By Mike Colias and Christina Rogers 

Ford Motor Co. on Friday elevated a longtime marketing executive to the No. 2 job, betting his experience fixing operations in Europe and guiding the company's future technology bets will help reverse a multiyear profit decline.

The auto giant promoted strategy chief Jim Farley to chief operating officer Friday, giving him broader responsibilities and positioning him to potentially succeed 64-year-old Chief Executive Officer Jim Hackett, a former office-furniture executive who has led the company for nearly three years.

Joe Hinrichs, a 19-year veteran and manufacturing guru at the company, will retire effective March 1, the company said. Mr. Hinrichs couldn't be reached for comment.

The moves come three days after the No. 2 U.S. auto maker by sales missed fourth-quarter earnings targets and issued disappointing profit guidance for 2020. Mr. Hackett is confronting a litany of challenges, ranging from rising warranty costs and blundered new-model launches to persistent losses overseas and falling profits in its home U.S. market.

The company's stock tumbled more than 9% the day following the earnings report Tuesday, which revealed the company's profit shrank to $47 million last year, from $3.68 billion in 2018. Ford's stock fell 1.7%, to $8.11, on Friday.

Even as Mr. Hackett has embarked on a multiyear restructuring of the business, Ford's finances continue to deteriorate and its profitability in recent quarters has slipped behind that of its two crosstown rivals General Motors Co. and Fiat Chrysler Automobiles NV.

Analysts have been frustrated with Mr. Hackett's inability to fully explain the weakening business or detail the progress made on his turnaround plan.

"There's going to be a lot of speculation as to how much more time does Jim Hackett have before the board loses patience," said David Whiston, an auto analyst with Morningstar Inc.

Mr. Hinrichs, 53, was named president of its automotive operations in April, putting him in charge of the company's vast car-manufacturing network globally.

At the time, it also made the 57-year-old Mr. Farley head of new businesses, strategy and technology, giving him responsibility for charting Ford's course as technological advances like electric and driverless cars disrupt the auto business.

Mr. Farley has been overseeing Ford's electric- and autonomous-car efforts, connected-car strategy and other long-term bets. In his new role, he will take over much of Mr. Hinrich's duties, including running Ford's vast product-development and purchasing arms.

Mr. Hinrichs's pending departure leaves the company without one of its most-seasoned manufacturing executives ahead of a critical vehicle-rollout year for Ford.

The company is gearing up to introduce late this year a revamped F-150 pickup truck, the first redesign of its most profitable model in about six years. The company also plans to roll out a return of its Bronco SUV, a model that Mr. Hinrichs heavily lobbied for internally for years.

On Ford's earnings call Tuesday, Mr. Hackett stressed the company needed to improve execution, after a botched launch of a new Ford Explorer last year caused profits to tumble in the fourth quarter.

"It does boil down to, we can't miss a beat now in the product launches, " Mr. Hackett said.

Mr. Hinrichs, an Ohio native, joined Ford nearly two decades ago and ascended through various manufacturing jobs and ran the company's Asia region during a time of explosive growth in China's car market.

As head of North America, he tackled complex manufacturing challenges, including moving the profitable and high-volume F-150 from a steel to aluminum body.

Mr. Hinrichs is well-liked and widely admired inside the company and has strong relations with auto-parts suppliers and labor officials, employees and colleagues have said.

Mr. Hackett said Mr. Farley's appointment is aimed at achieving 8% operating margins globally, roughly double Ford's margin in recent quarters.

"Jim Farley is the right person to take on this important new role," Mr. Hackett said. "Jim's passion for great vehicles and his intense drive for results are well known. He also has developed into a transformational leader with the imagination and foresight to help lead Ford into the future."

Asked about how long he plans to remain CEO, Mr. Hackett said he doesn't intend to leave soon. "I plan on staying in this job and working with Jim tightly," he told reporters Friday.

Mr. Farley joined Ford as a rising star, coming to the U.S. auto maker from rival Toyota Motor Co., where he pushed the Japanese car maker to remake its image and broaden appeal to younger buyers.

He was a key member of former CEO Alan Mulally's restructuring team and rolled out the company's "Drive One" advertising campaign that endured for years after Ford repeatedly changed slogans and approaches.

More recently, he led Ford's troubled European operations through restructuring that had for a period restored them to profitability.

When Mr. Hackett stepped into the top job in May 2017, Messrs. Farley and Hinrichs were given broad roles leading the company, effectively setting up a succession race for the next CEO.

At the time, Ford Chairman Bill Ford said part of Mr. Hackett's job would be grooming the next generation of leaders.

In addition to Mr. Farley, the company said it would also expand the responsibilities of product chief Hau Thai-Tang, adding customer services and experience to his role.

Write to Mike Colias at Mike.Colias@wsj.com and Christina Rogers at christina.rogers@wsj.com

 

(END) Dow Jones Newswires

February 07, 2020 17:16 ET (22:16 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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