Home / Stocks / Ford Shares Hit 10-Year Low, But CEO Hackett Has Chairman’s Ear

Ford Shares Hit 10-Year Low, But CEO Hackett Has Chairman’s Ear

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”(Bloomberg) — Days after another dismal earnings report, Ford Motor Co. Chief Executive Officer Jim Hackett sent a blunt message during an internal town hall: I’m not going anywhere.

” data-reactid=”11″>(Bloomberg) — Days after another dismal earnings report, Ford Motor Co. Chief Executive Officer Jim Hackett sent a blunt message during an internal town hall: I’m not going anywhere.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”If there were any doubts in the crowd about that statement, Hackett underscored it by discussing the early retirement of Joe Hinrichs, a Ford president whom many had seen as a potential successor to the CEO. The comment was a surprising display of force from a man who had just overseen another disappointing quarter that deepened the sell-off in Ford stock during his almost three-year tenure.

The reason for such confidence: Hackett, 64, retains the backing of Executive Chairman Bill Ford.” data-reactid=”12″>If there were any doubts in the crowd about that statement, Hackett underscored it by discussing the early retirement of Joe Hinrichs, a Ford president whom many had seen as a potential successor to the CEO.

The comment was a surprising display of force from a man who had just overseen another disappointing quarter that deepened the sell-off in Ford stock during his almost three-year tenure. The reason for such confidence: Hackett, 64, retains the backing of Executive Chairman Bill Ford.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”While Wall Street has never really warmed to him, Hackett has managed to nurture a close relationship with the 62-year-old great-grandson of founder Henry Ford through frequent visits to each other’s offices, where they mind meld on a digitized future of transportation in which big data drives how automakers create self-driving and electric cars. The two are inseparable, say people familiar with their relationship, who asked not to be identified describing Ford’s inner workings.

” data-reactid=”13″>While Wall Street has never really warmed to him, Hackett has managed to nurture a close relationship with the 62-year-old great-grandson of founder Henry Ford through frequent visits to each other’s offices, where they mind meld on a digitized future of transportation in which big data drives how automakers create self-driving and electric cars. The two are inseparable, say people familiar with their relationship, who asked not to be identified describing Ford’s inner workings.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”“Harmony in businesses is a good story,” Hackett said with a chuckle during a phone interview Monday. “And it doesn’t burst out of lack of accountability at all.

It’s more, frankly, of a shared view of how much work we have in front of us to transform the company to be really viable for another 50-plus years.”” data-reactid=”14″>“Harmony in businesses is a good story,” Hackett said with a chuckle during a phone interview Monday.

“And it doesn’t burst out of lack of accountability at all. It’s more, frankly, of a shared view of how much work we have in front of us to transform the company to be really viable for another 50-plus years.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”The elevation of Ford’s other president, Jim Farley, to COO, and the departure of Hinrichs, 53, has rocked a company struggling to find its way in an industry undergoing wrenching change. Hinrichs’s abrupt exit completes a clean break from the era of Alan Mulally, who was celebrated for keeping the carmaker out of bankruptcy during the Great Recession.

Mulally was close to Hinrichs and believed he should have succeeded him as CEO when he retired in 2014, people familiar with his thinking said. Mulally declined to comment.

” data-reactid=”15″>The elevation of Ford’s other president, Jim Farley, to COO, and the departure of Hinrichs, 53, has rocked a company struggling to find its way in an industry undergoing wrenching change. Hinrichs’s abrupt exit completes a clean break from the era of Alan Mulally, who was celebrated for keeping the carmaker out of bankruptcy during the Great Recession.

Mulally was close to Hinrichs and believed he should have succeeded him as CEO when he retired in 2014, people familiar with his thinking said. Mulally declined to comment.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Farley’s Ascent” data-reactid=”16″>Farley’s Ascent

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Farley, 57, will brief investors Wednesday on how he intends to speed up Ford’s turnaround and perk up the stock, which has tumbled to the lowest in a decade. The shares slumped as much as 2.

1% on Tuesday to $7.41.

” data-reactid=”17″>Farley, 57, will brief investors Wednesday on how he intends to speed up Ford’s turnaround and perk up the stock, which has tumbled to the lowest in a decade. The shares slumped as much as 2.

1% on Tuesday to $7.41.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”The hard-driving marketing mastermind — and cousin of the late comedian Chris Farley — is embracing the new role with his signature intensity. Jim Farley is working late into the evenings and on weekends, reviewing all of the company’s plans, say people familiar with his actions.

Known as a quick study with an encyclopedic memory for data and details, he doesn’t suffer fools.” data-reactid=”18″>The hard-driving marketing mastermind — and cousin of the late comedian Chris Farley — is embracing the new role with his signature intensity.

Jim Farley is working late into the evenings and on weekends, reviewing all of the company’s plans, say people familiar with his actions. Known as a quick study with an encyclopedic memory for data and details, he doesn’t suffer fools.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”“In the context of our industry and how it’s changing, we have to accelerate,” he said in a Feb. 7 interview.

