Mark Fields, CEO of Ford Motor Company, has been pushed aside by the company and several of his top lieutenants are busy updating their resumés this morning. Joe Hinrichs, currently head of operations for the Americas; Raj Nair, the global technology and product development director; and Mark LaNeve, head of sales, service and marketing, are all subject to being fired or reassigned according to company sources.
Jim Hackett, who joined the Ford board last year is rumored to be Fields’ replacement. He was previously CEO of Steelcase and also served as interim director of the University of Michigan’s athletics program. Jim Farley, the head of Ford’s European operations, is rumored to be returning to the US to take on a more senior role.
Fields has shown he is out of touch with the changes happening in the car business by stating frequently that people just don’t want to buy electric cars. He thinks it is unfair for the government to force manufacturers to build products that are not in demand. That sort of defeatist thinking has no place in a world that is rapidly transitioning to renewable energy and turning its back on fossil fuels. It’s like wheelwrights and blacksmiths whining about the end of the Conestoga wagon era.
While Fields was busy trumpeting his company’s $4.5 billion investment in sustainable transportation technology, Hyundai quietly announce it planned to spend double that amount to bring more low- and zero-emissions products to market. Fields also allowed himself to get slapped around by Donald Trump over Ford’s production plans in Mexico, something every other carmaker is doing in the quest for profits.
Ford’s stock price has been sliding lately. It hit a one-year low last Friday, closing below $11 a share. The difference between Ford and Tesla is that the senior company is under constant pressure to please investors. “Look, we’re as frustrated as you are by the stock price,” said Bill Ford, Jr, great grandson of Henry Ford, a few weeks ago. “Most of our net worth is tied up in the company.” The ouster of Fields is a parable for our time. The auto industry is under assault. US sales are down. Demand for traditional sedans is eroding faster than anyone expected.
Ford and other traditional car companies are prisoners of reality. By contrast, Tesla is buoyed by the pot of gold at the end of the rainbow. Its investors are actually happy when Tesla loses money because they see those losses as a harbinger of sunny skies ahead. And that is the nub of the problem for all legacy carmakers. The demand for profits is like an albatross around their necks, weighing them down while Tesla sprints ahead. It’s as if Tesla has an unfair advantage — at least for now — because it is excused from the need to be profitable.
Fields has been criticized for not doing enough to revive the once proud Lincoln brand but that is an almost impossible task. For the past 40 years, Lincolns have just been badge-engineered copies of existing Ford models. The only difference between a Lincoln today and its Ford counterpart is the grille. Lincoln designers have been forced to slap a goofy-looking front on their cars that harks back to the 1940s. As if anyone today cares what a Lincoln looked like when FDR was in the White House.
Then Lincoln hired Matthew McConaughey to do a bunch of silly commercials that involve the actor driving through the ocean at low tide or sitting in the back seat. Ask yourself, when was the last time you drove your car through the surf or even sat in the back seat? And what does either have to do with owning a Lincoln?
Investors are also upset that GM has a plethora of SUVs and cute utes on the market with more coming while Ford continues along with only one large SUV and one midsize offering. And don’t even get them started on why Ford waited so long to jump back into the midsize pickup truck market in the US when it has been selling the Ranger overseas for years.
Things are changing fast in the world of transportation. Legacy automakers may not be able to sell sedans, but Tesla has nearly a half million reservations for its midsize sedan, the Model 3, which will begin production in July. Why can Tesla sell midsize sedans while others cannot? Mark Fields was unable to answer that question, but he is not the only industry executive looking over his shoulder as Tesla gains ground … and wondering, “Who are those guys?”
Source: NBC News