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Jim Farley Appointed Ford President and CEO

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James D. (Jim) Farley, Jr., is the Ford Motor Company’s next President and CEO, and much of the automotive media could not be more pleased. Farley, who left Toyota for Ford in 2007, has proven his mettle in a variety of positions, including as the one-time head of the Lincoln brand. He will succeed Jim Hackett who will step down on Oct. 1, but remain in an advisory capacity until spring 2021.

From Cars to Trucks and Utility Vehicles

Jim Farley, Ford executive.

Farley’s ascendancy comes as Ford transitions away from cars to an almost full utility vehicle and truck fleet, at least in the United States. Hackett was responsible for pulling the plug on several Ford and Lincoln cars, including the Focus RS, Fiesta ST, Fusion, and Taurus, as well as the Lincoln MKZ and Continental. That controversial decision upset not a few fans; Farley, of course, might reverse course or at least bring back a few niche models to fill out the product line.

Nevertheless, Ford is on the verge of releasing its Mustang Mach-E electric SUV and will soon roll out the next-generation F-150, its most popular model. Later this year, the Bronco Sport crossover arrives, followed by two- and four-door versions of the Bronco SUV in early 2021. The Bronco is expected to carve a niche in a segment dominated by the Jeep Wrangler.

Hackett, Stock Value and Profitability

Hackett came to Ford from a furniture company and has received criticism for not elevating Ford’s stock value and profitability. Regardless, Ford did make money in the second quarter, thanks largely to the profitability of its Argo AI unit. That’s opposite the trend of what most of the industry suffered in the second quarter as the global coronavirus pandemic took hold. Analysts expect Ford to make a profit of at least $500 million in the third quarter as production returns to pre-COVID-19 levels.

Farley is admired by many for his interest in vintage racing. Indeed, he owns Cobra and GT40 models that he races for that purpose. His family’s Ford roots can be traced to his grandfather who worked at the Ford River Rouge Plant beginning in 1914.

From Toyota to Lincoln to COO

Farley joined Toyota in 1990 and was responsible for rolling out the Scion brand. His other accomplishments included serving as group vice president and general manager of Lexus, where he was responsible for all sales, marketing and customer satisfaction activities. He also held a VP position with the Toyota brand.

In 2007, Ford hired Farley as group vice president, global marketing and Canada, Mexico and South America. Later, he oversaw operations for that same region. In 2010, Farley was appointed to lead global marketing sales and services. He had additional stints at Lincoln, including overseeing the brand’s launch in China and served as executive vice president and president, Ford Europe, Middle East and Africa. At present, Farley is the company’s Chief Operating Officer and represents Ford on the U.S. China Business Council Board of Directors.

Looking Ahead

Farley’s ascendancy comes as little surprise to industry analysts who have witnessed his grooming for the position early on. The upcoming CEO’s resume may be one of the best in the industry, thus his movement to the top tier of the Ford conglomerate is a natural next step.

His being a car guy is an attribute that should bode well for Ford. Like Akio Toyoda, whose design and racing background has influenced Toyota tremendously (a sporty Camry and a revived GR Supra are just two examples of his imprint), Farley brings skill and panache to his new role. We can speculate what that might mean, but rest assured his guidance should have far-reaching consequences throughout the company as it attempts to balance electrification and autonomy with the vehicles customers want most.

Photo copyright the Ford Motor Company.

Ghosn With the Wind: Nissan’s Former CEO Flees Japan, Now Resides in Lebanon

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Carlos Ghosn before his downfall. Photo courtesy of Nissan News.

Talk about a story filled with intrigue!

Former Nissan CEO Carlos Ghosn (pronounced Gone), under the watchful eyes of Japanese authorities, secretly left his home late last month and made his way to Lebanon, where he has taken residence. The executive’s bold move, certain to become the script for a Hollywood thriller, was illegal. That said, Ghosn insists he had no choice as he found the Japanese judicial system was “rigged” against him.

Ghosn’s story starts in 1999, when he crafted the alliance that united France’s Renault automobile group with Nissan Motors. This unlikely alliance effectively saved Nissan, while allowing Renault to tap its partner for a variety of vehicles. Later, Mitsubishi was added to the alliance, effectively forming the largest alliance of its kind in the world.

Although the two principal manufacturers benefited by working together, Ghosn was intent on bringing the companies closer together, likely through a full merger. Apparently, that move did not sit well with Nissan executives (perhaps valuing their independence), who then allegedly plotted to remove Ghosn from his position. Charges of financial impropriety were lodged against him and both companies removed Ghosn from their executive roles.

