Ford Motor Company Archives — Auto Trends Magazine

Management shakeup at the top as stock prices slide.

Following a board meeting this past Friday, the Ford Motor Company set in motion changes to senior management confirmed only this morning.

CEO Mark Fields is out, Jim Hackett has taken his place, and three new roles for current Ford executives were announced. Also, long time Ford communications head Ray Day will retire in 2018 with Mark Truby replacing him.

Hackett is the former CEO of Steelcase, a leading office furniture company. Besides modernizing Steelcase, Hackett served as the interim athletic director at the University of Michigan, bringing venerated football coach Jim Harbaugh to Ann Arbor. That move received praise from fans and has helped reinvigorate the program.

From Board Member to Mobility Boss

Hackett joined Ford’s board of directors in 2013, later named the chairman of the newly formed Ford Smart Mobility in March 2016. Bill Ford is a fan of Hackett and the two appeared together at a news conference this morning at Ford’s Dearborn headquarters to discuss the changes.

These changes mean Mark Field has retired, following a distinguished 28-year career at Ford. Fields, now retired, succeeded Alan Mulally as the company’s president in CEO beginning in July 2014. Prior to that, he served as the company’s chief operating officer, executive vice president, and chairman of the automaker’s Premier Automotive Group. Early on he ran marketing and sales for Ford’s former Mazda subsidiary and also managed Ford’s Argentina operation.

In Mulally’s Steps

But Fields came in behind Mulally, who has been widely credited with saving Ford from bankruptcy. Unlike its chief US competitors GM and Chrysler, Ford had a large cash fund in place when the market nosedived in 2008. Essentially, Mulally hocked the house to create Ford’s war chest. That debt has since been paid off.

Mulally also instituted the company’s “One Ford” policy, where the automaker began offering its products globally instead of regionally. Thus, the European Ford Focus came to the US market, while the Mustang sports car’s range extended to new markets, including Europe. Today, more than 100 markets offer the Ford Mustang.

To his credit, Fields oversaw record profits and operating margins over the past few years. For instance, the company made a record $2.5 billion net profit in the first quarter of 2016 — more profit than any quarter in Ford’s now 114-year history.

But profits are only one indicator of corporate success. Unfortunately, Ford’s stock price has fallen by 40 percent under Fields. At the most recent annual shareholder meeting earlier this month, shareholders pressed Fields and Chairman Bill Ford to explain why shares have plummeted. Further aggravating shareholders were the strong bonuses awarded to Fields and other executives as share prices tumbled. Clearly, shareholder disgruntlement and board angst led to the changes we learned about today.

Three Appointments Effective June 1

Besides Hackett stepping in, Ford announced three other personnel changes effective June 1.

Firstly, Jim Farley is now the executive vice president and president of Global Markets, overseeing Ford’s business units in much of the world. In addition, Farley will oversee the Lincoln Motor Company along with global marketing sales and services.

Secondly, Joe Hinrichs is appointed executive vice president and president of Global Operations. This means Hinrichs will oversee the company’s product development, manufacturing and labor affairs, quality, purchasing, and sustainability efforts, along with environmental and safety engineering.

Thirdly, Marcy Klevorn is now the executive vice president and president of Ford Smart Mobility LLC, replacing Hackett. The subsidiary was formed to accelerate the company’s plans to design, build, grow and invest in emerging mobility service along with advancing changes to Information Technology and Global Data.

“We are fortunate to have three dynamic and talented leaders in Jim Farley, Joe Hinrichs and Marcy Klevorn taking on greater responsibility,” Bill Ford said. “Each has a track record of driving innovation, cost efficiency and delivering results around the world. They will work closely with Jim Hackett to lead Ford’s day-to-day operations, build our brand and capitalize on emerging opportunities.”

Three Priorities

Hackett and Bill Ford will focus on three priorities moving forward, defining these as:

1), sharpening operational execution,

2), modernizing Ford’s business, and

3), transforming the company to meet future challenges.

Besides the immediate challenges of convincing Wall Street to boost Ford stock, the automaker must also face a tightening market. US sales are down year to date as analysts indicate peak sales were reached in 2017.

Like its competitors, Ford must exercise discipline and avoid deep discounting, what can only hurt its bottom line.

Photo courtesy of the Ford Motor Company.

Three Michigan Plants

The Ford Motor Company announced on Tuesday its plans to invest additional money covering three Michigan plants, on top of the one plant it had previously targeted. The earlier announcement, made in January, was for $700 million and 700 new jobs at the Flat Rock Assembly Plant, while the latest plan adds an additional $1.2 billion and creates 130 new jobs, raising Ford’s new investments in Michigan to a grand total of $1.9 billion for 2017 alone. In all, 830 new Michigan jobs are on the way.

Ford says the investment comes as it seeks to strengthen two of its profit pillars — trucks and SUVs — as well as expand the company’s mobility initiative.

So, here is how the $1.9 billion will be earmarked:

1. Flat Rock Assembly — In January, Ford announced a $700 million investment in its Flat Rock Assembly plant for “high-tech electrified and autonomous vehicles.”

2. Michigan Assembly Plant (Wayne) — Ford’s Wayne, Michigan, assembly plant will receive $850 million in upgrades to produce the Ford Ranger (2019) and the Ford Bronco (2020). Work begins next May to transform the plant, with plans to remove and install the tooling in just four weeks.

3. Romeo Engine Plant — Ford’s Romeo engine plant will benefit from an expansion to allow it to build engine components for several vehicles, including the Ranger and Bronco. The plant already produces engines for the Super Duty, E-Series, Ford Shelby GT 350 Mustang and Shelby GT350R Mustang, along with components for F-Series, Mustang, Explorer and Edge. Ford says 130 new jobs will be created to handle the expanded capacity.

4. Data Storage Expansion. The automaker’s data storage requirements are expected to increase sharply over the next four years. To handle the growth, Ford is investing $200 million to upgrade its data center for improved storage, processing, and integration of this data. A side benefit will enable Ford to introduce new mobility products and services.

“At Ford, we are investing aggressively in building on our strengths today – including trucks, vans, commercial vehicles, performance vehicles and SUVs – while at the same time growing our leadership in electrification, autonomy and mobility services,” said Joe Hinrichs, Ford president, The Americas. “As America’s top producer of automobiles, we are proud to be going even further in our commitment to invest in manufacturing here at home.”

Ford says it investments are supported by the automaker’s partnership with the UAW, as well as with federal, state, county and local governments.

“UAW-Ford is proud of the total investments in three of our Southeast Michigan assembly and engine plants, which will lead to stronger job security for our members and continued support for the surrounding communities,” said UAW-Ford Vice President Jimmy Settles. “Thanks to collective bargaining, the hard-working men and women at each of these locations will now reap the full fruits of their labor. We look forward to celebrating more product investment and job growth at each of our UAW represented facilities in the months and years to come.”

President Trump Sends a Tweet

For a full day leading up to Ford’s announcement, news that something was brewing surfaced on media outlets online. Further, just hours before Ford released details of its plans, President Donald J. Trump tweeted — “Big announcement by Ford today. Major investment to be made in three Michigan plants. Car companies coming back to U.S. JOBS! JOBS! JOBS!”

The president has been pushing automakers to expand jobs stateside, giving him yet another victory lap to run.

Ford Motor Company

Ford Management Overhaul: Fields Out, Hackett In