Ford
Ford CEO Jim Hackett at CES.
- Ford CEO Jim Hackett is redesigning the company to be a mobility provider to cities.
- At the same time, Ford's business is still closely tied to traditional vehicle sales.
- His task is the most daunting since GM's Alfred Sloan created the modern corporation in the 20th century.
Last May, when then-CEO Mark Fields was ousted amid a lagging stock performance and former Steelcase chief Jim Hackett took over, the writing has been on the wall for Ford.
Job One is to change the perception that Ford is falling behind on the market-moving stories about the future of the car business: electric vehicles and self-driving cars.
It doesn't matter to investors in the stodgy auto sector that EVs make up only about 1% of global sales and nobody has anything even vaguely resembling a fully autonomous car in commercial application. If Tesla can lose money hand over fist for 14 years but capture the imagination with $100,000 electric cars and its Autopilot self-driving tech, in the process passing profitable Ford's market cap, then Ford has to start talking the talk.
At an investor conference last year and now at CES in Las Vegas, Hackett has tried to do that. Both times he's demonstrated the difficulty of his task. Ford makes its money on big pickup trucks and crossover SUVs. But guided by Chairman Bill Ford, who for years has been pushing Ford in a more futuristic, fewer-cars-in-the-world direction, the company under Hackett is now restyling itself as a sort of mobility consultant for the cities of the future.
What would Alfred Sloan do?
Screenshot via Amazon
It's a difficult, theoretical pitch. But in its outlines, it reminds me of the last major corporate redesign that wasn't brought about by bankruptcy or a government bailout: the managerial innovations of General Motors' mid-20th-century president, Alfred Sloan.
Sloan took GM, which in the 1930s was a unwieldy mix of brands and manufacturing facilities, and transformed it into the model of the modern, managed corporation. His efforts enabled GM's domination of the US auto market for decades.
Hackett has something similar in from of him. Even under Fields, Ford recognized that data and services could yield fatter margins than the mass-market auto industry's 10%. In fact, before Fields became CEO, his predecessor Alan Mulally pioneered the car business' interest in CES as a new-ideas showcase.
Now Hackett has taken up that baton and clearly sees a more urban world as the market that Ford could dominate, just as GM took control of an emerging postwar consumer society in an America that was de-urbanizing.
"The challenge is enormous," Hackett wrote in a Medium post before his CES keynote address.
"We are talking about orchestrating the entire
It's unclear if Ford will get this right, of course - or if Hackett will be around long enough to see it through. The US auto industry has enjoyed booming sales for three straight years and a robust recovery from the financial crisis. But the good times can't last forever, and eventually Ford, like everybody else, will have to manage a downturn.
Get the latest Ford stock price here.