James Hackett has been named as Fields’ replacement for the position of CEO. Hackett is the head of a unit that specializes in autonomous vehicles. Bill Ford Jr., Ford's chairman and a member of the board of directors, was unhappy with Ford's performance lately. Bill Ford Jr. is seeking reassurance and placed his bets on investment in ride services, electric vehicles, and self-driving cars. It's one of the primary reasons why Hackett is sitting on Ford's CEO chair.
According to Bill Ford Jr.'s statement, he and Mark Fields decided on the subject last week, which was after the annual shareholder meeting. Hackett got the CEO chair for several reasons. For one, he has experience as he was the former CEO of Steelcase.
Also, Hackett and Bill Ford Jr. have a close relationship. According to some sources, the two share an enthusiasm for a futuristic view of the automobile industry. It seems like Ford wants to hop onto the "future cars" bandwagon. Having said that, Ford Inc. reported that old executives hadn't been replaced and they are there to take care of Ford's "traditional automobile" industry.
Paul Moran, the top researcher from Northern Trust Capital Markets, stated that this is a radical move of Ford. He also stated that the move might have been started from an outsider, a coup from the outside. Perhaps, it's coming from a turnaround specialist.
Ever since Mark Fields took Ford's CEO seat, the company's stock prices have fallen almost 40%. A lot would say that Fields may have nothing to do with it as the decline was in conjunction with the U.S. economy's correction. However, the markets are making a comeback in these last few quarters and yet Ford's shares are not moving anywhere.
In fact, U.S. auto sales are now slipping, and the profit margins of Ford are trailing behind General Motors Co., a larger rival within the auto industry.
At present, Ford's market capitalization is floating around $43 billion, while GM's is at around $49 billion. Both these known automakers are trailing behind the Elon Musk's Tesla, which is now valued at $53 billion.
This tells you a lot of how investors are thinking in these modern times. Nowadays, investors are showing little confidence on old-line automakers and have started favoring future technology. You can say investors are interested in software rather than pistons and cylinders which are sold by the mile.
Paul Moran also added that the board of directors might have lost its patience regarding the lackluster performance of share prices. Moran continued by claiming that it's the essence of what is known as peak car hypothesis, which basically linked to long-term structural threats and a weakening cycle. Moran added that it's best to watch the auto industry as he predicts more disruption is going to happen in the near future.