“We cannot wait years and years.”” data-reactid=”19″>“In the context of our industry and how it’s changing, we have to accelerate,” he said in a Feb.

7 interview. “We cannot wait years and years.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”While Hackett says he has absolutely given Farley a mandate to accelerate, he also defends the deliberate approach he and Bill Ford are taking and says it’s rooted in a company still run by the founding family, which takes a long-term view.” data-reactid=”20″>While Hackett says he has absolutely given Farley a mandate to accelerate, he also defends the deliberate approach he and Bill Ford are taking and says it’s rooted in a company still run by the founding family, which takes a long-term view.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”“Others will say, well, why has it taken so long? Or why are you contemplating this so rigorously? It’s because we’re balancing the ne of shareholders versus employees, suppliers, dealers,” Hackett said. “We’re not willing to lose the hearts and minds of our people to have one quarter exceed earnings.

”” data-reactid=”21″>“Others will say, well, why has it taken so long? Or why are you contemplating this so rigorously? It’s because we’re balancing the ne of shareholders versus employees, suppliers, dealers,” Hackett said. “We’re not willing to lose the hearts and minds of our people to have one quarter exceed earnings.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Hinrichs’s Stumble” data-reactid=”22″>Hinrichs’s Stumble

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Farley and Hinrichs were elevated less than a year ago to be company presidents, with Farley focused on the future and Hinrichs on managing the automotive here-and-now.” data-reactid=”23″>Farley and Hinrichs were elevated less than a year ago to be company presidents, with Farley focused on the future and Hinrichs on managing the automotive here-and-now.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Within months of taking on their roles, Farley won plaudits for leading Ford’s talks with Volkswagen AG that lead to a tie-up last summer to jointly develop the driverless and electric cars that Bill Ford and Hackett are so excited about. Participants on all sides of that deal, which also involved self-driving startup Argo AI, praise Farley’s mastery of the materials and his negotiating skills that helped keep the talks on track.

” data-reactid=”24″>Within months of taking on their roles, Farley won plaudits for leading Ford’s talks with Volkswagen AG that lead to a tie-up last summer to jointly develop the driverless and electric cars that Bill Ford and Hackett are so excited about. Participants on all sides of that deal, which also involved self-driving startup Argo AI, praise Farley’s mastery of the materials and his negotiating skills that helped keep the talks on track.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Fans of Farley say Hinrichs was meanwhile moving too slowly to fix what ails Ford. They point to the botched launch of the new Explorer sport utility vehicle last year that weakened North American earnings for a company that isn’t consistently making money elsewhere in the world.

” data-reactid=”25″>Fans of Farley say Hinrichs was meanwhile moving too slowly to fix what ails Ford. They point to the botched launch of the new Explorer sport utility vehicle last year that weakened North American earnings for a company that isn’t consistently making money elsewhere in the world.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”When Hinrichs dispatched a vice president last year to investigate problems at Ford’s Explorer plant in Chicago, some subordinates didn’t even show up for meetings to discuss the situation, said a person familiar with the visit. For a high-ranking executive to be disrespected like that was seen as evidence that Hinrichs didn’t have full control of the situation at the plant, the person said.

Hinrichs declined to comment.” data-reactid=”26″>When Hinrichs dispatched a vice president last year to investigate problems at Ford’s Explorer plant in Chicago, some subordinates didn’t even show up for meetings to discuss the situation, said a person familiar with the visit.

For a high-ranking executive to be disrespected like that was seen as evidence that Hinrichs didn’t have full control of the situation at the plant, the person said. Hinrichs declined to comment.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”The Explorer launch failures undercut Hinrichs’s reputation as a manufacturing whiz. He rose to prominence under Mulally, a fellow engineer, and won kudos for successfully overseeing the complicated launch of the aluminum-bodied F-150 six years ago.

In 2018, he played a pivotal role in getting those profitable pickups rolling off assembly lines again after a supplier’s factory exploded and briefly disrupted truck production in 2018.” data-reactid=”31″>The Explorer launch failures undercut Hinrichs’s reputation as a manufacturing whiz.

He rose to prominence under Mulally, a fellow engineer, and won kudos for successfully overseeing the complicated launch of the aluminum-bodied F-150 six years ago. In 2018, he played a pivotal role in getting those profitable pickups rolling off assembly lines again after a supplier’s factory exploded and briefly disrupted truck production in 2018.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Mulally’s Legacy” data-reactid=”32″>Mulally’s Legacy

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Mulally’s legacy has grown complicated within Ford, with the company moving away from some of his rigorous practices that encouraged executives to admit mistakes and seek help fixing them, rather than let them fester. Mulally also bet heavily on small, fuel-efficient cars, which fell out of favor as gas prices abated.

