Ford CEO Hacket Makes the Case He Should Be Fired

Cars and Drivers

Published: February 5, 2020 6:35 am

Ford Motor Co. (NYSE: F) released terrible results for 2019 that drove the stock down as much as 9%. Annual revenue dropped to $156 billion from $160 billion last year. Per-share earnings for the year were $0.01, compared to $0.93 a year earlier. Turnaround plans set by CEO Jim Hackett are in reverse, with no sign that will change.

Fourth-quarter numbers were worse. Revenue dropped 5% to $39.7 billion, and Ford posted a net loss of $1.7 billion for the period. The car company’s outlook was dismal.

Hackett commented on the results: “Financially, the company’s 2019 performance was short of our original expectations, mostly because our operational execution – which we usually do very well – wasn’t nearly good enough. We recognize, take accountability for and have made changes because of this.” It is questionable that Ford does well with its operational execution at all.

Hackett, who was appointed chief executive in May 2017, promised to restructure the company, save money and take Ford into a future of electric and autonomous driving cars. Investors have shown increasing skepticism. Ford stock is down 15% in the past two years. The S&P 500 is up 26% over the same period.

Ford’s major problems include extremely poor performance in China, the world’s largest car market, and only average results in its home market. Meanwhile, Ford has had no meaningful launch of self-driving or electric cars. The release of the Mustang Mach-E electric vehicle does not qualify. Its sales likely will be small.

Ford’s efforts to create a new future are vexed, and will continue to be, by advanced electric and self-driving vehicles launched both by large car companies and by tech firms, including Alphabet’s Waymo. Ford needs to be further along with its plans in these areas. Instead, it seems to have fallen behind.

Hackett says he recognizes Ford’s performance is well short of plans. That is not new news when his tenure as CEO is put into perspective, compared to his articulated plans. Hackett is not Ford’s future, if Ford’s board considers the recent past and short-term expectations.