Howes: Ford waiting game raises investor expectations

Daniel Howes
The Detroit News
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It’s been nine months since Ford Motor Co. directors ousted their CEO in favor of Jim Hackett, the longtime Steelcase Inc. CEO who headed the Blue Oval’s Smart Mobility unit before his battlefield promotion last May.

Mark Fields’ tenure was cut abruptly short because he had no plan for navigating what’s often called Auto 2.0, and his successor is paying for it. The change promises the most dramatic, paradigm-shifting transformation of transportation since Henry Ford’s Model T rolled off the moving assembly line.

Today’s investors, analysts and the news media continue to wait for Hackett’s Ford to detail a strategy to leverage its profitable truck and SUV business into funding next-generation mobility, autonomy and electrification — unambiguous confirmation that Ford under Fields risked losing its way amid the most profitable years in its 115-year history.

They’re still waiting for Ford to radically reshape its car lineup to reflect the market’s fundamental shift away from traditional sedans and toward profit-rich pickups and SUVs; for evidence the Blue Oval can develop and assemble a credible electric car able to double as a platform for an autonomous vehicle; for more aggressive decision-making that signals a bias for growth over the status quo.

Ambiguity like that can’t withstand the quickening pace of a global auto industry turbo-charged by Silicon Valley capital, innovation and risk-taking. That’s a fact the Dearborn automaker’s top leaders understand, and they’re preparing to address it over the next two months in separate briefings likely tied to its near-term product plans, first-quarter earnings or both.

They can’t wait much longer. Investor expectations rise as patience ebbs, and the sideways performance of Ford shares suggests the smart money is waiting for more clear direction from the automaker before making a bet on a future it can’t yet discern.

The industry faces a historic inflection point. Ford risks reaching it later than its competitors, many of them already positioned to claim sizable shares of electric-powered self-driving vehicles providing ride-sharing services ... to name just one opportunity.

The whirring of a revolving door at the top — a familiar old Ford meme suppressed during superstar CEO Alan Mulally’s disciplined years — doesn’t help. Last week’s dismissal of North America chief Raj Nair for “inappropriate behavior” signals management’s resolve in the era of #metoo even as it, fairly or not, fuels impressions of turmoil in Ford’s executive ranks.

Damaging? Probably not. Unhelpful? No question about it. Ford’s ouster of Fields just before last year’s Memorial Day holiday triggered a chain reaction of management change that continued into last week with Nair’s departure and subsequent moves to fill the void.

That’s hardly a marker of stability worth emulating. Nor is it particularly complimentary given the contrast with General Motors Co. under CEO Mary Barra. Her cohesive management team is restructuring GM’s core auto business, delivering historically high profit margins, and punctuating its Auto 2.0 strategy with cold, hard results.

Its electric Chevrolet Bolt, a battery-powered platform for GM’s self-driving strategy, is rolling off the line at Orion Assembly in suburban Detroit. Its Cruise Automation unit is pushing ahead with fielding autonomous vehicles. Its Maven car-sharing brand is expanding to cities across the country and into Canada.

The comparison is not lost on Ford’s brass. They hear skepticism recalling what they heard a decade ago, when the global financial meltdown pushed GM and Chrysler Group LLC into bankruptcy and Ford to the edge. They know investor impatience is real, not concocted. They understand the late Mulally years and the Fields interregnum missed chances to reshape the company for a different kind of future.

The challenge is what happens next. And whether Hackett & Co. can use GM’s relative success and credibility to motivate the troops, to drive strategic change, to restore the Blue Oval’s luster with investors yearning for a sort of Mulally 2.0.

If Ford reaches the one-year anniversary of Fields’ departure without detailing “The Plan” to straddle the automotive present and the mobility future, pressure to make more changes at the top likely will intensify, understandably.

That’s because the clear implication will be that the new team doesn’t have a plan, either, the automotive definition of lost opportunity.

(313) 222-2106

Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him at 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.

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