DETROIT — Jim Hackett plans to retire Oct. 1 as CEO of Ford Motor Co., after a three-year tenure in which he empowered workers to make quicker decisions and started a broad restructuring effort that hasn’t yet bolstered profits.
Jim Farley, a former Toyota Motor Corp. executive and lifelong car enthusiast who was promoted to COO in February, will become Ford’s third CEO since Alan Mulally left six years ago, the company said Tuesday.
Hackett, 65, said the changes he instituted have taken root and he felt now was the right time to leave the company to what Executive Chairman Bill Ford called “the next generation.” Hackett will work with Farley over the next two months to ensure a smooth transition, the company said.
Hackett, a former CEO of furniture-maker Steelcase, implemented sweeping redesigns of Ford’s business after he was named CEO in May 2017 in an effort to improve what he called Ford’s “competitive fitness.” But Ford’s share price continued to fall, a metric that ultimately doomed his predecessor, Mark Fields.
Still, Bill Ford said he was pleased with what Hackett accomplished.
"I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future," he said in a statement. "Our new product vision – led by the Mustang Mach-E, new F-150 and Bronco family – is taking shape.
"We now have compelling plans for electric and autonomous vehicles, as well as full vehicle connectivity. And we are becoming much more nimble, which was apparent when we quickly mobilized to make lifesaving equipment at the outset of the pandemic."
Ford shares rose 2.54 percent to close at $6.86 in trading Tuesday on Wall Street.
Farley has held a number of roles with Ford since Mulally hired him away from Toyota in 2007, including stints overseeing its marketing and leading its European operations. His appointment as COO earlier this year made it clear that he was the leading candidate to eventually succeed Hackett.
“I love Ford and I am honored by the opportunity to serve and create value for Ford’s employees, customers, dealers, communities and all of our stakeholders,” Farley said in a statement. “Jim Hackett has laid the foundation for a really vibrant future and we have made tremendous progress in the past three years. I am so excited to work together with the whole Ford team to realize the full potential of this great company in a new era.”
Ford in an SEC filing said Farley’s annualized base salary would increase to $1.7 million from $1.4 million.
Bill Ford said the company didn’t seriously consider outside executives.
“Everybody was getting very, very inspired by Jim Farley’s leadership,” he said on a media call. “Every time we threw some names around we always felt Jim Farley rose to the top.”