Jim Farley 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.

Lincoln Black Label

When your model line is thin and lacking outstanding products, you can patiently wait for the development of new models or strike out in a new, quicker direction for immediate results. As the luxury brand for the Ford Motor Company, Lincoln has chosen to do both in an effort to compete in a segment dominated by Lexus, Mercedes-Benz, BMW and others. Look at Lincoln right now and you see a premium version of the Ford brand, models that share platforms with mainstream Ford across the board.

Craftsmanship and Concierge Services

Lincoln desperately needs fresh, original product and with Ford slow to respond, it is taking the aforementioned “quicker direction” to renew customer interest. Specifically, the Lincoln Black Label program has been announced, what the company describes as “…a new and higher level expression of Lincoln design, style, materials, craftsmanship and personal service and experience.”

How Lincoln’s shrinking customer base will respond to these changes is not known, but it is a stop-gap measure until the brand finds its footing again. This past week, Lincoln Black Label was showcased on its MKZ sedan and MKC Concept, with the company confirming that it will gradually find its way across the entire Lincoln line.

Three Foundational Elements

Speaking at a news conference in advance of the 2013 Pebble Beach Concours d’Elegance was Jim Farley, executive vice president of Global Marketing, Sales and Service and Lincoln. “The new Lincoln Motor Company is built on three foundational elements – design, quality and personal service; Black Label represents our highest expression of these elements.” Farley added that customers want to feel a “personal connection” for the products and services they desire, something Black Label intends to fulfill.

Farley explained that Lincoln and Black Label dealers will “collaborate to create a consistent, personal and integrated client shopping and ownership experience.” What Black Label customers will find is a full suite of elevated customer services to be announced when the sub-brand is introduced in early 2014. Figure that Lincoln is still working out the particulars of this program and enlisting dealers to participate.

Three Black Label themes are being introduced: Indulgence, Center Stage and Modern Heritage. Lincoln describes “Indulgence” as a Chroma Couture exterior and Truffle interior. Its “Center Stage” package offers a Black Tie exterior and a Jet Black with Foxfire Red accents interior. Lastly the “Modern Heritage” theme comes with what it describes as a Confidential White tri-coat exterior with a Vianca interior.

Affected models will be wrapped in speciality Venetian leathers, a hide standard that fewer than one percent of all leathers meet. Besides the seating, Venetian leather will be draped and stitched across the dashboard, the center stack and on door panels. Lincoln will also make use of natural woods including Ziricote in the Indulgence, prized for its natural beauty. Alcantara, a trade-marked high-end material will grace the headliner, visors and pillars and trim the floor mats.

New Lincoln Models

It will take the better part of a year for Lincoln to roll out Black Label with a late 2014 introduction planned. In the meantime, Auto Trends has learned that the MKC Concept, a compact crossover utility vehicle, will be green-lighted for production and a second new model mostly likely will be announced sometime in 2014. Thus, Lincoln will both flesh out its product line with new models and expand the products within that line by rolling out Black Label.

Ford’s Black Label approach and new models comes as Lincoln finds itself trailing Cadillac which outsells Lincoln by a 2-to-1 margin. As recently as 1998, Lincoln was the top-selling luxury make in America, but has been outgunned by the three German luxury brands, two Japanese luxury brands and Cadillac over much of the past decade. And with Ford introducing Lincoln to China, it will be investing billions to revive a brand that has languished.

Lincoln Black Label Photos courtesy of the Ford Motor Company.

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Jim Farley

Ford Management Overhaul: Fields Out, Hackett In