Ford shakes up management after giving a dreadful outlook
Posted February 7, 2020 10:04 a.m. EST
CNN — Ford announced Friday it is is replacing its president of its auto unit, three days after it announced disappointing results and an earnings outlook, sinking its stock.
The company has replaced Joe Hinrichs, who has been at Ford for 19 years and who previously worked at General Motors. Jim Farley will assume the role of chief operating officer of the company, reporting to CEO Jim Hackett. He previously served as president of new businesses, technology and strategy, overseeing the company's effort to shift to producing electric and self-driving vehicles.
"Jim Farley is the right person to take on this important new role," Hackett said. He said it's important that Ford accelerate its shift to electric and autonomous driving vehicles.
The company termed Hinrichs' departure as a retirement, but he is only 53 years old.
"I thank Joe for his tremendous leadership over the past two decades," Hackett said. "Joe was instrumental to Ford's ability to survive the Great Recession a decade ago without bankruptcy or taxpayer bailout."
But the company was stung when it reported a bigger-than-expected loss in the fourth quarter which essentially wiped out the company's profit for the year. It also said that its earnings before interest and taxes in the first quarter of this year would be $1.1 billion less than the $2.4 billion it earned a year ago.
Hackett admitted that the company's results were short of what Ford had promised.
"Our operational execution -- which we usually do very well -- wasn't nearly good enough," he said. "We recognize, take accountability for and have made changes because of this."
The company is in the midst of an $11 billion restructuring plan that will take several years. But that plan has raised concerns among investors and some analysts. In September Moody's downgraded Ford's credit rating to junk bond status.
Shares of Ford fell 9.5% on Wednesday following Tuesday's after-the-bell report. It lost another 1% on Thursday, and were down another 2.6% in early trading Friday on news of the executive shake-up.