By on February 25, 2020

A rocky past year hasn’t dislodged Jim Hackett from his lofty perch in the Glass House, nor does the CEO feel he’s destined for the door. This assertion comes after a dismal earnings report born of recalls, a botched product launch, and ongoing streamlining efforts, the latter of which hasn’t given Ford’s stock the bounce many had hoped for.

Why does Hackett feel so confident? Friendship.

Specifically, friendship with the one person who really matters: Chairman Bill Ford.

As reported by Bloomberg, the bond between Hackett and Ford is a strong one, perhaps insulating the CEO from flack arising from the company’s poor showing on Wall Street. It’s generally agreed that failure to move share prices in a sustained upward direction is what doomed Hackett’s predecessor, Mark Fields. Since that departure, Ford’s stock has resisted that long sought-after climb.

“Harmony in businesses is a good story,” Hackett told Bloomberg on 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.”

In a recent internal town hall, Hackett said the grim earnings report had no bearing on his job. He’s staying put.

The close connection between CEO and chairman has bought Hackett precious time. Shareholder opposition arose quickly under Hackett’s reign, with the CEO’s sedan-sinking plans and desire for electric mobility and automation leaving many wondering if the gamble would pay off. The automaker’s concurrent efforts to streamline its global businesses, bolster its Chinese strategy, and forge an alliance with Volkswagen gave investors food for thought, and a steady march of tried-and-true product introductions (read: trucks and SUVs) placated car-loving shareholders with visions of big margins.

That strategy hit a snag when the Ford Explorer and Lincoln Aviator launched last summer with serious quality control issues, forcing Ford into an expensive repair operation. The damage resulting from the launch earned the automaker a serious profit dive (and its investors a drastically diminished dividend). It also led to the punting (officially, retirement) of automotive boss Joe Hinrichs earlier this month and the elevation of Jim Farley to chief operating officer. That promotion came with a $2 million raise.

“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 needs 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.”

Ford’s stock is currently the lowest it’s been in a decade. At last report, the company’s share price was $7.56, down from $9.18 on February 4th (right before the earnings report landed). This, after the stock appeared to be stabilizing, and perhaps even recovering, in the summer months of 2019. When Fields left in May of 2017, share prices were flirting with $11.

[Image: Adam Tonge/TTAC]

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20 Comments on “Ford CEO Jim Hackett Not Going Anywhere, Says Ford CEO Jim Hackett...”


  • avatar
    cprescott

    I hope he is so committed to Ford that he can go down with the ship and never be seen again. This clown is unremarkable. Had he any talents, we’d already be seeing his accomplishments. The lack of ANY proves he needs to be tilled under and fragrant cowpies need to be mixed in with him.

  • avatar
    AnalogMan

    Steph, you hit the nail on the head. The only reason Hackett both got the job of CEO and remains in it is because of his friendship with Bill Ford Jr.

    It’s human nature that we all prefer to do business with and just generally be around people we like. But just because someone is a friend doesn’t mean they are qualified to do a particular job. Especially a job as difficult as being the CEO of a huge multi-national company with fundamental problems in a tough, changing industry. This seems to be Bill Ford Jr.’s greatest weakness: I think he is terrible at hiring people. He frequently hires people based on friendship and his personal feelings and not their qualifications for the job. Then he compounds the mistake by keeping them in a job they are so clearly failing at for far too long.

    This is not usually the path to success in business, especially in an industry as difficult as cars. By any measure – stock price performance, market share, revenues – Hackett is not working out for Ford. It was a mistake to place him in the position, and just perpetuates the mistake by not removing him. But then, that seems to be the American way in business, to promote someone to their first level of incompetence.

    A friend of mine is a recently retired senior executive from Ford, and he confirms this observation. I’ve experienced it myself in my unrelated field with venture capitalists. VC’s invariably fund companies of their friends, and place their personal friends in senior management positions at their portfolio companies. Then they wonder and bellyache about why only 1 out of every 10 or 20 of their companies succeed.

    • 0 avatar
      dukeisduke

      Your comment is right on target. Peter De Lorenzo over at The Autoextremist also made the point about the Bill Ford-Jim Hackett connection in his recent Rant about the “retirement” of Joe Hinrichs and the elevation of Jim Farley.

      Bill Ford has too much invested in Hackett, and I’m afraid it will drag the company down. Wall Street is definitely not a fan of Hackett, and I don’t think the “True Believers” (PMD’s term for the designers and engineers who are responsible for the products) are Hackett fans, either.

  • avatar
    detlump

    I just heard this on Bloomberg radio and laughed to myself. Good points above too.

    I think the Ford family has struggled with separating friendships from business. It certainly extends to the Detroit Lions.

    I find it interesting that by some reports, Henry Ford was not particularly “cuddly” and many people didn’t like working with or for him. His personality also nearly destroyed the company too. So maybe this is the pendulum swinging back the other way.

