Ford Motor Co abruptly named James Hackett as chief executive on Monday, responding to investors’ growing unease about the U.S. automaker’s slumping stock price and its ability to counter threats from longtime rivals and Silicon Valley.
Ford Chairman Bill Ford Jr., whose family effectively controls the U.S. No. 2 automaker, said he wanted Hackett to speed up decision-making and cut costs, but did not offer specifics on how the new CEO should change operations. “The clock speed at which our competitors are working …requires us to make decisions at a faster pace,” said Ford Jr., who plans to take a more active role at the company, according to a person briefed on the matter.
Ford, which announced plans to cut 1,400 white-collar positions last week, is expected to look at further significant cost cuts in the next three to six months, according to company officials, speaking on condition of anonymity as the plans have not been finalized.
Hackett, 62, known as a turnaround expert who for the past year has led the Ford unit developing self-driving cars and related projects, replaces Mark Fields, 56, who spent less than three years as CEO.
Fields’ abrupt dismissal caught nearly all at Ford by surprise, but concerns about the company’s direction have been brewing for some time.
Ford, once the most financially secure of the ‘Big Three’ Detroit automakers, and the only one not to take U.S. government money in the U.S. auto industry bailout a decade ago, reported record profit in 2015, but now finds itself under pressure on all sides as overall U.S. auto sales fall.
Rival General Motors Co is aggressively targeting Ford’s share of the lucrative North American truck and sport utility business, the source of 90 percent of Ford’s profit. Meanwhile, investors see Ford as a laggard in the shift toward electric vehicles, self-driving technology and ride-sharing. Ford’s $44 billion market value is below electric car pioneer Tesla Inc’s $51 billion.
Bill Ford and other descendants of company founder Henry Ford effectively control the automaker through a special class of shares, but many investors share his concern that the company is running out of time. Ford shares closed up 2.1 percent at $11.10. At Friday’s close, they had fallen 37 percent since Fields took over three years ago at the peak of the U.S. auto industry’s recovery from the crisis last decade.
The automaker has tangled with U.S. President Donald Trump, who spent more than a year criticising the company on the campaign trail for expanding operations in Mexico and exporting U.S. jobs. A Ford spokeswoman said Trump was not a factor in Fields’ departure.