Meanwhile, Japanese authorities jailed Ghosn with the intent of convicting him of a series of crimes, which likely would have kept him Incarcerated until his death. The Japanese legal system is quite different from what we’re used to in the West, particularly in the United States, where an individual is considered innocent until proven guilty.

In Japan, an individual may stay in jail for months, if not years, until his trial is completed. Ghosn was not allowed attorney representation early on, and even then the contact was always limited. Twice he was released on bail, following arrest, the second time confined to his home in Japan under the watchful eyes of the authorities. He was also restricted from seeing his family, including his wife.

Just how Ghosn managed to leave Japan for Lebanon remains a mystery. A rumor that he was packed in a musical instrument box and shipped to Lebanon with a stop in Turkey, was one of the first stories to surface. The plot thickened when it appeared that the executive’s own family was involved, an allegation Ghosn later denied. At this point, we do not know the complete details of his whirlwind escape, but they will eventually emerge.

Beyond his uncanny escape and emergence in Lebanon, Ghosn will now fight back by settling some old scores. Expect the former executive to name names and point out misdeeds for both Nissan and Renault executives. Published reports indicate that the information he plans to share could prove devastating, especially to Nissan, which has been losing money and market share over the past few years.

Moreover, what’s also likely to be scrutinized is Japan’s legal system, which routinely jails individuals as prosecutors enjoy a conviction rate above 99 percent. That system essentially ensured conviction for Ghosn, even as he insisted upon his innocence.

Another result of Ghosn’s new-found freedom is the Renault-Nissan alliance itself – depending on what Ghosn shares — as its future may be in peril. Regardless, the fallout will be enormous as corporate and government officials wrestle with his escape and the subsequent detailing of Ghosn’s allegations.

Likely, Ghosn will support his charges with witnesses and perhaps documentation, both of which could make this story front pages news for a long time.

As for Ghosn’ future, it likely lies in Lebanon as this Middle Eastern country does not have an extradition treaty with Japan. Ghosn also has French and Brazilian passports, but they’re in the hands of his attorney in Japan. On Thursday, Interpol delivered a “red notice” to Lebanon which is “a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action.” It isn’t an arrest warrant, but it does mean Lebanese authorities will interview Ghosn to get his side of the story in this highly charged affair.

See Also — Top Automotive Stories of 2019

US Congress to Interrogate Volkswagen CEO Today

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Among the perks of a senior executive are a generous salary, excellent benefits, and stock options. Typically, these are the advantages the rest of us focus on when we consider the awe-inspiring lives of CEOs.

But there is one aspect of the job that drives home why these individuals are so handsomely compensated: when things go wrong, they become the very public face of the company, as neither internal marketing nor external public relations can answer the questions lawmakers insist are answered. Behind the scenes stands the board of directors who will quickly learn if their chosen executive can withstand a withering confrontation.

U.S. Capitol Building
The US Capitol Building in Washington, DC.

The legislative focus today is on Volkswagen Group of America President and CEO Michael Horn, the German-born director whose time for scrutiny has come. In particular, Horn will testify under oath before the House Energy and Commerce Committee to explain why so-called “defeat devices” were installed in select 2009 to 2015 model year diesel-powered cars in a bid to circumvent EPA regulations.

Such regulations require manufacturers to certify that diesel engines release no higher than a certain threshold of particulates. An independent investigation of VW’s 2.0-liter, turbo-diesel engine — found in five Volkswagen brand products and in one Audi model — spew 10 to 40 times the legal limit. Not only was this practice deceptive and illegal, but it is harmful and can sicken, perhaps kill people with respiratory problems.

Volkswagen has had nearly three weeks to prepare for the inevitable hearing before the congressional oversight panel to answer questions. Lawmakers, acting on behalf of the American people, will ask Horn why the defeat devices were installed, how the decision to install them was made, and why the scandal went undetected for so long. Officials from the EPA will also have their chance to grill Horn today.

The German automaker — the world’s largest in terms of volume for the first half of 2015 — has a disproportionately small slice of the US market. Indeed, its top competitors, GM and Toyota, are domestic leaders and sell far more cars than the Volkswagen Group. Brands such as Kia and Subaru easily outsell the Volkswagen brand alone. The new line of diesels, introduced in 2009, were expected to play a big part in delivering Volkswagen from relative obscurity. Although sales have yet to spell a significant difference, the diesel crisis has cast a shadow over the entire US operation.

