Summary List Placement
Jim Farley thinks the Ford Motor Company’s best days are ahead of it. That may sound predictable, but when you’re dealing with a 117-year-old company founded by a man whose name is still on almost every building the carmaker owns and vehicle it produces, it smacks of ambition.
When Farley became its chief executive, late last year, after the bumpy three-year reign of Jim Hackett, he wasted no time in laying out his plan for the No. 2 US automaker’s ongoing revival. That starts by continuing to guide an $11 billion effort entering its final stages.
The next, marquee step is to unlock value in Ford’s wide range of businesses, which include everything from famed pickup-truck brands to new high-performance electric vehicles, commercial vans, luxury SUVs, financing operations, and big data.
Farley is Ford’s fourth CEO since the financial crisis, but anyone who thought he’d continue the upheaval by dismissing Hackett’s management team would have been mistaken. Instead, Farley has opted for continuity, with a refocusing of roles.
Of Farley’s top lieutenants, only one, chief marketing officer Suzy Deering, is a newcomer, having joined last fall. Other key members of the leadership team have spent decades at Ford. Kumar Galhotra, president of the Americas and international markets group, joined in 1988. Hau Thai-Tang, chief product platform and operations officer, came to the Blue Oval the same year. The president of Ford’s luxury Lincoln brand, Joy Falotico, entered the Ford family in 1989.
Their collective task is daunting. After an initially robust recovery following the financial crisis, the carmaker faltered under CEO Mark Fields and Hackett, his successor. Its stock price lagged behind the broader markets and Ford missed profit predictions. Confronted by the pandemic, the automaker saw its credit rating cut below investment grade and suspended its generous dividend.
Meanwhile, Tesla roared past Ford in market capitalization despite selling a comparatively paltry number of cars. To Ford and the Ford family, whose members continue to depend on the company’s stock and influence leadership, Tesla’s breakout didn’t make sense. The best-selling vehicles in the US since 1982 were the Ford F-Series pickup trucks. Ford had posted a nearly uninterrupted string of profitable quarters since 2010, and the company had over $30 billion in cash on its balance sheet. Every year, it sold over 5 million vehicles worldwide, while after two decades of ramping up, Tesla was selling just 500,000.
For Farley and his team, the mission is to unlock the immense value trapped in Ford and its legacy businesses while using the substantial profits from those efforts to fund a shift to electrification and services built around the enormous amount of data that vehicles generate.
If they can pull it off, the stock price might reverse a 10-year trend of being behind the markets — and even catch up with Tesla’s sky-high valuation.
We talked to the key members of Farley’s leadership team about how it’s all going to come together.
Farley’s fresh, grounded perspective
Farley has deep roots in the company: His grandfather …read more
Source:: Business Insider