Ford replaces CEO as profits slide

Ford shares have gone down nearly 40 per cent since Mr Mark Fields took over as CEO three years ago.
Ford shares have gone down nearly 40 per cent since Mr Mark Fields took over as CEO three years ago.

WASHINGTON/PARIS • Ford Motor yesterday said it was replacing chief executive officer Mark Fields with Mr James Hackett, the head of the unit developing self-driving cars, in response to investors' growing unease over the US carmaker's stock performance and prospects.

The departure of Mr Fields, 56, is among a series of management changes announced. Mr Hackett, 62, a former CEO of furniture manufacturer Steelcase, will take the helm in a broader shake-up aimed at speeding up decision-making and improving operations.

Ford shares have gone down nearly 40 per cent since Mr Fields, 56, took over three years ago, at the peak of the United States auto industry's recovery. Now, US car sales are slipping, and Ford's profit margins are trailing those of larger rival General Motors.

Ford's board and chairman Bill Ford Jr have been unhappy with the company's performance and sought reassurance that investments in self-driving cars, electric vehicles and ride services would pay off.

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"We're moving from a position of strength to transform Ford for the future," Mr Bill Ford said.

"Jim Hackett is the right CEO to lead Ford during this transformative period for the auto industry and the broader mobility space."

The turbulence at Ford comes as all three Detroit carmakers are under pressure to prove they can avoid losses as the US auto market, source of the bulk of their profits, is slowing down after last year's record sales.

GM CEO Mary Barra is fending off attacks from hedge fund Greenlight Capital and its leader, Mr David Einhorn, who wants to install three new directors on the carmaker's board, and split GM's stock into two classes.

FiatChrysler Automobiles is fighting accusations by US and California regulators that it used software to cheat on diesel emission tests, while chief executive Sergio Marchionne has, so far, been unsuccessful in his effort to find a merger partner for the company.

Mr Fields outlined a variety of initiatives to confront challenges from technology companies, such as Alphabet, that want to control a future of autonomous, data-intensive vehicles.

However, Ford dismayed investors earlier this year by forecasting lower profits for this year and higher costs for its investments in "emerging opportunities".

On Friday, Silicon Valley electric car maker Tesla was valued at US$51 billion (S$71 billion), more than Ford's US$43 billion.

Last week, Ford said that it would cut 1,400 jobs in North America and Asia through voluntary early retirement and other financial incentives.

Mr Fields earned US$22.1 million last year.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 23, 2017, with the headline 'Ford replaces CEO as profits slide'. Print Edition | Subscribe