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CEO Jim Hackett pushing Ford team as investors watch with caution

Phoebe Wall Howard, Detroit Free Press on

Published in Automotive News

-- Reorganizing the company at the top.

-- Creating a "Team Edison" that guides electric and driverless initiatives and finding the money to pay for those initiatives

-- Transforming an electric vehicle plan that "wasn't where it needed to be."

-- Partnering with autonomous vehicle companies, increasing efficiency and cutting costs.

They say he is changing overall culture. He launched an internal series called Curious Minds, where speakers have included British management expert Margaret Heffernan, A&E network chief marketing officer Amanda Hill and screenwriter Josh Davis.

The 62-year-old who spent 30 years in the furniture business let go 12,000 employees during restructuring at Grand Rapids-based Steelcase and earned respect for his ability to transform business.

'I thought he was crazy'

"When I first started covering Jim Hackett, I thought he was crazy," said Rob Kirkbride, editor of Bellow Press, a magazine publisher that covers the international office furniture industry.

"He was talking about things like co-working, shared desks and people not going to work in offices anymore. And how people would collaborate. Everybody in the industry said, 'Who is this guy? And why is he talking about these odd things?' As time went on, the world changed. And Jim Hackett was right on about 95 percent of what he talked about."

Kirkbride, a former newspaper and magazine reporter, ended up writing a mea culpa column after the CEO left his Steelcase post in Grand Rapids.

"He was talking about things like TED conferences before anybody knew what that meant," Kirkbride recalled. "He's thinking so far ahead of where other people are, that might be a source of confusion for people. It was confusing for me."

Hackett studied the market and went out and did research and figured out what people needed instead of just making products people thought they needed.

"He really was a Steve Jobs-like character, pushing people ahead to places they didn't know they needed to be," Kirkbride said. "He's got a grasp of the future that very few people I've ever met have. He's got a great mind."

While Hackett's TED-talk style may be well received by the tech industry, auto industry observers say he can't just hover in the clouds above the nuts-and-bolts of the core business.

In the wake of Ford's year-end financial results, some of which were previewed in mid-January, investors may be turning up the heat on Hackett's strategy to navigate the shoals of a declining U.S. auto market and the rapidly changing world of autonomous vehicles.

As the auto and technology worlds converge, no one knows how long it will take the mobility on-demand model to reach critical mass, let alone profitability.

Illusion of growth versus steel

Ford is expected to keep churning out robust earnings and invest in all this technology-in-progress, knowing the new frontier will lose considerable money in the near-term.

Yet in Silicon Valley, just the illusion of growth translates to value. When you make complex vehicles, and spend billions each year on robots, conveyors, employees, steel, aluminum and thousands of parts, only profits count.

Unlike Mulally, who helped negotiate the $24 billion private loan that proved to be Ford's lifeline through the Great Recession, Hackett is charged with pushing toward a radically changed future, but maintaining the core business too.

Hackett portrays images of a future that's not quite here, but may be closer than most people think.

"The clarity of what the future is, is undeniable to me," Hackett said this month before an Automotive News World Congress of about 800 attendees.

But it's not completely clear to consumers, transportation planners, even very talented Ford employees.

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"I have to create followership in addition to figuring out where we're going," Hackett said. "I'm humbled by how difficult that is."

Whether it's fair or not, since leaving Steelcase, which he guided from 1994 through 2014, Hackett has developed a reputation as a troubleshooter who gets results quickly.

First he was interim athletic director at the University of Michigan, where he once played for Bo Schembechler. His most memorable accomplishment there was luring Jim Harbaugh to succeed Brady Hoke as head football coach.

Then Hackett led Ford's Smart Mobility venture for about a year before his friend, Executive Chairman Bill Ford Jr., elevated him to CEO.

But preparing Ford Motor for the uncertainty ahead -- autonomous cars, alternatives to personal ownership, delivery fleets -- is a little more daunting than saving a major college sports program.

Balancing the present and future is especially difficult.

For example, last week as Hackett prepared for another of his futuristic talks at the Automotive News conference, CFO Shanks and Jim Farley, president of global markets, were delivering bad news about fourth-quarter earnings and a softer outlook for 2018.

The prescription: Slash marketing costs, reduce the number of model variations, perhaps get rid of slow-selling products, especially passenger cars.

America's continuing pickup truck binge has paid for the R&D with self-driving, ride-sharing, as well as acquisitions related to them.

Dealing with big unknown market shifts isn't new to Hackett. He led Steelcase designers and marketers to see how workplaces would transform. He tapped sociologists and anthropologists to explain how people work.

Seeing the future

His longtime friends include a variety of creative thinkers. One of the most notable is David Kelley, co-founder of IDEO, a global design company that once included Steelcase among its majority stakeholders. Kelley also started what became the Hasso Plattner Institute of Design at Stanford University.

Influentials in Silicon Valley and along the West Coast keep tabs on Hackett.

Jeff Weiner, CEO of LinkedIn, tweeted a Forbes.com article about Hackett's January 2018 speech in Las Vegas headlined, "Ford CEO says car industry has restricted some freedoms." Weiner wrote on the post, "Given number of CEOs he's interviewed, when Adam Lashinsky says this was one of the most compelling CEO keynotes he's seen in years, it's worth paying attention to."

If Silicon Valley is charmed, Wall Street is watching Hackett closely.

"This business needs to, and should be, performing at a higher level. We are not satisfied with our performance at all," Shanks said. "Jim Hackett is the one that triggered the whole initiative to improve our fitness, making this business perform at a level that is far better than what it is now."

He predicted billion dollar net benefits.

"We're not just going to improve a bit," Shanks said," We'll reshape this business."

(c)2018 Detroit Free Press

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