Last week, Mark Fields, CEO of Ford, was driven out of the company. Although the automaker was profitable during Field’s tenure, the company’s stock slipped 40 percent – a loss of $25 billion. Seems that solid SUV sales just aren’t enough for job security anymore.
The move comes as Silicon Valley upstarts and giants are starting to challenge Detroit’s automotive dominance. Companies like ZipCar are changing the rules of car ownership. Uber and Lyft have reinvented the car as a service, rather than a product. And nearly everyone – from Google to Apple to Uber – is racing towards an autonomous future.
But while some traditional car companies answered the challenge with their own initiatives, Ford driverless car projects lagged behind. They lacked a solid plan to reassert their relevance in the changing world of driving.
Ford’s new CEO is Jim Hackett, who previously was head of Ford SmartMobility. That’s the forward-thinking arm of Ford designed to take them from selling sheet metal to next-generation mobility technologies. Under Hackett, Ford Mobility invested in Zoomcar, an India-based car rental company similar to Zipcar. It also acquired Chariot, a van shuttle service that operates in San Francisco.
Bill Ford Jr. calls Hackett a “visionary” who knows how to remake a business. Hackett was formerly the CEO of Steelcase, an office furniture manufacturer. During his tenure, Hackett moved Steelcase away from cubicles and towards open-space work environments. That paid off, as companies embraced collaborative office areas that fostered teamwork.
Later, Hackett served as the interim athletic director at the University of Michigan, his alma mater. There he brought in football coach Jim Harbaugh, who helped the team capture two winning seasons – and increase ticket sales.
Staging A Comeback
Ford is hoping that Hackett can initiate a similar turnaround, not just as a transformational thinker, but also as an operational leader. His promotion clearly conveys that new modes of transportation, especially Ford driverless cars, will be a focus at the company moving forward.
It comes just in time, too. Last month, Tesla’s market valuation of $51 billion surpassed both GM and Ford for the first time. And yet, the electric car company sells less cars in one year than Ford sells in just a month.
One of the key changes Hackett will tackle first is the hierarchical culture at the company. In a news conference, Bill Ford said it’s important for teams to have the power to move fast and make decisions that will allow the company to seize on ideas and opportunities.
Those ideas could include moving towards an Uber-like ride-hailing service. Or developing a cohesive plan to put a Ford driverless car on the road by 2021, the goal set by his predecessor. Or making data generated by driverless cars a new revenue stream.
Of course, we at Dryve are always rooting for the big guys to make big bets on self-driving technology. Looks like they’re doubling down on the Ford driverless car.
No matter what Hackett tackles, though, no doubt investors will be watching to see if the automaker can pull off the ultimate challenge: Getting ahead in the race towards the future, while still remaining competitive in today’s market.
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Article Submitted: 6/5/17