Ford announced Tuesday that Jim Hackett would resign as chief executive and be replaced by longtime auto executive Jim Farley as the car giant pushes further into digital and electric investment.
Hackett, 65, will hand over the job to Farley, 58, on October 1, but stay on as a special advisor through March 2021. Farley joined Ford in 2007 after a long tenure at Toyota and currently serves as chief operating officer.
Hackett joined Ford in 2017 from furniture company Steelcase and was known for his skills in turning around struggling organizations.
Ford Chairman Bill Ford said during a briefing with reporters that Hackett's mission at the outset of his appointment included preparing the company for a successor.
Hackett has overseen some major shifts at the 117-year-old Detroit auto staple, including phasing out most sedan models in the US market and launching the Mustang Mach-E, an all-electric sport utility vehicle built on one of the auto industry's most iconic brands.
Both moves drew scrutiny, with some analysts pointing out that ending sedan-building in the truck-centred US market alienated some customers, and some design mavens decrying the Mustang's makeover into a suburban-oriented mainstay.
The company's share price has fallen through most of Hackett's tenure amid questions over the company's long-term direction.
But Hackett pressed on, "taking on the tough issues and slaying the sacred cows," said Bill Ford, who also characterized Farley as a true car expert, noting he enjoys racing vintage cars as a hobby.
Farley, who invoked his grandfather's tenure at Ford in describing his tie to the auto giant, said during the briefing that there were no major strategic differences between him and Hackett and that he was "all in" on the outgoing CEO's emphasis on refashioning car design around digital capacities.
Hackett said during the press call that he had been mulling when to exit and decided the time was right after the company last week reported better-than-expected earnings just two weeks after launching its new Bronco SUV.
Bill Ford said the board had talked casually about looking at outside candidates, but that momentum built for Farley in recent months as he helped lead the response to the coronavirus, which involved shutting plants for several weeks and then reopening them.
"There is great strength in continuity, particularly if you feel you're on the right path," Ford said.
Analysts said the new CEO announcement made sense, but that Ford faces challenges ahead.
"Hackett was an unorthodox CEO pick to begin with, as an external candidate with no prior auto industry experience, and his tenure was marred by a deteriorating bottom line," said CFRA Research analyst Garrett Nelson.
"While Ford's new vehicle lineup has shown some promise with the Mustang Mach-E and Bronco, we think Farley will have his work cut out to 'right the ship,' as Ford remains in the middle of a multi-year restructuring and we don't see its vehicle sales returning to pre-Covid levels anytime soon."
Shares of Ford jumped 1.9 per cent to $6.82.