Though the initial scandal revealed 482,000 affected vehicles in the US, Volkswagen management quickly followed the revelation with an announcement that nearly 11 million vehicles are impacted worldwide. Volkswagen has also set aside $US 7.2 billion to cover the anticipated cost of addressing the emissions scandal. Those funds, however, won’t come to close to covering fines that potentially could approach $18 billion in the US alone.

Despite its global size, Volkswagen’s political capital in America is small. An AP “big story” focusing on Volkswagen’s clout revealed that it invests only a fraction of what GM, Toyota and Ford spend to curry the favor of lawmakers. All three automakers contribute funds commensurate with their US footprint. For example, Toyota has 10 manufacturing plants in America and Volkswagen has just one.

Besides today’s congressional and regulatory grilling, other action is certain to follow, including administrative, civil, and criminal prosecution. Fraud charges and money laundering investigations will be conducted.

Some states, such as California, have already begun proceedings. And the usual attorney pools are working with the affected owners to protect their rights. Unlike the typical recall where a safety issue looms large, Volkswagen owners do not have that concern. Still, Volkswagen must offer a fix, compensation or a buy back plan, details that might emerge during today’s proceedings.

Related Volkswagen Stories

Diesel Resurrection: How Volkswagen Might Win Back Customers

Volkswagen Scandal No Surprise to Those Who Have Been Tracking It…VW Management Included

Volkswagen Diesel Cheating May Cost the Company Billions

US Capitol Building photo copyright Auto Trends Magazine. All rights reserved.

John Krafcik and the Hyundai Upsurge

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Mary Barra’s appointment as GM CEO surprised some industry analysts when Dan Akerson announced his retirement last month. But for close observers Barra was already one of a handful of possible Akerson replacements, with Dan hinting as much last summer.

Barra’s ascendancy, as significant as it is, may be rivaled by another top level change made as December drew to a close. And that would be John Krafcik’s sudden departure as US CEO for Hyundai and his replacement by Dave Zuchowski, vice president of sales.

John Krafcik and Hyundai

John Krafcik

John Krafcik, former Hyundai CEO.

Krafcik’s departure was sudden and not expected. Moreover, he has been credited with orchestrating Hyundais upsurge, expanding it beyond its budget brand limits to become a comprehensive company encompassing mass appeal, premium, and even luxury models under the Hyundai appellative.

John Krafcik joined Hyundai in 2004 as vice president of Product Development and Strategic Planning, and has been credited by the automaker for reshaping its American strategy and product lineup with strengths in design, innovation, and value. In 2008, Krafcik was named US CEO.

Hyundai Assurance Program

Among the highlights of Krafcik’s tenure, what followed stints with the Ford Motor Company and the joint Toyota-GM NUMMI venture, was the launching of Hyundai Assurance, a consumer program highlighted by a 10-year, 100,000-mile powertrain warranty. In Jan. 2009, Hyundai expanded the plan to permit customers to return their newly purchased vehicles if they lost their jobs within the first year of ownership. That program was ended in spring 2011 with 350 customers taking advantage of the offer according to Consumer Reports. Its buy back program generated tremendous goodwill for Hyundai during a tough economic time. Indeed, along with Kia and Subaru, the three brands were the only ones to enjoy continued sales increases for the duration of the Great Recession.

John Krafcik was at the helm as Hyundai rolled out several blockbuster products. In 2009, its Genesis sedan raised Hyundais visibility considerably and resulted in the brand garnering its first-ever North American Car of the Year award. Three years later the Hyundai Elantra took those honors. In the interim, Hyundai launched several new or updated models including the Genesis Coupe, the Sonata sedan, and its high-end Equus sedan.

Krafcik’s tenure wasn’t flawless. In 2012, Hyundai and Kia agreed to reimburse approximately 900,000 owners of select 2011 to 2013 models for overstating mileage numbers. Following consumer complaints, the EPA launched an investigation and determined that highway fuel economy numbers were exaggerated by 1 to 6 mpg. Hyundai blamed procedural errors for the mistake, what will ultimately cost the two companies hundreds of millions of dollars.

Lagging Hyundai Sales

Hyundais US sales have also flagged this year, falling behind the industry’s pace as capacity constraints and import limitations weighed in. Yesterday, Auto Trends speculated that Hyundai and Kia will resolve their mutual constraints by building a new factory in the United States.

