Jim Farley's plan for Ford: improve quality, reduce costs, speed change
On his first day as Ford Motor Co.'s new president and CEO, Jim Farley came armed with a plan to reshape the Blue Oval's operations and leadership around areas he believes will drive growth, including commercial, electric and more-affordable vehicles.
Employees were briefed on the plan during a virtual town hall meeting Thursday, when Farley succeeded outgoing president and CEO Jim Hackett. Ford also announced a management shakeup, including the replacement of Chief Financial Officer Tim Stone by company executive John Lawler.
"During the past three years, under Jim Hackett's leadership, we have made meaningful progress and opened the door to become a vibrant, profitably growing company," Farley said in a statement. "Now it's time to charge through that door."
Under Farley, Ford will work with "urgency" on turning around its automotive operations, he said, by improving quality, reducing costs, and accelerating the restructuring of underperforming businesses.
Farley says the automaker will grow by:
- Allocating more capital, resources and talent to its strongest businesses and vehicle franchises.
- Expanding its robust commercial vehicle business with a "suite" of software services "that drive loyalty and recurring revenue streams."
- Offering "compelling, uniquely Ford" electric vehicles "at scale around the world," including the Transit commercial van, the flagship F-Series truck franchise, Mustang, SUVs and the Lincoln brand.
- Adding more affordable vehicles to the global lineup, including in North America.
- And establishing new "customer-facing" businesses based on the self-driving vehicle platform of Argo AI, in which Ford has invested.
"We are going to compete like a challenger — allocate capital to higher growth and return opportunities to create value — and earn customers for life through great products and a rewarding ownership experience," Farley said.
Farley has telegraphed his belief in the potential of several of these areas for some time. He has repeatedly emphasized, for example, the growth opportunities he sees in commercial vehicles, and made staffing changes earlier this year aimed at making commercial vehicles their own business in North America.
"Jim's been signaling how to proceed for quite some time, and even under Hackett has been key to developing the strategic plan going forward," said Michelle Krebs, executive analyst for Autotrader. "So none of this should come as a surprise to anyone."
Ford is investing heavily in electric-vehicle development, committing to spend $11 billion on it through 2022. It is launching an electrified Mustang SUV later this year, and in the coming years will release electrified Transits and F-150s.
"I think the interesting one is adding more affordable vehicles to the global lineup, including North America, because that is a serious challenge to the industry," said Krebs. "There are not many affordable vehicles and in that part of the market, unfortunately buyers are particularly challenged to buy new vehicles and they're going to the used market."
Adding affordable vehicles to the lineup is important because it allows automakers to introduce their product lines to consumers early on in their car-buying lifetime, Krebs said.
New CFO Lawler, 54, most recently was CEO of Ford's autonomous vehicle division and vice president of mobility partnerships. The successor for his current position has yet to be named. Lawler previously worked in finance and general management over his 30-year career with Ford.
Stone is departing effective Oct. 15, to become chief operating officer and CFO of ASAPP, Inc., an artificial-intelligence software start-up.
Jeff Lemmer, Ford's chief information officer, will retire Jan. 1. His replacement, who will take on the added role of leading a technology and software platform, will be announced soon, the automaker said.
And, in a move the automaker says is aimed at "strengthen(ing) its commitment" to the Lincoln Motor Co. brand, it will break out into separate roles the jobs of leading Lincoln and serving as Ford's chief marketing officer. Those roles are currently filled by Joy Falotico, who will now focus on growing Lincoln and will report to Kumar Galhotra, president of the Americas and International Markets.
"This change will allow Joy to focus on accelerating Lincoln's global growth through great vehicles and services and a truly differentiated customer experience," said Galhotra. "Lincoln's completely refreshed lineup is resonating with customers in the U.S. as well as in China, where we are now producing the Lincoln Aviator and Corsair locally, for Chinese customers — and that's just the beginning."
A new chief marketing officer will be appointed soon.
"The interesting thing will be, Jim Farley is a marketer at heart," said Krebs. The chief marketing job "will be an important role, and an intense role, because that is a topic that's near and dear to Jim Farley."
Kieran Cahill, previously director of manufacturing and strategic projects for Ford of Europe, will step up as vice president of manufacturing in Europe, replacing Dale Wishnousky, who is retiring at year's end.
Additionally, the automaker is making changes to its operating model by:
- Focusing decision-making and accountability around product and customer groups in three regional business units: The Americas and International Markets; Europe; and China.
- Accelerating innovation, to lead the way on new businesses such as mobility and autonomous vehicles.
- Developing "world-class" connected vehicles by "harnessing expertise in industrial platforms."
- Using technology and software "in ways that set Ford apart" from its competition.
- And "embracing and increasing" diversity across the company.
This story will update.