Ford names Jim Farley as new CEO, Jim Hackett to retire

Ford Motor CEO Jim Hackett is retiring, leaving the company three years after being tapped to transform the automaker into a leaner, more competitive and profitable company while investing in technology and shifting towards electrification, automation and connectivity.

Jim Farley, who many believed was being groomed for the position, has been named president and CEO. Farley joined Ford in 2007 as global head of marketing and sales. He moved through the ranks of the company until 2019 when he was picked to lead Ford's new businesses, technology and strategy team. He was named COO in February, a decision that along with the sudden retirement of Ford's president of automotive, Joe Hinrichs, seemed to seal Farley's path to CEO.

The change to leadership and Hackett's exit will become effective October 1. Hackett will continue as a special advisor to Ford through March 2021.

My goal when I took on the CEO role was to prepare Ford to win in the future," Hackett said. The hardest thing for a proud, long-lived company to do is change to meet the challenges of the world it's entering rather than the world it has known. I'm very proud of how far we have come in creating a modern Ford and I am very optimistic about the future."

Hackett's turnaround plan was aimed at modernizing the company while making it fitter," a term he used back in 2017 several months after being named CEO. That plan included $14 billion in cost reductions over five years, a target that Ford said it could reach by increasing the use of common parts across its portfolio, building fewer prototypes and reducing the number of possible option combinations customers could order.

Ford also planned to shift its focus to its money makers - aka the trucks and SUVs that provided the heftiest gross margins. Three years ago, the company said it would take $7 billion away from cars and put it to work in those profit centers, vehicles like the Ford F-150, Ranger and the all-new Bronco. Ford has since announced plans to stop selling cars in North America - with the exception of the Mustang - in its shift to trucks and SUVs. The automaker has already stopped producing the Ford Taurus, Fiesta and C Max.

It also included a directive to put more money into electric vehicles, make connectivity a priority and modernize Ford's factories by adding robotics, 3D printing and virtual reality tools to speed up the design, development, and production of its vehicles.

Hackett accomplished many of those goals, but fell short in others, particularly around the day-to-day toil of making and shipping vehicles. Despite the launch of the all-electric Mustang Mach-E, a redesigned Ford F-150 and new Bronco series, Ford's share price languished. The company has been hamstrung by the COVID-19 pandemic, which has disrupted its plans to streamline operations overseas and caused it to shut down factories in North America in the second quarter.

Meanwhile, the company has seen warranty costs balloon due to some quality problems with its vehicles. Not every vehicle launch went smoothly either. For instance, the rollout of the redesigned Ford Explorer was blundered and set the company back.

Still, Ford Executive Chairman Bill Ford, in a statement Tuesday, credited Hackett for his leadership.

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," said Ford. 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 life-saving equipment at the outset of the pandemic."