Ford shifts more execs as demand for a plan grows

Ian Thibodeau
The Detroit News

Correction: A previous version of this story incorrectly stated Joy Falotico's previous title.

The latest executive shift within Ford Motor Co. came Thursday as industry experts and Wall Street wait for the Blue Oval to prove it has a plan to drive growth and fund an uncertain future — and whether the right team is in place to execute that plan.

Kumar Galhotra

Ford officials say they have all the right people in place. But as pressure mounts within the executive ranks to prove there’s a way forward, the battlefield promotion of the former chief marketing officer to president of North America brought yet another leadership shakeup.

Ford announced Thursday that Kumar Galhotra will head Ford’s North American operations, taking over for North American President Raj Nair who was ousted Wednesday for unspecified “inappropriate behavior” deemed inconsistent with Ford’s code of conduct. The duties of five other Ford executives shifted as part of the latest reorganization.

The dismissal and subsequent changes are another stutter-step for CEO Jim Hackett, new to the job last May after Mark Fields was shown the door. A few weeks ago, Jason Luo, the former chairman and CEO of Ford Motor Co.’s Chinese operations, resigned for unspecified the company said were for “personal reasons that predate his time at Ford.”

Hackett’s task is to change the ingrained culture within Ford and retool the company so it’s equipped to handle an uncertain future. With Ford stock trading at some of the lowest levels since Hackett assumed leadership, the automaker has yet to deliver news that excites Wall Street – something “change-agent” Hackett was brought in to do.

The most recent shake-up is a distraction at best, believes David Cole, chairman emeritus of the Ann Arbor-based Center for Automotive Research.

“(Hackett’s) role is kind of to bring people together and get the company back on track,” said Cole. “These kinds of things are just disruptions that slow the process down. The CEO’s role now is to stabilize the company, get it moving forward. I think they’ve got some tremendous people, but you’ve got a house to clean before you can get to that point.”

Jim Farley, Ford president of global markets, told The Detroit News by telephone Thursday that the latest change-up in the ranks comes as Ford pushes to “redo” its car and SUV lineup, and introduce a slate of new products in North America.

Galhotra will report to Farley starting March 1. The 52-year-old executive was head of Ford’s Lincoln brand since 2014. He oversaw the brand’s global operations, including a push into the Chinese market, the reintroduction of the Continental luxury sedan and the launch of the all-new Lincoln Navigator that the company can’t make enough of. He worked on the latest rebrandings of the luxury make that’s been in search of an identity for years.

Farley said Galhotra will be charged with bringing those efforts to Ford in North America. He said Galhotra and his replacement as vice president of Lincoln and Ford’s chief marketing officer, Joy Falotico, 50, will play vital roles as Ford rolls out new products.

Galhotra steps into a new role with a steep learning curve, according to Jessica Caldwell, executive director of industry analysis at analysis company Edmunds. She said success is critical as the Blue Oval moves to refresh its lineup, cut costs and make a case to Wall Street that those products will fund a clear plan for the future.

She says Nair’s departure threatens to destabilize a company in the middle of a massive change under Hackett. But Galhotra also has a history with Ford, and if the company can deliver soon on promises for a clear path forward, the changes announced Thursday wouldn’t be seen as such a problem.

“Everything seems a bit pie-in-the-sky without a lot of details,” Caldwell said. “There’s a major sales decline, Ford has struggled with a car lineup. Another shakeup is not necessarily what they need. Kumar will be taking these challenges head-on. They’re tough.”

But David Kudla, CEO and chief investment strategist of Mainstay Capital Management LLC in Grand Blanc, isn’t overly concerned.

“Ford’s bench at the executive level is deep enough that this should have minimal impact on operations and their strategy moving forward,” he said. “While this public departure is visually a black eye for Ford, it will heal up in due time with no lasting effect.”

Caldwell and some within the company compare Hackett’s position — and the overall company — to the situation faced by former CEO Alan Mulally, who in 2006 succeeded Bill Ford Jr.

The Blue Oval hadn’t had a clear way forward then, but Mulally is credited with steering the automaker through the recession and mortgaging its assets to narrowly avoid bankruptcy during the industry collapse of 2008-2009. Under his watch, the company sold off Jaguar, Land Rover, Aston Martin and Volvo to concentrate on Ford’s core brands. Mulally moved the company from $30 billion in losses during his first two years on the job, to 19 consecutive quarters of growth and $42 billion in profits before retiring in 2014.

Mark Fields succeeded Mulally. Fields lasted just under three years before being fired because the company’s board of directors believed the automaker was not positioned to succeed in an industry headed toward automation and electrification. Ford stock declined roughly 40 percent during Fields’ tenure.

Farley, speaking on the phone Thursday from California, where he was meeting with the company’s top 100 dealers to go over the plans for new products, compared the questions facing Ford to those he encountered when he joined the company in 2007.

“I was part of the management team in ’08,” he said. “We really built a vibrant company. These are the times when we make those calls to put in the foundations for the next step of growth. The automotive business is the foundation of our company.”

Farley said he’s never been more confident in the company. And his counterpart Joe Hinrichs, president of global operations, had a swagger about him in early February when walking the floor of Ford’s Kentucky Truck Plant where the company is accelerating production on the very profitable Navigator and Expedition.

“It’s go time,” Farley said. “The competitive fires are burning at Ford Motor Co.”

Twitter: @Ian_Thibodeau



Here are the executive changes announced Thursday:

■Kumar Galhotra, 52, appointed group vice president and president, Ford North America, replacing Raj Nair. Galhotra formerly was Ford’s chief marketing officer and head of the Lincoln brand. He reports to Jim Farley, Ford president of global markets.

■Stuart Rowley, 50, named vice president and chief operating officer of Ford North America. He formerly was vice president of strategy. Rowley reports to Galhotra.


■Joy Falotico, 50, succeeds Galhotra as vice president of Lincoln and Ford’s chief marketing officer. She had been group vice president and chairman and CEO of Ford Credit, the company’s financial services arm. Falotico reports to Farley.

■David McClelland, 48, named vice president of Ford Motor Co. and CEO of Ford Credit. He most recently was Ford Credit’s executive vice president of marketing and Asia Pacific. He reports to Bob Shanks, Ford chief financial officer.

■John Lawler, 51, becomes vice president of strategy, the position Rowley is leaving. Lawler previously was chairman and CEO of Ford China, and most recently was Ford’s corporate controller. He reports to Shanks.

■Cathy O’Callaghan, 49, named vice president and corporate controller and chief financial officer of Global Markets. She currently is chief financial officer of Ford South America. She reports to Shanks and Farley.