John Krafcik earned a reputation for being likable and approachable, with the CEO dispensing his thoughts via Twitter updates and chats. Even prior to his sudden departure, Krafcik was rumored to be in the running for one or more undisclosed positions with competing manufacturers. Whether those rumors led to Krafcik’s departure is not clear. However, his contract with the automaker was ending on Dec. 31, 2013.

Dave Zuchowski Ascends

Zuchowski has been with Hyundai since 2007 following a long career with the Ford Motor Company. Addressing the change in leadership was Im Tak Uk, executive vice president and chief operating officer of Hyundai Motor Company, During his time at Hyundai, Dave has been instrumental in our growth, especially among our dealers. He exhibits a rare combination of passion, intelligence, creativity and diligence, and we are confident that he is the right choice to build on John’s momentum and take Hyundai to new and greater heights.

Those greater heights include rolling out Hyundais fuel cell program when the 2015 Hyundai Tucson FCV hits the market this spring.

John Krafcik photo courtesy of Hyundai Motor America.

GM: Federal Ownership Ends; Mary Barra Ascends

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Mary Barra
Foreground: Mary Barra; Background: Dan Akerson

There may not be another car manufacturer in the world that can match GM’s flair for the dramatic. Back before the company went bankrupt, there were occasions when the automaker hired a marching band, brought in vintage models and augmented iron with celebrities to introduce a new or concept vehicle. GM’s debuts are less theatrical these days, but its inclination for building buzz remains, demonstrating a much more nuanced and disciplined approach instead.

US Treasury Sells GM Shares

This week, the federal government officially sold its remaining shares in General Motors, ending nearly five years of federal oversight of the company. No longer can the words “Government Motors” be honestly ascribed to GM, an appellation that management has been forced to acknowledge, but also desperately has wanted to see removed.

That removal came on Monday as the U.S. Department of the Treasury announced that it had sold its remaining share of GM’s common stock. No, the entire taxpayer investment has not been recouped. Yes, there is strong proof that rescuing GM had an overall positive impact on the economy as outlined by the Center for Automotive Research in its study published this week.

Mary Barra Appointed CEO

And if on cue, GM followed up the Treasury Department’s announcement with one of its own, revealing that its current CEO Dan Akerson would step down in Jan. 2014 and be replaced by Mary Barra.

That news spread like wildfire, with “Mary Barra” quickly trending on Twitter and staying there for much of the day. It also confirmed that Dan Akerson’s earlier pronouncements that Barra was a GM CEO candidate went beyond mentioning a woman’s name in a sea of men. Barra was elected by GM’s Board of Directors to become the next CEO of the company, a position that she will assume on Jan. 15, 2014. She will also join GM’s Board.

Akerson was expected to leave GM by next summer, but moved up his succession plan so that he can spend time with his wife who was diagnosed recently with an advanced stage of cancer. Akerson led the company to record profits and has it competing with Toyota and Volkswagen for global sales leadership.

GM Executive Shuffle

With Mary Barra moving up, GM has also moved several other executives around. Theodore (Tim) Solso will succeed Akerson as Chairman. Dan Ammann, currently executive vice president and chief financial officer, will become president, tasked with managing GM’s many regional operations as well as overseeing the Chevrolet and Cadillac brands in addition to GM Financial.

Mark Reuss, a name often floated as Akerson’s replacement, will move into Barra’s current slot. Currently, Reuss is executive vice president and president, North America.

Alan Batey, currently senior vice president, Global Chevrolet and US. Sales and Marketing, will move into Reuss’ slot. He also has been named Executive Vice President and President, North America.

Steve Girsky, vice chairman, Corporate Strategy, Business Development and Global Product Planning, will move to a senior advisor role, then leave the company in April 2014. Girsky will remain on GM’s Board of Directors.

Mary Barra: Who is She?

Mary Barra, 51, has been GM for 33 years, rising through the ranks in various departments including manufacturing, engineering and senior staff positions. Barra’s leadership in turning around GM has been recognized within and without the company, as she has helped to breathe fresh life into the company’s product development process. Barra has also led the effort to improve product quality ratings and customer satisfaction.

Barra began her tenure with GM while in college, working as a co-op student for Pontiac while attending Kettering University (formerly the General Motors Institute). She graduated with a degree in Electrical Engineering, later earning an MBA from Stanford.

Before her latest appointment, Mary Barra had already attained the highest role a woman has ever reached in the auto industry. In 2013, Forbes rated Barra No. 35 on their list of the World’s Most Powerful Women, rising six spots from 2012. Come 2014, her ascendancy to CEO of GM will fuel her rise further, perhaps putting her among the Top 10 women of the world.

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