Hackett made some significant changes to try to make Ford more profitable. More dramatically, Hackett canceled most of Ford’s car lineup in the United States so the company could focus on its most profitable trucks and SUVs. Ford then announced plans for $ 11 billion in new investments in electric and hybrid vehicles, even as it laid off nearly 20 percent of its European workforce.
“We made some important decisions in the early days that were quite controversial,” Hackett said on a conference call Tuesday. “Getting out of the sedan business was a tough question. ”
Some have argued that Hackett was kicked out of Ford because of the company’s poor performance – Ford’s stock price has fallen by around 40 percent since Hackett’s tenure began. But others argue that Hackett just wasn’t interested in the high-level job for a long time. Hackett, now 65, joined Ford near the end of a long career. His plan may have always been to chart a new course and identify a promising successor before passing the torch.
“Hackett has always been a short term, there to fight fires [former CEO Mark] “Fields lit,” auto industry reporter Dan Carney wrote in a tweet Tuesday. “With those largely extinct and Farley having a proven track record, he naturally wants to return to the retirement Ford pulled him out of.” “
New products and technologies
The fruits of Hackett’s transition to trucks and electrification began to appear last year. In November, Ford announced a long-range battery electric vehicle called the Mustang Mach-E. In June, Ford revamped its F-150 truck lineup, adding a hybrid option. The company also brought back the Bronco after a 24-year hiatus, although the Bronco was notable for not having a hybrid or battery-electric option.
Hackett took over Ford shortly after the automaker placed a billion dollar bet on autonomous start-up Argo, and there haven’t been any big changes in Ford’s autonomous driving strategy since then. Since 2016, Ford’s goal has been to deliver a self-driving car without a steering wheel by 2021. Ford subsequently changed the goal for Argo to launch an autonomous taxi service in 2021, a date that has now been pushed back. to 2022.
Hackett’s self-driving strategy won a vote of confidence last year when Volkswagen agreed to buy half of Ford’s stake in Argo, further strengthening an existing alliance between Ford and Volkswagen. Ford is also expected to build some of its vehicles on Volkswagen’s electric vehicle platform.
Hackett therefore made significant investments in electrification and autonomous driving technologies, but he did not really capitalize the company on these changes. Under Hackett, Ford continued to rely heavily on pillars like the F-150.
Wall Street was not impressed. The company’s stock has lost about 40% of its value since Hackett took control in 2017. And that was on top of the decline in stock prices under Hackett’s predecessor, Mark Fields.
Farley spent 17 years at Toyota before 13 years at Ford
Farley’s career in the automotive industry began with Toyota, where he helped launch the Lexus brand in the early 1990s. He worked there for almost 20 years before being recruited to Ford in 2007, just in when the Great Recession began to hit auto sales. At the time, Toyota was doing better than Ford and the other automakers in Detroit. Then-CEO Alan Mulally specifically recruited Farley to bring an outside perspective to Ford’s management.
Over the past 13 years, Farley has risen through the ranks. Prior to his rise to COO in February, Farley had focused on Ford’s mobility and autonomous vehicle efforts, much like Hackett had overseen a Ford ridesharing subsidiary before he was raised to the senior post. By the time Farley was promoted to COO, Hackett dismissed questions as to whether he was preparing Farley to be his successor, insisting that “I plan to stay in this position”.
Now Hackett says he’s changed his mind – he’s been so impressed with Farley’s work that he’s decided it is time to retire. Hackett said on Tuesday he was blown away by the way Farley handled the COVID crisis.
“A company like Ford has so many fixed costs that when you turn them off, there’s almost no way to avoid the kind of losses that we risk facing,” Hackett said. “We were able to reduce a large part of the losses in a very short period of time, which is testament to his management prowess and his mastery of the business. ”
Hackett described his retirement as his own decision.
“It probably hit me in the spring if you ask the question, when is a good time to retire?” Hackett said. “I said you have to do it now because the wind in our sails is really starting to pick up. ”
Of course, it’s also possible that the board pushed Hackett out of the door. At the same time, the board’s choice to raise Farley rather than seek out an outsider suggests that they are not seeking to fundamentally rethink Hackett’s strategy. President Bill Ford praised Hackett on Tuesday’s conference call.