    I have to think that somewhere in the Ford family is the thought that they don’t want to be the ones who destroy the company though. Not many companies survive this many generations, though inertia can carry one a long way, particularly in a hard to enter industry like automobiles.

    I hope for the sake of all the people who work hard at Ford and try to do their jobs that the company survives and thrives again. Right now it doesn’t look too good.

    Pretty soon the Chinese will be selling cars here, only complicating matters.

  • avatar
    SCE to AUX

    Bill Ford was wise enough to remove himself as CEO back in 2006. He won’t let Hackett destroy the company.

  • avatar
    ToolGuy

    I am finishing “American Icon” (Bryce G. Hoffman’s 2012 book, TTAC-assigned reading), and interestingly, that perspective makes Ford’s recent moves even more confusing.

    I do know that I would avoid making 50-year projections (or alluding to 50-year performance trends) in public.

  • avatar
    deanst

    Good friend or not, Hackett is toast if the F150 launch is botched.

  • avatar
    CKNSLS Sierra SLT

    Photos of the new redesign (really looks like a “refresh) of the Ford F150 are starting to pop up around the web. While evolutionary-there is nothing-IMHO to have conquest sales from other brands. So-I expect the volume sold to remain where it is now-which is basically flat.

    I believe that within 5 years Ford will not exist as it is today. Either it will be absorbed by another car company-or even bought by the Chinese.

    • 0 avatar
      jimmyy

      J am a Ford hater. As a young degreed engineer, they badly underpaid and they were too interested in diversity. So, I left. Then, I had a few FoMoCo produccts that could not even catch a bid at trade in. So, I am biased, but the F150 is the best of the best, and the new pictures show they are not going to ruin a good thing. In my opinion, the 2021 F150 is a home run … like out of the park style. The new Explorers are not bad either, but I stay away because it only comes Turbo. Other than that Toyota and Honda and Porsche rule everything else.

      • 0 avatar
        jimmyy

        So, all Ford needs to do is get something else right and they will be around.

      • 0 avatar
        CKNSLS Sierra SLT

        Jimmyy-
        Over on the Ford boards they are looking at the shots of the new F150 and saying it shares body panels (mainly doors) with the previous F150. I don’t know how anyone can call it a “home run” when body panels are shared with the “old style”. You are certainly entitled to your views-but IMHO there isn’t enough “new” there to be a home run.

        • 0 avatar
          jimmyy

          Sharing current body panels is good news. Easy home run. The current F150 is just gorgeous so a little tweaking makes it only better. No one else can touch it for now. personally, I would be worried for them if they did a redesign. Just look at the new Silverado … they ruined a decent product. Easy to do that.

          • 0 avatar
            CKNSLS Sierra SLT

            Jimmyy-

            You must have not seen the new RAM. That’s a nice looking truck-and that model is seeing conquest sales-where the F150 sales are now flat. I own a 2018 Silverado-I purchased as soon as I saw pictures of the 2019s. So yes-we agree on that point.

          • 0 avatar
            Art Vandelay

            And given the overall sales numbers, most of those conquests are former GM owners. At the end of the day, Ford just needs to not screw it up as evidenced by the GM launches. Don’t make it ugly, make it nice inside…that’s Ford’s winning formula.

        • 0 avatar
          Art Vandelay

          The main complaints with the F150 are related to the interior materials and what not. People are pretty happy with both the styling and the powertrains. If they bring the interior to RAM levels it will continue to sell big.

          I wouldn’t be shocked to see some of the Mach E’s gizmos find their way in…just hope they are optinal as I wear work gloves about half the time I am driving my truck so knobs are a plus.

        • 0 avatar
          danio3834

          Ford’s doing the right thing with the redesign, even though it does nothing for me. Like the old one but slightly better is enough to get their loyal buyers to re-up.

  • avatar
    Matt51

    Ford CEO Jim Hackett Not Going Anywhere, Says Ford CEO Jim Hackett

    ha ha ha ha – that is what they all say right before they get fired.

  • avatar
    conundrum

    Jim Hackett approves of Professor Moonbeam, his philosophy alter ego. Moonbeam was the name Autoextremist gave him. Want to really shake your head at the weirdness? Read this from exactly a year ago:

    http://www.autoextremist.com/current/2019/2/23/hes-a-real-nowhere-man-sitting-in-his-nowhere-land-making-al.html

  • avatar
    Michael S6

    Several years ago, I bought Ford stock given it’s generous dividends. I figured that it was priced cheaply and can’t go down much. Bad mistake as Hackett hacked down Ford stock value by 35 percent. He eliminated the sedan lines and introduced two half baked SUVS. The explorer having to take remedial classes and still show up at the bottom of the class. The Escape chugging along on a 3 cylinder engine with cheap interior.
    Oh well, at least I have a tax deduction for two straight years on capital gain losses.

  • avatar
    TS020

    “I’m not going anywhere”

    -Disney CEO Bob Iger, one week ago. Probably.

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