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Howes: Ford sales are good, but can CEO Jim Hackett help them catch up in mobility race?

Jun 8, 2017

The automakers who'll survive and thrive in the 21st Century are the ones making the biggest strides in mobility and connectivity – the keys to the self-driving vehicles of the future.

Detroit News business columnist Daniel Howes believes Ford has a lot of catching up to do, and there's a rough road ahead for new CEO Jim Hackett and his team.

Despite record sales by Ford last year, Howes said Ford’s leadership may have realized it’s lagging behind on the burgeoning technological front of connectivity and mobility. This Howes said, was likely a factor in the ousting of former CEO Mark Fields and the decision to bring in CEO Jim Hackett and reorganize senior leadership at Ford.

“I suspect what has motivated the board to move on CEO Mark Fields and replace him with Jim Hackett is that the board has seen this from the inside and they’ve seen this coming,” Howes said. “They have a fiduciary responsibility, and an obligation, to act.”

Wall Street analyst Adam Jonas outlines concerns about Ford’s future profitability in a recent report, where he suggests resetting Ford’s profitability outlook downward for the immediate future. Part of this, Howes said, is related to a slowing overall sales in the U.S.. But Howes said Ford could stand to gain by refreshing their model lineup, and investing more heavily in mobility and autonomy.

Even before Fields, Howes said former Ford CEO Alan Mullaly was “beloved” on Wall Street, and successful at rescuing Ford by working to improve earnings.

But, Howe’s said Mullaly’s leadership didn’t calculate for advent of connected cars and mobility technology.

“He probably wasn’t laying as much pipe, if you will, for the next generation revolution of connectivity, mobility, autonomy, as some of his peers were, particularly over at General Motors,” Howes said. 

That leaves new Ford CEO Jim Hackett with a challenging view of the changing industry. Howes said the change in organization leadership could lead to improvements at Ford in the future.

“It’s all in the execution,” Howes said. “If they don’t execute it, and they just moves chairs around on an org[anizational] chart, it really doesn’t mean anything. But if they do execute in a different kind of way with a different kind of leadership, then I think we might be having a different discussion.  But it’s not going to be one we’ll have in a couple months, it may be in 12, 18 or 24 months.”

Listen to the full conversation with Daniel Howes, Detroit News business columnist, above.

Daniel Howes is a columnist with the Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

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