As new CEO focuses on strategy, two top lieutenants will steer day-to-day decisions
The top agenda item for Ford Motor Co. Chief Executive Jim Hackett is carving out a clear strategy for the 114-year-old auto maker's role in an evolving car business. For just about everything else, he can rely on Joe and Jim.
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Ford's executive shuffle, announced Monday, led to broader roles for current Americas Chief Joe Hinrichs and current Europe Chief Jim Farley. They'll leave specific regional duties with Mr. Farley taking charge of "global markets," and Mr. Hinrichs running "global operations."
The moves hand considerable sway over day-to-day decisions to the pair of executives. As Mr. Hackett replaces Mark Fields at the helm and looks to accelerate innovation and energize the workforce, analysts say his top lieutenants are being positioned as candidates to eventually succeed him for the top job.
In a note to investors, Barclays analyst Brian Johnson said the new job descriptions signals both are "vying to take over as CEO after Hackett's work is complete." He said "both have big challenges and perhaps the board's thinking is this will move them to cut deeper, act faster."
A Ford spokesman said the company doesn't comment on succession planning.
Ford last week announced it will cut white-collar head count by 10%, or 1,400 people, in North America and Asia, following similar actions in Europe and South America. In an interview Chairman Bill Ford said more "hard actions" need to be taken to address underperforming parts of the business, but declined to elaborate on trouble spots.
Mr. Farley, 54, is an ex- Toyota Motor Corp. executive with a sharp tongue and bulletproof resume. He was recognized by the board as a top performer in 2016 after posting a $1.2 billion profit in Europe, a sharp increase improvement compared with 2015.
Mr. Farley -- recruited by Mr. Ford and then-CEO Alan Mulally -- stanched red ink and increased margins to 4.2% in Europe, market long burdened by overcapacity and pricing wars. He aimed to further slim down Ford's European operations, targeting long-term operating margins of 6% to 8% even as crosstown rival General Motors withdrew from the market, selling off its Opel AG business.
Last year, Mr. Farley oversaw an effort to eliminate hundreds of salaried jobs in Europe through buyout offers -- saving $200 million annually. He shifted focus to higher-profit cars and sport utilities to better compete in the region.
Mr. Farley joined Ford as a rising star, coming to the U.S. auto maker after serving as the face of Toyota's aggressive efforts to remake its image and better appeal to youth. Mr. Farley was a key member of Mr. Mulally's restructuring team and rolled out the company's "Drive One" advertising campaign that has endured for years after Ford repeatedly changed slogans and approaches.
Mr. Hinrichs, 50, made his name on the manufacturing side, and spent the last four and half years running North America, a region that drives nearly 90% of the company's profits. He was a candidate to succeed former Ford Chief Executive Alan Mulally before the job went to Mr. Fields in 2014.
An Ohio native, Mr. Hinrichs has remained a source of stability for Ford in its most vital region amid a recent flood of new managers and the initiation of new business ventures, including the Smart Mobility innovation unit that Mr. Hackett headed before becoming CEO. Ford is also working on electric cars and autonomous vehicles at a time when profits come from U.S. dealers.
Mr. Hinrichs is a blunt leader. In 2010, with Ford on the rebound after the financial crisis, he chastised a room full of top executives for underinvesting in fast-growing Asian markets, which he was running at the time.
He has tackled complex manufacturing challenges, including moving the profitable and high-volume F-150 from a steel body to aluminum. Well-liked by the workforce, he negotiated crucial cost-saving labor deals that helped keep Ford out of bankruptcy and competitive with foreign rivals.
Ford's North American operations have churned out some of the company's biggest profits in history under Mr. Hinrichs' watch. Bolstered by increased demand for pricey trucks and SUVs, Ford's operating margins in the region have topped 10%, rivaling financial results posted by luxury auto makers.
Having previously spent time at General Motors Co. and in private equity, Mr. Hinrichs joined Ford as a plant manager in Sterling Heights, Mich., in 2000 and quickly rose through the company's manufacturing ranks. Within six years, he was named vice president of North American manufacturing and later ran Ford's Asia region, overseeing a massive industrial expansion in China.
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(END) Dow Jones Newswires
May 25, 2017 02:47 ET (06:47 GMT)