The stock of Ford Motor Co. (NYSE: F) has dropped below $10 a share, another milestone that marks the car company’s failure to set and institute plans for a turnaround.
The CEO of Ford is James Patrick Hackett. The real chief executive of Ford, however, is the family leader and executive chairman, William Clay Ford Jr. He has been on the company’s board since 1988. He has been board chair since January 1999 and executive chair since 2006. He is also chair of the board’s finance committee. While Hackett runs the company on paper, Bill Ford is Ford’s real leader.
Over the past three years, Bill Ford has made over $40 million, which is well above the compensation of any other executive during the period. (The sole exception is former CEO Mark Fields, who was pushed out in May 2017.) One of the most extraordinary parts of Ford’s job is that the company’s CEO, in this case Hackett, reports directly to him and not the board. Such a structure is rare among large U.S. public companies. However, the Fords have run Ford since it was founded, for better or worse.
During Bill Ford’s tenure as chair, the company has had five CEOs, a list that includes himself from 2001 to 2006. Alan Mullaly, who was Ford’s CEO from 2006 to 2014, is the only one that investors and car industry experts view as an unqualified success.
Bill Ford has a problem with Hackett, which means he has a problem with the turnaround over which he himself is presiding. Hackett is viewed as unqualified, indecisive and unable to articulate Ford’s plans for the next several years. Recently, the press has characterized him as “at sea.” With Ford’s U.S. sales position stagnant and deep sales problems in China, the world’s largest car market, the manufacturer has severe short-term problems. That, in turn, leaves Bill Ford faced with issues about how the company will become a winner in the future through success in the autonomous and electric vehicle sectors, which are considered the future of the entire industry. Additionally, Ford has said it will restructure costs. However, those plans have not been carefully defined.
Hackett has been grilled repeatedly on how Ford plans to take a lead in the autonomous and electric vehicle businesses, which are being chased by every major global manufacturer, niche companies (particularly Tesla) and tech behemoths such as Alphabet and Apple. These tech companies have nearly inexhaustible access to cash and the world’s leading engineers. Few are convinced Ford can play in this league. Hackett has not given these skeptics comfort.
Hackett is Bill Ford’s problem because Bill Ford is Hackett’s boss. As the company’s turnaround becomes no turnaround at all, Bill Ford has to show the outside world that he has another solution, even if it means he runs Ford himself, which he already does.