Ford replaces CEO Jim Hackett

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Ford is replacing Jim Hackett as chief executive after three years of poor share price performance as the automaker grapples with the development of new technology and the economic fallout from the coronavirus pandemic.

The company said Jim Farley, its chief executive, would take the top job, putting a 13-year veteran at the helm halfway through an $ 11 billion restructuring aimed at improving profitability and accelerating its business. push towards electric cars.

Bill Ford, executive chairman, said it was a good time to make the transition, “coming out of the second quarter where we did a lot better than I think the world thought we would.”

Investors weren’t always happy with Mr. Hackett, a stranger Ford brought in from office furniture maker Steelcase. He is the second consecutive CEO to oversee a sharp decline in the company’s stock price, which has fallen 40% since taking office. The S&P 500 rose almost 40% over the same period.

“When Bill asked me to take on the CEO role, I asked him to think about it. [whether I was] really the right solution, because I was going to approach the company differently from the others, ”Hackett said on Tuesday. “He said, ‘This is what we need’.”

He added: “I knew it would test the patience of our stakeholders, and it was fine with me, because I had done it once before, and saw how the story unfolded.

Jim Farley wasn’t promoted to COO until March © AP

Mr Farley told the Financial Times that when it came to Ford’s share price, he expected investors to hold the company accountable for plans to achieve 10% profit margins in North America. North, to restructure underperforming businesses, grow its commercial vehicle business, and successfully manage upcoming launches of the F-150, Bronco and Mustang Mach-E.

“My point is to stick to our guns, run well [and] the numbers will speak for themselves, ”he said. “As to how this will all be received, I’ll leave that to the experts.”

The company embarked on an $ 11 billion restructuring as part of an effort to accelerate the development of new vehicles, including electric cars, but its progress had been uneven, even before the pandemic caused widespread widespread disruption and plant closures.

Mr Farley said the pandemic had not delayed the restructuring effort, which he planned to continue. “We are running as fast as we ever wanted to,” he said.

The losses in the second quarter were less severe than Wall Street expected, although the company said it would still be in the red for the entire year.

Mr Farley’s move to the top role comes shortly after his promotion to chief operating officer in March. He became apparent heir at that time. A potential rival, Joe Hinrichs, president of Ford of the automobile, left the company at the same time.

Mr. Farley spent the early part of his career at Toyota, including Lexus, before joining Ford in 2007. He led the automaker’s operations in Europe, the Middle East and Africa – achieving margins under his leadership. record beneficiaries in Europe. Prior to becoming Chief Operating Officer, he headed Ford’s mobility and technology divisions.

He identified Ford’s competitors today as primarily technology companies, citing “Amazon, Baidu, Tesla, Apple, Toyota and others.”

David Whiston, a Morningstar analyst, said Mr. Farley’s style of communication – more direct than Mr. Hackett’s – would appeal to corporate watchers, “but he still has a huge global restructuring to do over a period of time. number of years, and they have to reduce their debt by the more than $ 30 billion it currently represents ”.

Ford shares rose 1.3% to $ 6.78 at lunchtime in New York City.

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