August 10, 2020 12:00 AM

‘Change agent' Hackett departs with mixed results

Outgoing CEO Jim Hackett thinks the company is better positioned financially than the balance sheet suggests. “Without the pandemic, I know what kind of quarters we would be having,” he said.

DETROIT — Part of Jim Hackett's deep-thinking management style involves sorting through problems using an imaginary bull's-eye with the words "now," "near" and "far" in concentric circles.

After three-plus years enacting sweeping changes as CEO of Ford Motor Co., Hackett departs believing he set the automaker up for success in the near term and into the future. But he never quite mastered the "now."

Ford's stock has fallen roughly 38 percent under Hackett's watch, and he couldn't overcome investors' initial impatience with a slow-developing restructuring plan, even after taking major actions such as cutting thousands of jobs and eliminating low-margin sedans. Ford's profits have disappointed in each of the past two years, and any financial progress this year was stunted by the coronavirus pandemic.

Hackett has flattened Ford's bureaucracy, paved the way for a more profitable vehicle portfolio and set up the company to be a player in connected technology. But a combination of self-inflicted wounds and forces outside Ford's control means the 65-year-old will leave the nation's No. 2 automaker with mixed results.

"I feel like I'm six months behind, maybe eight months behind, where I thought I'd be when I started on day one," Hackett told Automotive News last week.

He cited the company's struggles to launch the redesigned Explorer last year as the main reason for falling behind but also pointed to upcoming products including the Mustang Mach-E crossover and Bronco SUV as reasons for optimism. He also thinks the company is better positioned financially than the balance sheet suggests.

"Without the pandemic, I know what kind of quarters we would be having," he said.

‘Admirable job'

Ford's top executives

Jim Farley will be the 11th CEO of Ford Motor Co. starting Oct. 1. The company had a president but not a CEO before going public in 1956.

John Gray, 1903-06
A candymaker and banker from Detroit who invested in Henry Ford's new company and agreed to be its first president until his death three years later.

Henry Ford, 1906-18, 1943-45
The company founder introduced the Model T in 1908 and doubled workers' wages to $5 a day in 1914. He passed on the title of president to his son, Edsel, in 1919 but remained the automaker's driving force through the end of World War II, when his family forced him to cede control to his grandson, Hank the Deuce.

Edsel Ford, 1919-43
Edsel bought Lincoln Motor Co. in 1922 to compete with Buick and Cadillac and rolled out the Model A in 1927. He died of stomach cancer as the company was building tanks and B-24 bombers for Allied forces, prompting his elderly father to take charge again.

Henry Ford II, 1945-79
Still the company's longest-serving leader, Henry Ford's grandson presided over the creation of the hugely successful Thunderbird and Mustang, as well as the disastrous Edsel and Pinto. He hired the Whiz Kids, a group of 10 U.S. Army Air Forces veterans who revived the company's fortunes after the war ended, and he famously fired Lee Iacocca as president the year before he retired.

Philip Caldwell, 1979-85
After 73 years of family leadership, Caldwell guided the automaker through a turbulent time for Detroit, as Japanese automakers gained a foothold in the market and gasoline prices spiked. Ford introduced the Taurus, which became the country's top-selling car, weeks before his retirement.

Donald Petersen, 1985-90
Petersen introduced the idea of a product planning department and told management to create cars they would be "proud to park in their driveways." The philosophy increased Ford's market share, produced successes such as the Explorer and helped the company become more profitable than General Motors for the first time since 1924.

Harold Poling Harold "Red" Poling, 1990-93
Poling helped steer Ford through the recession of the 1980s, then found himself in charge during another downturn in the early 1990s. He took a hard line on spending, saying financial discipline was more important than creativity or product.

Alexander Trotman, 1993-99
A native of England, Trotman was Ford's first foreign-born CEO. He globalized many of Ford's operations so vehicles could share parts and platforms to reduce production costs.

Jacques Nasser, 1999-2001
Nasser created the Premier Automotive Group to make Ford a bigger player in the luxury market. His tenure was overshadowed by Ford's recalls of more than 20 million Firestone tires, and the scandal ultimately led to his firing.

