Ford to replace CEO Mark Fields

Andrew Cummings
May 23, 2017

Ford Motor expected to announce the departure of CEO Mark Fields in a broad management shake-up, a company source said - a move that reflects growing investor unease over the company's stock market performance and outlook. Hackett took that position in March 2016, after serving three years on Ford's board of directors.

The resulting shrink in profits has triggered a decrease in share prices by close to 40% in just over two years.

But the company said in a brief statement that "we are staying focused on our plan for creating value and profitable growth" and "we do not comment on speculation or rumors". An official announcement is set to be made soon, but an insider has told Forbes that Fields will be replaced by fellow board member Jim Hackett.

Ford has recently invested heavily in the development of autonomous vehicles, and plans to bring its first autonomous capable model to market in 2021.

Fiat Chrysler Automobiles NV is fighting diesel emissions-cheating allegations from USA and California regulators following CEO Sergio Marchionne's failed bid to find a merger partner. Jim Farley, Ford of Europe chief since January 2015, will oversee all of the company's regions, global marketing and sales, as well as its Lincoln Motor Co. "It even sounds a little corny but the stock price is a outcome of the actions we're going to take to make the company more fit, more profitable and a more fun place to work".

Mr Hackett, who now heads the company's Smart Mobility Division, was previously credited with having revitalised furniture company Steelcase (NYSE:SCS) during his time as CEO for two decades. Ford's stock price has fallen nearly 40 percent in the three years since Fields became CEO.

Ford posted a record $1.2 billion profit in Europe previous year but warned the impact of Britain's vote to leave the European Union would put a dent in 2017 earnings.

Ford, who previously was CEO before replacing himself in 2006 with Alan Mulally, is the great-grandson of company founder Henry Ford and has warned in recent months about the dramatic challenges facing the automaker.

The company has churned out strong profits on his watch, reporting a record $10.4 billion in pretax earnings in 2016. Ford dismayed investors earlier this year, however, by forecasting lower profits for 2017 and higher costs for its investments in "emerging opportunities". F stock is up 2.7% in pre-market trading. GM's Chevrolet Bolt electric auto, with 238 miles of range, went on sale a year ago; Ford is working on an electric SUV with 300 miles of range, but it's not due out until 2020. The contrast is a dramatic sign of how little confidence investors have that old-line automakers can transition to a future in which software substitutes for pistons and transportation is sold by the mile or the minute. In January, Fields announced that the company was dropping plans for a new plant in Mexico and would invest $700 million to create 700 jobs in MI working on electric and self-driving cars. Fields, who has made several trips to the White House this year, said Ford would have made the decision regardless of who was president.

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