Howes: Ford's charge to new CEO Farley — 'step it up'

Three CEOs in less than four years leading the 117-year-old Blue Oval is not a picture of stability — and that’s why the move by Bill Ford and Ford Motor Co. directors to give Jim Farley the top job needs to deliver better results than the past two successors to superstar CEO Alan Mulally.

It's too strong to say this is a "last chance" for Ford to get it right, though there certainly will be (there already are) those who insist just that because, well, definitive gallows humor is a natural byproduct of a century-old industry in a company town.

But there's no question that Ford faces a lot of challenges. Nor should there be much question that the regencies of Mark Fields and, to a lesser degree, Jim Hackett squandered valuable time to manage a bifurcation of the industry split between profit-generating trucks and SUVs and an electrified future.

Don't take my word for it. Look at Ford shares — down roughly 35% during Hackett's tenure. Look at its margins in North America, tracking way behind those of hated General Motors Co. Look at the botched launch last year of the bellwether Explorer SUV and rising warranty costs, financial hits that hammered white-collar bonuses for 2019 and hastened the ouster of Farley rival Joe Hinrichs.

These and more are not necessarily proximate reasons for a leadership change atop the Glass House at this moment. But they are necessary context, as relevant as recent modest wins: second-quarter earnings, slammed by the coronavirus shutdown, came in much better than feared; and unveilings of the Mustang Mach-E electric SUV and the revived family of Bronco SUVs offered Hackett a high note to take his leave.

Yes, Hackett could see the future. He could discern how Ford and its assets could navigate a transportation world that aims to stay planted in two mutually exclusive worlds separated by technology. He also struggled to communicate his vision to people who've spent their whole working lives at Ford, in the auto industry or both.

Farley's charge, to borrow a racing term, is to "step it up." Investors bid lackluster shares more than 3% higher early Tuesday on the news that Farley would ascend to the top job, a signal that the street has been itching for new leadership at Ford to turbo-charge Hackett's fitness campaign and to deliver stronger financial results.

"It felt like a natural time to do it," Executive Chairman Bill Ford told The Detroit News. "By definition, when Hackett came in it was never going to be a long-term thing. This timing is about what I expected when I first talked to Jim three-and-a-half years ago. I really expect a lot of continuity here."

In the management team, maybe. But if Ford needs anything right now, it's clearly articulated direction unafraid of the competition or comparisons to it. If the brainy Hackett was the guy in 2017 to reorient Ford for future, Farley is the hard-nosed industry veteran needed to optimize the traditional business and integrate it into next-generation technology.

At least that's the bet Ford's directors are making with Farley, Bill Ford acknowledged: "He's very intense, he's very competitive, and I think those are good traits. He's really one of the very few people I've known in the entire auto industry who can bring technology and autos together."

Now Farley will get a chance to prove it. He said he didn't want to "make news" Tuesday, didn't want to say whether the Dearborn automaker would consider exiting under-performing global markets as GM already has. But he did use the media attention to send a message: "Ford Motor Company will do what is required to restructure our business for long-term profitability, as we need to. We're not done."

They can't be, or they would be done in the final sense of the word. A few hours after the company announced Farley's appointment as CEO, he took to Twitter to close a familial circle. Posting a picture of his grandfather's Ford employee car from 1918, Farley wrote:

"Thanks Granddad (Ford employee pic 1918) for inspiring us all to do our best and serve others!" Come Oct. 1, the grandson of Emmet E. Tracy will lead the company Henry Ford founded 117 years ago in Detroit, and one director who's been chief executive and witnessed every CEO succession since Henry Ford II retired says it's never easy.

"It's such a different job than anything you've prepared for," said Bill Ford. "There's no amount of training that can get you ready for it."

daniel.howes@detroitnews.com

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Daniel Howes is a columnist and associate business editor of The Detroit News. His column runs most Tuesdays, Thursdays and Fridays.