With the overwhelming number of truck and sport-utility debuts and news coming out of the North American International Auto Show this year, it’s not surprising that Ford CEO Jim Hackett appears ready to make an even bigger commitment to that segment.
Hackett told analysts last night the company acknowledged the shift in preferences by U.S. consumers, however, he wasn’t ready to put a final nail in the coffin of passenger cars at Ford.
That said, he may be grabbing a hammer as he announced the company will be increasing the number of trucks and SUVs in the Ford line-up by 10% while cutting the passenger car portfolio by the same amount.
With the rumors of the Ford Fusion being on the chopping block in recent weeks, this move is only going to raise the specter of the Fusion’s death once again. However, Hackett was quick to point out that some passenger cars were safe from any kind of demise.
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“The best-selling sports car in Europe was the Mustang,” he noted.
However, he is expecting that 2018 will be a tough year for the Dearborn, Michigan-based automaker, describing it as “a flat year.”
For 2018, the company’s guidance reveals adjusted earnings in the range of $1.45 to $1.70. This guidance reflects higher commodity costs and further adverse exchange, offset in varying degrees by actions the company is taking to mitigate their effect.
When all the numbers are in for 2017, Ford announced preliminary results of $1.95 EPS, an increase of 80 cents from a year ago, and adjusted EPS of $1.78, an increase of 2 cents from a year ago and in line with the company’s most recent guidance.
Hackett said he expected bigger things after this year and while the company will shift its production mix toward trucks, his goal at Ford is to marry the company’s long-standing passion for cars with the strategic vision that he outlined during an address at the Consumer Electronics Show.
In Las Vegas, he emphasized the important role that “smart” cities will play in the future. “That’s coming and there is no going back,” he said.
At the same time he wants to make sure that the spirit surrounding vehicles like the Bullitt Mustang unveiled this week at the North American International Auto Show is never lost on his watch at Ford. “I’m not even a car guy and I had tears in my eyes,” Hackett said.
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Hackett, a former University of Michigan lineman, who came to Ford after a 20-year stint as the CEO of Steelcase, the renowned furniture company based in Grand Rapids, Michigan, and an 18-month stint as U-M’s Athletic Director, emphasized that he loves his new job.
Hackett was asked to take over from Mark Fields last May after Ford’s stock price had dropped and critics began to suggest the company lacked focus and direction.
“I have to compete with Apple who is working on something in warehouse. Look at Amazon. they’re going after medicine and car parts,” added Hackett, who says he wants to make sure that Ford is fit enough to compete against all comers.
“I‘m not the CEO who says do more with less. Ford’s already pretty good at hammering suppliers. Rather design the process to gain an advantage,” said Hackett, who noted for year, it has taken Ford exactly 81 days to complete the process of ordering all the parts of vehicle, building and delivering it to customer.
If Ford than can change that, it will undoubtedly succeed.
“I can see other systems that move faster. Cycles of competition go faster. I had 20 years to get Steelcase right I don’t have that time here,” he said.
Hackett also said he would not have sold Jaguar Land Rover and Volvo like Alan Mulally did after taking over in as CEO in 2006. But hindsight is always perfect, he noted. and Ford is extremely proud of not taking any government assistance during the 2008–09 recession.
“I have zero concern about the executive bench,” Hackett said. “We have people who could be sitting in this chair. We have some great people. There are three or four people that are viable candidates and probably five more in company this size that we can’t see,” added Hackett, who has reduced the number of people reporting directly to him from 19 to eight.
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“We are moving quickly,” he said. “Ford has to aim ahead. I had 20 years to get Steelcase right. I don’t have that time here.”