Former Ford CEO Mark Fields fashioned himself an agent of change, promising to transform a Rust Belt auto manufacturer into a high-tech “mobility company.” But three years after taking the helm, Fields has been tripped up by changes beyond his own control.
The 56-year-old New York native was summarily sent out to pasture, Ford announced Monday, replaced by former Steelcase CEO Jim Hackett. That, along with a series of other high-level management moves, appears to have been months in the making, reflecting the growing frustration among major investors — including the founding Ford family — over weak sales, declining earnings and a stock price down 40 percent since Fields stepped into the CEO role in July 2014.
“Mark had a tremendous career at Ford and had done great things,” Chairman Bill Ford Jr., the grandson of company founder Henry Ford, said during a Monday morning news conference. “He put us in a great position. I'm very thankful to Mark. But this is a time of great change and fortunately we have a transformational leader,” Ford said, referring to new CEO Hackett.
Officially, Fields tendered his resignation last Friday, “after a discussion he and I had,” Chairman Ford said during a subsequent interview on CNBC. But the speed with which a successor was named suggested to industry observers it was only a matter of time, and a question of whether Fields, a 28-year Ford veteran, would jump or be pushed.
Field Marshaled in Change
Things looked a lot more promising just three years ago, when Fields stepped in for the retiring Alan Mulally. Fields was the protégé of the former Boeing executive, who guided Ford through the Great Recession. It was, in fact, Fields who largely crafted the “Way Forward” plan that let the second-largest U.S. automaker avoid the bankruptcies that nearly destroyed Detroit rivals General Motors and Chrysler.
But, after a promising start, a number of factors came into play leading to the management shake-up. “There’s no question that all of us were acutely aware that the stock had been languishing,” the Ford chairman acknowledged. But there has been growing concern that while Fields had a clear vision of where the auto industry is heading five, even 10 years from now, his grasp of current challenges may have been a bit more murky.
In recent years, Fields had been a frequent speaker at the Consumer Electronics Show, underscoring the way the automobile is becoming as much a digital device as a mechanical one. Under his leadership, Ford has rapidly expanded its spending on technology, early this year ordering a major expansion of its new Silicon Valley research center.
Technology Up Front
Barely a month ago Ford announced a three-way venture with Amazon and Starbucks that will allow motorists with the latest Ford Sync 3 infotainment system to call up the Alexa voice assistant and use it to have a cup of java waiting when they pull into the nearby coffee shop.
Ford was hailed by a recent Navigant Research study that declared it the industry leader in development of autonomous vehicles, ahead of Waymo, the self-driving spin-off from Google. Ford plans to have its first fully driverless vehicle in production by 2021.
The carmaker has launched car-sharing and ride-sharing projects and is exploring a variety of other new mobility concepts. If one bought into Fields’s vision, that is essential, as there will likely be far fewer consumers buying cars in 2025 than there are today, many owners expected to switch to sharing services like Uber and Lyft.
Fields also was betting that those car-share services would opt for electric, rather than gas-powered models.
In many ways, his vision echoed that of Elon Musk, and Wall Street has embraced Tesla — last month driving its stock up to the point it had a higher market capitalization than either Ford or General Motors. But the message failed to resonate with Ford investors — especially after the carmaker saw first-quarter sales dip 40 percent to $1.6 billion, with the full-year numbers also expected to decline.
“It will be many years before a lot of the stuff Fields has been working on will achieve a payoff,” said Joe Phillippi, a long-time Wall Street analyst and now head of AutoTrends Consulting.
Having a long-term vision isn’t a bad thing, Phillippi stressed, but critics contend Fields lost sight of Ford’s short-term challenges. Its passenger car fleet, models like the Fusion and Focus, have been allowed to age without necessary replacements. It has been slow to recognize and respond to some key market shifts, as well — notably the revival of the midsize pickup truck segment. General Motors got there in 2014 with models like the Chevrolet Silverado. Ford’s reborn Ranger truck is still a year away.
Déjà Vu All Over Again
Several observers said Fields’s ouster triggered a sense of déjà vu.
On October 30, 2001, Ford gave walking papers to Jacques Nasser, another visionary leader who set out to create a very different Ford. Nasser was an early proponent of in-car technologies. He also spent heavily on non-traditional operations, like auto parts and repairs and recycling. But critics felt he ignored the core of Ford’s business and, after Nasser’s ouster, Bill Ford — then handling dual roles as chairman and CEO — adopted a strategy dubbed “One Ford.”
That led the Detroit maker to return focus to its core brand, selling off a host of foreign luxury marques, including Volvo, Land Rover and Jaguar, that Nasser had acquired at a premium. While the “Blue Oval” Ford brand quickly rebounded, Mulally eventually killed off domestic Mercury, too. And even now, Lincoln, the homegrown luxury division, continues to struggle.
How much CEO Hackett will reverse the course set by Fields is uncertain. He was, in fact, heading Ford’s Smart Mobility unit for the last year, so Hackett seems unlikely to completely walk away from many of the projects Fields set in motion. But Chairman Ford made it clear the new chief executive also will have to not only “drive innovation” for the long haul, but improve the carmaker’s cost efficiencies and “deliver results around the world.”
Boosting that stock price is certain to be one of the metrics by which the 62-year-old Hackett will be judged.