Ford is shaking up its management after a poor fourth-quarter financial performance and the botched launch of the Explorer SUV.
Sponsored: Tiny Bit Of This Strengthens Your Memory 81%
The Dearborn, Michigan-based company says that automotive President Joe Hinrichs will retire. Jim Farley, president of new business and strategy, will become chief operating officer in charge of global markets and automotive operations.
In addition, Product Development chief Hau Thai-Tang will take on an expanded role for products, services and customer experiences. He will stay in his product development post.
Ford’s full-year profit plunged by more than $3.6 billion last year, and it lost $1.7 billion in the fourth quarter. Quarterly revenue fell 5% to $39.7 billion.
CEO Jim Hackett said on a conference call with analysts this week that the company fell short of expectations for the year, and he blamed the drop primarily on the flubbed launch of the new Ford Explorer SUV at its factory in Chicago.
New Explorers came off the assembly line with multiple problems and had to be shipped to a Detroit-area factory for repairs, delaying deliveries to customers.
Hackett also referred to higher warranty costs during the year, especially for a flawed six-speed automatic transmission in the Ford Focus compact car.
Nighttime Trick [Sponsored]
Hinrichs was in charge of automotive during the Explorer launch and was a key executive when the Focus transmission was rolled out.
Shares of Ford edged down about 2% in morning trading.
The poor financial performance, which came as the company was in the middle of an $11 billion restructuring effort, increased the pressure on CEO Jim Hackett, who was replaced ousted CEO Mark Fields in May of 2017.
Hackett seemed apologetic after the Tuesday earnings release, but told analysts that change is taking hold.
Friday, Hackett said on a conference call with reporters that he plans to stay in his job and work with Farley to transform the company. He denied that the Explorer launch or the Focus transmission had anything to do with Hinrichs’ retirement.
Farley, 57, was hired by retired Ford CEO Alan Mulally in 2007 as global head of marketing and sales. He has led the Lincoln brand and operations in South America and Europe. Since April, he has been in charge of new business, technology and strategy as Ford tries to figure out how to capitalize on automation and electric vehicles.
In a statement, Ford said that Farley will lead a drive to make automotive operations stronger and deliver a global pretax profit margin of at least 8%.
Eat This For a Razor Sharp Memory [Sponsored]
Hinrichs has been with the company for 19 years. Hackett said in the statement that he was instrumental in Ford surviving the Great Recession without bankruptcy or taxpayer money. He also jump started Ford’s operations in China and ran North America.
The Associated Press contributed to this article