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Ford, struggling in a changing industry, replaces its CEO

James D. Farley Jr. (left) will replace Jim Hackett as chief executive of Ford.
James D. Farley Jr. (left) will replace Jim Hackett as chief executive of Ford.Associated Press

NEW YORK — Ford Motor said its chief executive, Jim Hackett, will retire Oct. 1, ending a three-year run in which the automaker has tried to streamline its operations and focus its business on electric cars, trucks, and SUVs with mixed success.

Hackett, 65, will be succeeded by James D. Farley Jr., who had been named chief operating officer in February.

“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 William Clay Ford Jr., Ford’s executive chairman. The company, he added, is becoming “much more nimble.”

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Hackett, a former chief executive of Steelcase, an office furniture manufacturer that is much smaller and less complex, was named to the top job at Ford in May 2017, as the company’s business was slumping. He promised to revitalize Ford’s operations and steer the company toward vehicles that would generate profits and invest in emerging technologies like electric and self-driving vehicles.

The company is starting to introduce some of the models developed under Hackett, including a redesigned F-150 pickup truck and the Mustang Mach E, an electric SUV styled to resemble the storied sports car.

“We have lots of work ahead of us to complete our mission, but thanks to Jim, we are a very different company today than we were three years ago,” Ford said in a conference call to discuss the leadership change.

Hackett is credited with eliminating money-losing cars from Ford’s North American lineup in favor of more profitable pickups and SUVs. He formed alliances with Volkswagen, Indian automaker Mahindra and Rivian, a startup working on electric trucks in which Ford has invested. Hackett also accelerated plans to develop electric vehicles.

But so far, the turnaround has had little effect on the company’s bottom line and stock price. Ford’s profits fell in 2018 and 2019, dropping to $47 million last year. This year, the pandemic has hammered its business, and the company lost $876 million in the first half of the year.

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Wall Street analysts have criticized Hackett for stopping short of presenting a full turnaround plan with detailed financial goals and timetables. Ford had planned to do so early in his tenure but changed course and presented only broad targets and revealed its plans piecemeal as it rolled out specific initiatives and projects.

Ford shares were trading at $11 when Hackett arrived. The stock closed at $6.86 Tuesday, up 2.54 percent.

Hackett “faced challenges in technology changes and current operations without technology or auto industry experience,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry.

Investors value Ford at about $27 billion, just one-tenth the market capitalization of Tesla, the electric automaker that makes far fewer cars and has been around only since 2003.

Farley, 58, joined Ford in 2007 from Toyota Motor and has held a variety of jobs, including running the company’s marketing, its European operations and a new business strategy group.

Farley said his first priority is ensuring a smooth transition. He added that he is optimistic about the company’s prospects now that it has introduced the new F-150, a new Bronco SUV, and the Mustang Mach E, a potential Tesla rival slated to go into production late this year.

On his list of tasks are raising Ford’s profit margin in North America to 10 percent or more, cutting costs, and reviving the company’s sales in Europe, China, and South America.

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“I’m inspired by the momentum we are building,” Farley said in the conference call. “To fulfill our mission, we need to swing for the fences.”