Ford said on Tuesday (4 August) Jim Hackett, its president and CEO since 2017, plans to retire and will be replaced by Jim Farley, who will also join the board of directors, from 1 October.

Hackett, 65, and Farley, 58, will work together on transition over the next two months.

Under Hackett, Ford said, the automaker moved aggressively into the new era of smart vehicles and drove a deeper focus on customers’ wants and needs.

At the same time, he improved the fitness of the base business – restructuring operations, revamping the product line and reducing bureaucracy.

“I am very grateful to Hackett for all he has done to modernise Ford and prepare us to compete and win in the future,” said Bill Ford, executive chairman.

“Our new product vision – led by the Mustang Mach-E, new F-150 and Bronco family – is taking shape. We now have compelling plans for electric and autonomous vehicles, as well as full vehicle connectivity.

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“And we are becoming much more nimble, which was apparent when we quickly mobilised to make life-saving equipment at the outset of the pandemic.”

Farley, a manager with deep global experience and a successful track record, collaborated with Hackett over the past three years to develop and execute Ford’s Creating Tomorrow Together plan to transform the automaker into a higher growth, higher margin business.

“Farley matches an innate feel for cars and customers with great instincts for the future and the new technologies that are changing our industry,” Bill Ford said.

“His passion for great vehicles and his intense drive for results are well known, and I have also seen him develop into a transformational leader with the determination and foresight to help Ford thrive into the future.”

Farley joined Ford in 2007 as global head of marketing and sales and went on to head Lincoln, Ford South America, Ford of Europe and all Ford global markets in successive roles.

In April 2019, he was chosen to head the New Businesses, Technology & Strategy team, helping the company determine how to capitalise on powerful forces reshaping the industry – such as software platforms, connectivity, AI, automation and new forms of propulsion.

He was named chief operating officer last February.

Hackett, who will continue as a special advisor to Ford through March of 2021, said the time was right to pass the mantle of leadership to Farley.

“My goal when I took on the CEO role was to prepare Ford to win in the future,” Hackett said.

“The hardest thing for a proud, long lived company to do is change to meet the challenges of the world it’s entering rather than the world it has known.

“I’m very proud of how far we have come in creating a modern Ford and I am very optimistic about the future.

“I have worked side by side with Farley for the past three years and have the greatest confidence in him as a person and a leader,” Hackett added.

“He has been instrumental in crafting our new product portfolio and redesigning our businesses around the world. He is also a change agent with a deep understanding of how to lead Ford in this new era defined by smart vehicles in a smart world.”

Said Farley: “I love Ford and I am honoured by the opportunity to serve and create value for employees, customers, dealers, communities and all of our stakeholders. Hackett has laid the foundation for a really vibrant future and we have made tremendous progress in the past three years. I am so excited to work together with the whole Ford team to realise the full potential of this great company in a new era.”

According to Reuters, Bill Ford said the company had not considered outside candidates.

“I wouldn’t expect any big surprises,” Ford said in terms of additional management changes.

“Our board felt that we were on the right path,” he said, adding, “we did not do a deep dive externally.”

In an SEC filing cited by Reuters, Ford said Farley’s annualized base salary increased to $1,700,000 from $1,400,000, while Hackett’s remained unchanged at $1.8m. Farley will receive stock options valued at $4,000,000.

Hackett’s total compensation, including stock options, fell to $17.4m in 2019 from $17.8m in 2018. He will cease to have access to private aircraft for personal travel from 1 October. Ford will consider an equity grant for Hackett in March 2021 based on his performance and contributions as a company advisor in the first quarter of 2021, the news agency said.

Reuters noted Farley is credited, along with Hackett, with forcing a redesign before Ford’s introduction of the all-electric Mach-E crossover, and the decision to make it a Mustang vehicle, leveraging that iconic brand.

In a Tuesday conference call with media, Farley said Ford faces competition from a wide variety of companies.

“It’s Amazon, Baidu, Tesla, Apple, Toyota and others.”