Bill Ford, 2001-06
The fourth-generation CEO expanded Ford's portfolio of SUVs but eventually decided he needed to replace himself with an outsider. He hired Alan Mulally from Boeing and made himself executive chairman.

Alan Mulally, 2006-14
Mulally cut costs, sold off non-core brands and focused the company around a plan he called "One Ford." In the early months of his tenure, Ford presciently mortgaged most of its assets to secure a loan that allowed it to survive the Great Recession without a government bailout or bankruptcy filing.

Mark Fields, 2014-17
Fields aimed to transform Ford into a mobility company but was criticized for not paying enough attention to current products. Despite posting significant profits, shares of Ford dwindled in value, and the board of directors replaced him with Jim Hackett in an effort to make the company move faster.

Jim Hackett, 2017-2020
Hackett, a former furniture company CEO, was a Ford board member who was selected to head its Smart Mobility subsidiary before being tapped as Fields' successor. He cut costs as part of an $11 billion restructuring plan, but a continued lack of confidence among investors made the stock continue to slide.

Jim Farley, starting Oct. 1, 2020
Farley, hired from Toyota in 2007, is a lifelong car nut whose grandfather was one of Henry Ford's early employees. Farley previously ran Ford's marketing and European operations before a February promotion to COO made it clear that he was the top candidate to succeed Hackett.

Hackett assumed the chief executive role in May 2017 as a "cultural change agent" meant to clean up a toxic corporate culture and empower workers to make quicker decisions. After Ford's board of directors lost confidence in predecessor Mark Fields, Hackett was saddled with the responsibility of making Ford more competitive on electric and connected-vehicle technology.

"I was always impressed by the fact he was always thinking ahead," said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio. "He made a lot of good moves behind the scenes that I think he'll get more credit for as time goes on. I think he did an admirable job in very tough circumstances."

Hackett introduced phrases to the Ford lexicon such as "fitness," "clock speed" and "design thinking," and he tried to connect with employees through regular emails he called the "Huddle," a nod to his time playing football for the University of Michigan and his stint as its interim athletic director just before coming to Ford. But his abstract way of speaking hindered his ability to win the confidence of workers and dealers, especially early on.

After some dealers complained that Hackett was too aloof in his first year as CEO, he apologized and promised to be more accessible. In the end, many dealers came to speak positively about him and the changes he made.

"I don't know that you can give him a grade that isn't an A or a B, from a dealer perspective," Ricart said. "Now if you're an investor, you'll say that you aren't making any money on your investment ... but in the grand scheme of things, there's some hot product that's coming."

Hackett occasionally sparred with Wall Street analysts who questioned his vision and prodded him for more details.

"I think the plan was just slow in execution," said Jeff Schuster, president of global forecasting at LMC Automotive. "But there were some fundamental structural changes and developments that can hold."

Pandemic realization

Throughout his tenure, Hackett retained the support of Ford's board of directors and Executive Chairman Bill Ford, whom Hackett once called "a treasure of the highest order in this world."

Bill Ford said Hackett has set up the company for success.

"We now have compelling plans for electric and autonomous vehicles, as well as full vehicle connectivity," Ford said in a statement. "And we are becoming much more nimble, which was apparent when we quickly mobilized to make lifesaving equipment at the outset of the pandemic."

The pandemic ultimately led Hackett to realize it was the right time to step down.

He had planned to retire within the next year and had discussed the prospect during a meeting around Christmas with Bill Ford while the two were vacationing separately in California. He said he realized this spring that he could comfortably make way for COO Jim Farley to take over.

"When the pandemic hit, Jim Farley so distinguished himself," Hackett said. "There's no script; there's no plan. The team was voicing to me how the accomplishments they made came from his leadership."

Ultimately, it will be up to Farley to continue implementing the changes Hackett started. Hackett plans to stay on as an adviser through next year, and the two men share a deep respect.

"I, for one, have been changed as a leader because of Jim Hackett," Farley said. "Not only for his ambition for the company, that we will not cede our future to anyone including technology companies, but his ability to bring new ways of thinking into Ford that stick, that don't fall off the wall."