Hackett is pulling Ford out of the sedan market.” data-reactid=”33″>Mulally’s legacy has grown complicated within Ford, with the company moving away from some of his rigorous practices that encouraged executives to admit mistakes and seek help fixing them, rather than let them fester.

Mulally also bet heavily on small, fuel-efficient cars, which fell out of favor as gas prices abated. Hackett is pulling Ford out of the sedan market.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”And the focus on Mulally as Ford’s savior is said to have irked Bill Ford, who also played a key role in securing a life-saving loan that sustained the company through the downturn that wiped out the rest of Detroit.” data-reactid=”34″>And the focus on Mulally as Ford’s savior is said to have irked Bill Ford, who also played a key role in securing a life-saving loan that sustained the company through the downturn that wiped out the rest of Detroit.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Hinrichs is seen as Mulally’s last acolyte in Ford’s upper management.” data-reactid=”35″>Hinrichs is seen as Mulally’s last acolyte in Ford’s upper management.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”“Ford is now, with the departure of Joe Hinrichs, back to where it was when everything started falling apart last time,” said Bryce Hoffman, author of “American Icon: Alan Mulally and the Fight to Save Ford Motor Company,” published in 2012. “But now it’s in that position in a much more competitive marketplace and in a much more challenging business environment.

”” data-reactid=”36″>“Ford is now, with the departure of Joe Hinrichs, back to where it was when everything started falling apart last time,” said Bryce Hoffman, author of “American Icon: Alan Mulally and the Fight to Save Ford Motor Company,” published in 2012. “But now it’s in that position in a much more competitive marketplace and in a much more challenging business environment.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Hackett denies that there is any reconsideration of the Mulally era within Ford.” data-reactid=”37″>Hackett denies that there is any reconsideration of the Mulally era within Ford.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”“I’ve never heard anything but praise for Alan Mulally. He’s really highly regarded by me, by the board, by Bill,” Hackett said.

“We spend zero time and stress about that.”” data-reactid=”38″>“I’ve never heard anything but praise for Alan Mulally.

He’s really highly regarded by me, by the board, by Bill,” Hackett said. “We spend zero time and stress about that.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Bill Ford’s Silence” data-reactid=”39″>Bill Ford’s Silence

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Bill Ford hasn’t made any public appearances early this year as Ford shares have dipped back below $8 for the first time January 2019. That month, he endorsed his embattled CEO at the Detroit auto show and appealed for patience with Hackett and his $11 billion turnaround plan.

He declined an interview requested though a company spokesman.” data-reactid=”40″>Bill Ford hasn’t made any public appearances early this year as Ford shares have dipped back below $8 for the first time January 2019.

That month, he endorsed his embattled CEO at the Detroit auto show and appealed for patience with Hackett and his $11 billion turnaround plan. He declined an interview requested though a company spokesman.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Now that Farley has taken over Hinrichs’s duties, he is moving quickly to light a fire under his team. Farley is conducting meetings with Ford’s entire top leadership, and more executive changes are expected.

” data-reactid=”41″>Now that Farley has taken over Hinrichs’s duties, he is moving quickly to light a fire under his team. Farley is conducting meetings with Ford’s entire top leadership, and more executive changes are expected.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”Those changes won’t include Hackett, despite some on Wall Street having openly questioned how long his tenure will last. With the executive chairman’s backing, Hackett will keep Farley waiting for an untold period to prove he’s the right pick to take over.

” data-reactid=”42″>Those changes won’t include Hackett, despite some on Wall Street having openly questioned how long his tenure will last. With the executive chairman’s backing, Hackett will keep Farley waiting for an untold period to prove he’s the right pick to take over.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”But Farley is clearly in ascent. Even the trait once viewed as his biggest weakness — his hair-trigger temper — is now being recast as just the skill needed to effect change in Ford’s hidebound culture.

” data-reactid=”43″>But Farley is clearly in ascent. Even the trait once viewed as his biggest weakness — his hair-trigger temper — is now being recast as just the skill needed to effect change in Ford’s hidebound culture.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”“He’s pretty intense,” David Whiston, an analyst for Morningstar with the equivalent of a buy rating on Ford shares, said of Farley. “I’m glad Ford has him.

”” data-reactid=”44″>“He’s pretty intense,” David Whiston, an analyst for Morningstar with the equivalent of a buy rating on Ford shares, said of Farley. “I’m glad Ford has him.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”(Updates with Tuesday trading in sixth paragraph)” data-reactid=”45″>(Updates with Tuesday trading in sixth paragraph)

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”–With assistance from Christoph Rauwald.” data-reactid=”46″>–With assistance from Christoph Rauwald.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.

8em)–sm” type=”text” content=”To contact the reporter on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net” data-reactid=”47″>To contact the reporter on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.

net

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net” data-reactid=”48″>To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net;David Papadopoulos at papadopoulos@bloomberg.

net

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