelcase CEO who emphasized user experience and recently oversaw Ford’s quick pivot into making ventilators and other personal protective equipment this spring. After replacing Mark Fields, who also lasted three years, Hackett was tasked with both cutting costs and modernizing the automaker known for its founder’s invention of the assembly line.
With his emphasis on design thinking and high-tech innovations, including an electric Mustang, Hackett was a bit of an unusual choice for a Ford CEO. (At least, among white men with brief first names.) “Hackett is as close to an intellectual as the executive suite is ever likely to see, a strategist obsessed by so-called design thinking as a blueprint for doing business,” Fortune’s Adam Lashinsky wrote in a 2017 profile.
But “no matter how clever his ideas, Hackett has yet to distinguish himself financially,” Lashinky wrote 18 months later, adding that “Hackett can only last so long if the company’s stock remains a single-digit embarrassment. (It trades below $9 a share.)”
Today, Ford stock trades below $7 a share. And the clock appears to be starting on the next Ford CEO’s attempt to boost it, and the automaker’s future.
