Toxic cleanup job awaits Hackett at Ford

DETROIT — Before Ford Motor Co.'s new "change agent" CEO Jim Hackett can move the company forward, he must clean up a toxic corporate culture that had permeated the top of the Glass House until his appointment.

Days before former CEO Mark Fields was ousted last month, he was angling to fire his top lieutenant, Joe Hinrichs, to relieve pressure he faced from a skeptical board of directors, sources told Automotive News. Fields' plan backfired, however, when the board decided instead to part ways with him and communications chief Ray Day, after a May 19 meeting.

It's the latest sign the automaker's One Ford culture went south once former CEO Alan Mulally retired, and is one of a host of challenges the new top executive faces.

The nation's No. 2 automaker is now piloted by a CEO with relatively little automotive experience who must figure out how to motivate a senior management team, assembled quickly, whose roles are still being defined. ​ The automaker — facing problems common to any company in transition — is still trying to parse out what its new vision will look like, even as it braces for more change this year when a round of voluntary buyouts sends 1,400 salaried workers home for good.

All this, while maintaining day-to-day business operations amid cooling U.S. sales, increasing competition from Silicon Valley and stockholder pressure to boost share price.

"I think his challenges in the very short term are going to be difficult," Michelle Krebs, senior analyst with Autotrader, said. "We're at the peak of the cycle; he's stuck with the products he's got. He does have some veterans who have worked there a long time, but he'll have to get everybody marching in the right direction."

Hackett's challenge with his management team will be in learning how to check egos and balance competitive personalities, insiders say.

"If we're going to solve problems with teams and get the best out of our people in the future, we have to get rid of the hierarchical mindset where people feel like that can't really participate because their boss is in the room," Executive Chairman Bill Ford told Automotive News after Hackett's appointment. "If we're going to empower our organization, they have to feel less hierarchical, so that everyone's opinion is listened to."

Among Hackett's duties: working with Hinrichs, Fields' would-be fall guy who has twice been passed over for the CEO job, and Jim Farley, a charismatic marketing guru who has in the past gone off-script with bold statements. The duo is splitting global operations in a new and somewhat unconventional structure, with Hinrichs in charge of product development and manufacturing, and Farley in charge of business regions, sales and marketing.

Other veteran executives, including Raj Nair and Hau Thai-Tang, must grapple with new roles. Nair moves from product development to head of North America, while Thai-Tang is now in charge of product development and purchasing around the globe, his former role.

And many will have to decide when and where their roles intersect. Marcy Klevorn's new job as president of mobility, for example, touches nearly every part of the business.

Most key players didn't officially begin their new roles until June 1.

Hackett has called off the weekly Thursday business plan review meeting — a practice begun by Mulally — each of his first two weeks at the helm, a source told Automotive News.

Cutting the hourslong formal gatherings was meant to move faster and allow senior managers time to more fully come to grips with their new responsibilities, the source said.

Adding to the complications is the concern over who among Dearborn's employees will take the early retirement buyouts in the current round of layoffs, details of which will go out this month. Finance, legal, human resources, communications, government, marketing, sales and service department workers are all affected — both in North America and Asia.

Ford, during Hackett's introduction, noted the company faces three challenges: re-energizing the team, sharpening operations and creating new business.

"Any one of those is a big task," he said. "We have to do all three, and I'm very confident that we can and that we will under Jim's leadership."