Ford has fired CEO Mark Fields and replaced him with self-driving car chief Jim Hackett, the company announced this morning. The news comes amid turmoil in the company, including a steep 25 percent drop in car sales so far this year and layoffs of 1,400 salaried employees, with possibly more to come. The news confirms a New York Times report from earlier today.
Hackett is the former CEO at Steelcase, where he brought innovation to a stodgy office furniture industry while also significantly cutting costs by eliminating nearly 12,000 jobs representing half the company's workforce. Ford said his appointment comes as part of an effort to "further strengthen its core automotive business and accelerate a strategic shift to capitalize on emerging opportunities."
The company plans to "sharpen operational execution" by improving quality and cutting underperforming businesses, modernizing production and addressing tech weaknesses. Those changes seem likely to entail employee cuts, but there's no news on how it might affect recently promised US investments heralded by President Trump. The company could cut up to ten percent of its 202,0000-strong workforce, according to the WSJ.
It's not just the drop in sales, market share, earnings and the stock price (down 40 percent since Fields took the reins) that had Ford investors angry at Fields. The company is also lagging behind rivals in the pace of technological areas now considered crucial for automakers.
For instance, it's still three years from releasing a long-range electric vehicle, while GM already has one on the market (the Bolt). Ford is also well behind rivals in self-driving car tech, having launched its "mobility" subsidiary just over a year ago.
The fact that industry sales are down overall in the US after a two-year winning streak didn't help Fields' case either, the NYT says. Ford is also having problems with certain industry sectors, as small and mid-size cars are particularly unprofitable compared to trucks and SUVs. The company has also dealt with quality-control issues that have led to recalls this year.
Ford also announced other executive shakeups, appointing Americas head Joseph H. Hinrichs as executive VP for global operations. Chief Information Officer Marcy Klevorn will take over Hackett's job as head of autonomous vehicles.
Tesla, founded exactly 100 years after Ford, famously surpassed it in total market value last month. Though CEO Elon Musk believes the figure is out of whack, it is a sign that investors think autonomous and green tech are crucial for automakers. With the appointment of its autonomous chief as CEO, Ford obviously thinks so too.
Update: The post has been corrected to say that Marcy Klevorn is currently the chief information officer, not the chief technical officer. Thanks to reader "themenon" for pointing that out.
Update 2: In its official announcement, Ford said that Fields has elected to retire after a 28-year career with the company while Hackett will help "to further strengthen its core automotive business and accelerate a strategic shift to capitalize on emerging opportunities."