Ford CEO Farley Must Be Fired

By Douglas A. McIntyre Published Feb 16, 9:30AM EST

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Ford CEO Farley Must Be Fired — © Spencer Platt / Getty Images News via Getty Images

It is the last straw. Ford Motor Co. (NYSE: F | F Price Prediction) announced it would stop production of its electric vehicle (EV) flagship, the F-150 Lightning. The launch has been viewed as the key to Ford’s future. Executive Chair Bill Ford said it is the most important product launch in his tenure at Ford. He even commented that Lightning was the most critical product introduction since the Model T about a century ago. CEO Jim Farley has bungled it. Bill Ford has to fire him to make clear such a critical event has been badly bungled. Ford then has to find a CEO who can execute at a level that will regain the confidence of consumers, investors and employees.

Ford had forecast that it would produce 200,000 Lightning units this year to satisfy demand. The Financial Times described the production interruption as one that could last for weeks. “By the end of next week, we expect to conclude our investigation and apply what we learn to the truck’s battery production process; this could take a few weeks,” a Ford spokesperson commented. (Click here for the 25 biggest product flops of the past 10 years.)

The catastrophe was not the first on Farley’s watch. In the third quarter of last year, Ford’s expenses were $1 billion higher than expected. Ford mispriced the Lightning and the Mustang Mach-E. The Mach-E is another critical model for the company’s EV future. Ford unexpectedly raised prices on both.

Farley has admitted that Ford has far too many engineers. It is a wonder he has not solved that problem. Farley’s biggest mistake was to say Ford’s quality problems would take years to fix. Ford is among the world’s largest and oldest manufacturers. The fact that the issue will not be resolved sooner is staggering.
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Ford’s fourth-quarter results and the poor forecast for this year proved that the company’s near-term future will be difficult.

Ford’s Lightning had several advantages as it entered the market. The gas-powered version of the F-150 has been the best-selling vehicle in America for four decades. There must be at least 6 million of them on the road today. The owners of these are a perfect target for the electric version of the pickup.
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Ford also came to market with its electric pickup ahead of Tesla, Chevy and Ram. These advantages cannot be overstated, mainly because of the huge sales of the Chevy Silverado and Ram. Ford’s lead is shrinking.

Bill Ford has shown a willingness to fire CEOs before. Mark Fields and James Hackett had short tenures. The last Ford CEO with a strong track record was Alan Mulally, who held the job from 2006 to 2014. Bill Ford’s judgment since then has been abysmal. Farley’s tenure has been humiliating for Ford’s executive board chair.
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Bill Ford has no choice. Farley must go.

Ford has been hit by one more humiliating event, which shows how badly the company has done recently and that this long line of incidents has not ended. Farley has become Ford’s number one liability.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.