Ford Picks Leader to Make New Inroads -- WSJ

Jim Hackett joined Ford Motor Co.'s board of directors in 2013 talking about "design thinking" and "fitness of use." The phrases were foreign to the dog-eat-dog car business.

Now, as the auto maker's new chief executive, Mr. Hackett faces high expectations to translate those phrases into meaningful change. He made his name turning Steelcase Inc. into an office-furniture juggernaut; now he needs to take on billionaire Tesla Inc., CEO Elon Musk.

Messrs. Hackett and Ford Chairman Bill Ford are longtime friends. In wooing Mr. Hackett to become a Ford director, Mr. Ford had hoped to "inject his tech-savvy energy into the board," according to an executive recruiter familiar with the process.

In 2016, Mr. Hackett was tapped to lead outgoing Chief Executive Mark Fields' new Smart Mobility innovation unit.

As he replaces Mr. Fields, Mr. Hackett, 62 years old, must transition from outsider to team player. Mr. Ford has emphasized the need for unity and clarity as Ford builds on its core auto-making business to forge ahead into new technologies and services, including the electric cars that Mr. Musk's Tesla makes.

Part of Mr. Hackett's role in his new job "will be to teach and groom the next generation" of leaders, Mr. Ford said on Monday. And he needs to foster innovation, a catch phrase Mr. Ford was fond of when he ran his great-grandfather's company.

Mr. Hackett is charged with better harnessing data and analytics to tap into car-buying trends and future needs of people walking into dealerships. Mr. Ford wants more research on parts made by 3-D printers and new modes of transportation, such as self-driving cars.

During his 30 years at Steelcase, an office-furniture maker based in Grand Rapids, Mich., Mr. Hackett pushed to modernize the workspace, dispensing of old-style cubicles and using technology to create open-office spaces better suited to today's work habits.

Taking over Steelcase as CEO in the mid-1990s when the firm was bleeding red ink, he led the company through a painful downsizing that resulted in thousands of job cuts. He is credited with transforming the product line, putting a greater emphasis on selling experiences and solutions, rather than individual chairs and desks.

Following his retirement from Steelcase, Mr. Hackett made waves in the Detroit area as interim athletic director for the University of Michigan. He recruited NFL coach and former star quarterback Jim Harbaugh to lead Michigan's vaunted football team, which at the time was struggling.

More recently at Ford, he oversaw the creation of the Smart Mobility unit. The subsidiary, formed last year, is responsible for experimenting with car-sharing programs, self-driving ventures and other services aimed at helping Ford better compete with Uber Technologies Inc., Alphabet Inc. and other tech firms trying to edge into the auto industry.

In Mr. Hackett, Mr. Ford saw a "serious and experienced executive" who was well known to the board, said one person close to the company. Instead of feeling like a threat to the next generation of potential leaders to the company, Mr. Hackett would work to cultivate them, this person said.

Mr. Hackett, however, lacks a high profile in Silicon Valley. And he doesn't have a background in the world of machine learning, artificial intelligence and other areas important to the future of self-driving cars.

Still, his involvement with Ideo, an influential design firm that Steelcase invested in during his tenure, indicates he can handle the learning curves.

"He is a collaborative kind of leader and that is a quality that wins in Silicon Valley, Dearborn and Delhi," said Reilly Patrick Brennan, a partner at Trucks Venture Capital, which invests in mobility startups.

In an interview last year with The Wall Street Journal, Mr. Hackett said he wasn't interested in being a chief executive again but was interested in helping Mr. Fields think through tough challenges.

Mr. Hackett explained that traditional car-building consumes substantial capital and returns relatively slim margins. In so-called mobility services, he said Ford could eventually earn far more attractive margins if it hired the right software engineers and designers.

The auto maker has been projecting 20% margins in the mobility services business, but hasn't outlined when that would be achieved. Ford's North American unit, currently its most profitable, returns about 10% operating margins under the best conditions.

Ford's Smart Mobility unit has made some initial moves under Mr. Hackett's direction, acquiring van-shuttle service Chariot and joining with a bike-sharing firm.

--Tim Higgins contributed to this article.

Write to Christina Rogers at christina.rogers@wsj.com and Joann S. Lublin at joann.lublin@wsj.com

(END) Dow Jones Newswires

May 23, 2017 02:47 ET (06:47 GMT)