Ford has fired its current CEO Mark Fields amidst company’s lacklustre performance and onslaught of tech companies into the automaker’s domain. He is replaced by Jim Hackett who was heading company’s autonomous vehicle subsidiary known as Ford Smart Mobility.
Why was Mark Fired ?
During Mr. Fields’s three-year tenure Ford’s shares dropped a whopping 40 percent. Throughout his tenure as the company’s CEO he faced criticism from investors and Ford’s board for failing to expand the company’s core auto business and for not doing enough to steer the company to self driving connected car future.
The change came less than two weeks after Mr. Fields was sharply criticized during the company’s annual shareholders meeting for Ford’s deteriorating financial results.
Mr. Fields, 56, had been trying to strengthen Ford’s bottom line by cutting laying off atleast 1,400 salaried people from company but he simply couldn’t salvage the tumbling stock price. Also he couldn’t really execute effectively his strategy to slash costs and expand Ford’s lineup of trucks and sport utility vehicles, while also investing in autonomous and electrified vehicles.
Although Ford has promised to have a fully autonomous vehicle on the road by 2021, but despite spending heavily on self-driving research, Ford was struggling to keep pace with larger automakers such as General Motors and tech giants like Google, both of which have been testing self-driving vehicles.
Mr. Fields was also at the forefront of an abortive plan to build a $1.6 billion assembly plant in Mexico for small cars. The project was abandoned early this year as sales stalled and President Trump’s election brought pressure on Ford to make more vehicles in the United States.
Ford also had to do a number of safety recalls that have raised red flags about its overall vehicle quality.
Competition from Tesla and other companies :
The upstart electric-vehicle maker Tesla which recently surpassed G.M. and Ford in market capitalization is bringing a mass-market model to market later this year which is big worry for the company and is a direct attack on legacy auto makers forts.
Other than Tesla there is also onslaught of tech companies like Uber, Google’s Waymo and Lyft. Uber is already testing its self driving cars which it built after acquiring self driving truck company Otto. Waymo and Lyft have also partnered up in race to get more on road data.
Smart Mobility LLC :
Ford’s bet for future is its subsidiary company called Smart Mobility LLC. Company is centered in Palo Alto, a long way from Ford’s headquarters in Dearborn, Michigan. “You want it separate but connected, said Mark Shields in a Verge interview last year. “The reason we wanted to do it separate is because, you have to realize that we needed to give them the flexibility and the operating structure to be able to be competitive with other technology and mobility services companies that move really fast. We didn’t want to overlay them with the Ford bureaucracy.”
Ford Smart Mobility was formed in 2016 as an effort to accelerate the company’s metamorphosis into an auto and mobility company. Its aim was to aggressively pursue emerging opportunities and “be a leader in connectivity, mobility, autonomous vehicles, the customer experience and data and analytics,” according to Ford. Hackett’s promotion is a clear sign that Ford thinks the transformation isn’t happening quickly enough.