In a move that shocked many, Ford Motor Co. has replaced CEO Mark Fields with James Hackett. Fields had served as CEO of the company for three years before he was relieved of his position at the end of May.
The firing of Fields stems from misgivings of the Ford Motor Co. board of directors and chairman. The company had not been performing well under Fields’ leadership. In fact, stocks have dropped by almost 40% over the course of Fields’ three year tenure as CEO.
The board and chair of Ford are hoping to see progress in several sectors under the leadership of the new CEO, specifically:
Self-driving cars
Electric vehicles
Ride services
Despite the falling stock prices, Ford managed to make an impressive profit under the guidance of Fields, reporting a $10.4 billion earning prior to taxes in 2016.
Challenges
Fields’ termination is not completely astounding in the current market environment. Many automakers, Ford among them, are worried about the buying climate of the automobile industry.
Ford’s challenges are mostly monetary in nature. After an exceptionally profitable 2016 for the company, 2017 is predicted to have lower profits.
Additionally, Ford’s competitors are putting significant pressure upon the company. Recently, Tesla was valued at $51 billion, which is $8 billion higher than Ford’s own value.
GM is also attempting to take Ford down a notch, as GM is attempting to take business away from Ford’s truck and sport utility outlets. The truck and sport utility outlets in North America comprises nearly 90% of Ford’s profits.
With these significant challenges that Ford is facing, it is not entirely surprising that the board and chair of the company outed Fields. With such stress placed upon the company, and an uncertain future ahead, the company decided that it needed a change in the highest level.
With the installation of Hackett as the new CEO, Ford looks forward tentatively into the future.