Ford Motor new CEO, Jim Farley, on Thursday promised the automaker would move with urgency, responding to investor and analyst criticism of the speed at which his former CEO Jim Hackett acted.
Farley, on his first day as Ford’s 11th CEO, also declared an executive shake-up that included naming a new CFO.
Ford’s promise to speed up its turnaround is not new at a time when it is executing an $11 billion restructuring.
Farley was named chief operating officer in February and promised a faster return to strong profits. He was formally tapped to succeed Jim Hackett in August.
“During the past three years, under Jim Hackett’s leadership, we have made meaningful progress and opened the door to becoming a vibrant, profitably growing company,” Farley said in a statement on Thursday. “Now it’s time to charge through that door.”
Hackett and Ford have been criticized by some on Wall Street for not moving fast enough on its restructuring. At the end of the second quarter, the automaker had incurred only $3.9 billion of the projected $11 billion in charges.
Farley will face immediate tests in his new position, including ensuring a smooth launch for the highly profitable, top-selling F-150 pickup truck to avoid the costly missteps Ford experienced when it renovated the Ford Explorer SUV.
Ford on Thursday reassured its goal for operating margins of 8%, something it identified as a 2020 target before the coronavirus crisis. It did not describe when it would achieve this target.
The automaker’s operating margin was 4.1% in 2019, before falling to a negative 4.8% in the first half of 2020 because of the coronavirus crisis.
Farley outlined his plans during a virtual town hall meeting with the automaker’s global team on Thursday, saying the automaker will allocate capital to its strongest franchises and high-growth opportunities, such as the F-Series pickup truck and its commercial business.
Ford has moved to cut costs worldwide, including earlier this month when it said it would target cutting 1,400 U.S. salaried jobs by year-end.
In 2019, Ford cut 7,000 salaried jobs worldwide and also targeting 12,000 additional layoffs and plant shutdowns in Europe. It also restructured operations in China and South America.
The automaker earlier said it expects a full-year loss because of the coronavirus crisis. It sees a pre-tax profit of between $500 million and $1.5 billion in the third quarter, and a loss in the fourth quarter as it introduces several new vehicles.
