Ford CEO Jim Hackett, who scrapped most of the company's U.S. cars to focus on SUVs and trucks, is stepping down Oct. 1 after a turnaround plan failed to satisfy investors.
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Shares rose as much as 3.29 percent on the announcement.
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Hackett will be replaced by chief operating officer Jim Farley, who oversees the automaker’s global operations and has been behind recent product revamps including the relaunch of the Ford Bronco.
Farley, who will draw a salary of $1.7 million a year as CEO and receive a stock grant worth $4 million, will work closely with Hackett over the next two months to ensure a smooth transition.
"I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future,” executive chairman Bill Ford said in a statement. "Jim Farley matches an innate feel for cars and customers with great instincts for the future and the new technologies that are changing our industry.”
Hackett, whose departure comes more than three years after being named CEO in May 2017, engineered Ford's push into the smart vehicle space and realigned the company's portfolio in 2018 to build just two cars in the U.S. -- the Focus Active crossover and the Mustang -- while putting more resources toward high-selling vehicles like the F150 truck and the Explorer and Escape SUVs.
He will stay on as a special adviser through March 2021.
Hackett joined Ford’s board of directors in 2013 and was named chairman of Ford Smart Mobility in March 2016, just over two years after retiring as CEO of office furniture manufacturer Steelcase.
In May 2019, Hackett announced a restructuring plan that eliminated 7,000 salaried jobs, or about 10 percent of the global workforce, and saved the company $600 million annually. But the initiative has done little to restore investor confidence, and the company's credit rating was downgraded to junk in September.
Shares have slumped 39.7 percent under Hackett's leadership, according to Dow Jones Market Data. They were down more than 28 percent this year, compared with the S&P 500's 1.98 percent gain.