Ford Motor Company (NYSE:F) announced a big shakeup on Monday morning: CEO Mark Fields will leave the company as part of a larger reorganization of Ford's business structure.
Ford's new CEO will be Jim Hackett. Hackett, currently the head of Ford's future-tech subsidiary, is the former CEO of Steelcase, where he led a turnaround. Hackett first joined Ford's board of directors in 2013 and took on his most recent role last year.
A new leadership team and structure for Ford
Fields' departure is part of a larger shakeup of Ford's organizational structure. The new structure has three broad segments, each led by a well-regarded Ford veteran:
- Jim Farley becomes executive vice president and president of global markets. He will assume responsibility for Ford's regional business units and the Lincoln luxury brand as well as global marketing, sales, and service. Farley is currently head of two of Ford's regional units, Europe and Middle East and Africa.
- Joe Hinrichs becomes executive vice president and president of global operations. He will take over product development, manufacturing and labor affairs, and environmental and safety engineering. Hinrichs is currently head of Ford's North America and South America regional units.
- Marcy Klevorn becomes executive vice president and president of mobility. Klevorn will succeed Hackett as chief of Ford Smart Mobility LLC, the subsidiary charged with developing Ford's autonomous vehicles and future mobility-related businesses. Klevorn is currently Ford's chief information officer.
All three appointments are effective as of June 1. Ford said it will announce new appointments to the current positions held by the three at a later time.
Ford also announced two more changes, effective immediately:
- Mark Truby becomes vice president of communications, reporting -- significantly -- directly to executive chairman Bill Ford. He replaces Ray Day, who will stay on for another year in a consulting role.
- Paul Ballew becomes global chief data and analytics officer, reporting to Klevorn.
What Ford's chairman said about the changes
In a statement, executive chairman Bill Ford thanked Fields and praised the incoming team:
Mark Fields has been an outstanding leader and deserves a lot of credit for all he has accomplished in his many roles around the globe at Ford. His strong leadership was critical to our North American restructuring, our turnaround at the end of the last decade, and our record profits in the past two years.
We are fortunate to have three dynamic and talented leaders in Jim Farley, Joe Hinrichs and Marcy Klevorn taking on greater responsibility. Each has a track record of driving innovation, cost efficiency and delivering results around the world. They will work closely with Jim Hackett to lead Ford's day-to-day operations, build our brand and capitalize on emerging opportunities.
What's driving all of this?
Recent reports have suggested that Ford's board had become frustrated by the company's sagging stock price since Fields replaced iconic CEO Alan Mullally in 2014. It's not hard to see why:
- Ford hasn't done a good job of communicating how and when its current heavy investments in future technology will pay off.
- The perceived tempo of change at Ford may have fallen behind that of rivals like General Motors (NYSE:GM), Toyota (NYSE:TM), and Volkswagen (NASDAQOTH:VWAGY), all of which are making bold, visible moves to prepare for an electrified, self-driving, shared-mobility future.
Reports have also suggested that the executive harmony carefully fostered by Mulally had faded under Fields, with infighting -- a longtime Ford problem -- on the rise. And apparently, Ford's board wasn't impressed by the job cuts Fields announced last week.
Long story short: It appears Bill Ford lost confidence in Fields, for reasons that go beyond the stock price. I expect Hackett to increase the pace of change and to more effectively make the case for Ford with investors, analysts, and influential business journalists.
What's next for Ford
Ford will hold a press conference later this morning. Your humble Fool will attend and will also try to get a few words with Ford's new leaders later today. Stay tuned.