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Ford's Farley rode iconic Ford brands, customer needs to CEO's office

Jim Farley rose through the ranks to become Ford Motor Co.'s next CEO by understanding what the customer wants, leveraging the Blue Oval's icons and learning from the successes of others, industry observers say.

Farley, 58, will replace CEO Jim Hackett on Oct. 1, the company confirmed Tuesday, returning Ford's top job to an industry veteran schooled at Toyota Motor Corp. and who brings an extensive history in sales and marketing. Now three years into an $11 billion restructuring, Ford is poised to use his plans for capitalizing on data and new technology to speed its shift toward an Auto 2.0 future of autonomous, connected and electrified vehicles.

Ford Motor Co.'s next CEO, Jim Farley, addresses the CES 2018 technology show in Las Vegas.

"We come back to having a car guy, a guy from the auto industry, where Hackett came from the outside," said David Kudla, CEO and chief investment strategist for Grand Blanc-based Mainstay Capital Management LLC. "Inside the company, that instills confidence. (Farley's) been someone who shows he can execute. That's what the company needs right now."

More:Ford's Farley to replace Hackett as CEO, focusing on growth, acceleration

Farley's promotion earlier this year to chief operating officer made him a lead contender for CEO — a $2.5 million stock option package was offered should he have been passed over almost guaranteed it. He was charged with consolidating oversight of the automotive business of manufacturing and global markets with work he had been overseeing as president of new businesses, technology and strategy since April 2019. He says he sees opportunity in connectivity, commercial vehicles and data analytics.

"The real engine in our business is moving quickly from petrol and fossil fuels to data," Farley said in April. "Our commercial business is a powerhouse. And we have the opportunity to go from selling these powerhouse products to building a whole digital business of services and data that these customers are ready for."

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

He has tried to surround himself with the right people for those tasks, promoting the former head of Ford's Team Edison on autonomous and electric-vehicle development and wooing a retired Israeli Intelligence Corps officer to lead the automaker's global data insight and analytics operations.

"He's brought on a team of people that have a lot of experience and have done a lot of good things over the past several years," said Sam Abuelsamid, a principal research analyst for Guidehouse Insights. "I think they are on the right path. The key now is to actually execute on that."

Prior to joining Ford in 2007, Farley was an executive for Toyota. Since 1990, he helped to launch the Scion brand and served in various roles in marketing for the Japanese automaker. Eventually, he led the Lexus luxury brand — all the while learning the Toyota way that vexed two generations of Detroit auto industry leadership.

But Ford was in his blood. His grandfather, Emmet Tracy, began working at the Blue Oval's River Rouge plant in 1913. He was an inspiration to his career in the industry, a connection Farley mentions often.

James D. Farley Jr. was born in 1962 in Argentina. His father was a banker. His cousin is the late Chris Farley of "Saturday Night Live" fame. He attended Georgetown University in Washington, D.C., where he earned a bachelor’s degree in economics and computer science. He later got his master's in business administration with a focus in finance from the University of California, Los Angeles. He and his wife, Lia, today have three children.

Farley joined Ford in 2007 as its global head of marketing and sales. He was a key member of former CEO Alan Mulally's team to return Ford to profitability. A year later, Farley launched the "Drive One" campaign that aimed to deliver consistency after frequent switches in strategy. He went on to lead the Lincoln luxury unit, the South American division and then the European business — a traditional breeding ground for Ford CEOs. In 2016, the European operations under Farley posted record profitability, record margins and increased sales.

"He did some kind of miracle in Europe, where Ford was a drudge," said Ferdinand Dudenhöffer, a professor of automotive economics at the Center for Automotive Research at the University of Duisburg-Essen in Germany. "It was a dilemma for years and years and years. Ford was a company in a permanently restructuring process. Farley was one guy who managed to turn around the business, to make it sustainable."

He did so by improving the product, Dudenhöffer said, making the Ford Fiesta and Focus sedans more consumer-friendly that led them to grow in popularity. Premium trims were added to vehicles like the Mustang to better compete against products from BMW and Audi. And Farley put greater focus on Ford's commercial vehicles business, an emphasis he repeated Tuesday.

"When he got the job, he wanted to see how others were performing, how Renault and Peugeot and others were running the business," said Philippe Houchois, an analyst with Jefferies Group LLC in the United Kingdom. "There was a humbleness that I think served him well."

Farley likes to compete, too, intensely. In a 2011 book, he is quoted as professing to "hate" GM and promising that Ford would "beat on them, and it's going to be fun."

The marks of Farley's success have been leveraging its iconic brands, Abuelsamid said. As various styles of crossovers proliferated in Europe, Ford shifted its design development to meet the needs of consumers, offering the car-like Escape and now the off-road Bronco Sport for those looking for more adventure.

"Farley's real strength is understanding the customer and making sure you get the right product and you provide it the right way," Abuelsamid said.

That has extended into Ford's electrification strategy, which has evolved from mere compliance with emissions regulations to the introduction of products like the new Mustang Mach-E SUV and the forthcoming F-150 pickup, electric versions of Ford's most iconic models.

"They copied a lot of what Tesla has succeeded and built on that," Abuelsamid said. "They were producing product that didn't really excite anyone, and they're turning that around."

That energy and excitement channeled with clear goals is essential for Ford's success into the future, said Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor. Experts have drawn comparisons between Farley and Mulally for their understanding of the product.

Mulally, often celebrated for his success in helping Ford survive the global financial meltdown almost a dozen years ago, "changed the whole aura of Ford," she said. The "One Ford" culture he developed inspired collaboration and innovation, though under his successors that has deteriorated.

Farley's "words this morning, the impression or the way he spoke, he seemed to be speaking to the people of Ford and wanting to engage with them," Bailo said. "If the objectives are fuzzy or keep changing, it leaves a cloud. Making those clear objectives for what is the future direction of the company is key to the automaker's success."

bnoble@detroitnews.com

Twitter: @BreanaCNoble

jgrzelewski@detroitnews.com