FORD GOES LONG. AND WRONG. AGAIN.

By Peter M. DeLorenzo

Detroit. As I predicted a long time ago, Jim Farley will replace Jim Hackett as Ford’s CEO, effective October 1. This move was a fait accompli the moment Joe Hinrichs left the company in February. Thus, another transition begins for Ford, a company that has been on a roller-coaster ride since the day Alan Mulally left. 

Hackett was the little-known furniture company executive and FoB (Friend of Bill Ford) who was handed the reins of the company in the wake of Mark Fields’ departure. Fields had succeeded Mulally, but it all went wrong for him in due time, so Bill tapped Hackett to run his family’s company. Now, if Bill had his druthers, Mulally would be just now getting ready to retire; he wanted the ex-Boeing executive to remain CEO basically for life. And although this was a view that was shared by many, alas it wasn’t to be. So, Bill alighted on the notion that Hackett could be "The Guy." And for some fleeting moments, Jim showed flashes that he could be "The Guy" but only intermittently. Hackett’s esoteric pronouncements (I dubbed him “Professor Moon Beam”) and his vision of the future – defined by connected cities et al. – and Ford’s role in it were all deemed well and good, but meanwhile the machine that defines Ford wasn’t being served. Hackett, by all accounts a decent, smart and well-meaning guy, just didn’t have the depth and breadth of experience to make a real difference at Ford. And his role at Ford predictably amounted to yet another transition, one that lasted three years.

So, now what? The one thing Ford desperately needs more than anything else right now is a chief executive who understands this business inside and out and can guide Ford through perilous waters. And Bill Ford has decided that Jim Farley is "The Guy." Needless to say, longtime readers of this website know that I vehemently disagree with Ford’s decision.

Farley, the former Toyota wunderkind who was responsible for the launch of the Scion brand, has developed quite the notorious reputation at Ford as one who is unfettered by rational thought and unburdened by accountability, and who has a penchant for going completely off the rails. Known for his prodigiously short attention span and burdened by an excruciatingly painful interpersonal awkwardness, Farley’s belligerent, condescending style of dealing with underlings, along with his classic “parachute in, helicopter out” M.O. that has defined bad actor executives for decades in this business became his calling card. 

It gets worse. Farley has long considered himself to be “the smartest guy in the room” at Ford, much to everyone’s endless chagrin, because the reality is that he isn’t. It’s a carefully crafted facade that is hollow to its core. This was confirmed by the fact that Farley became known as "The Two Jims" because interactions with him became a meandering crapshoot, hinging upon whether people encountered the "good" Jim or the "bad" Jim on that particular day. Needless to say, when the "bad" Jim was unleashed, Farley left a trail of bad feelings and highly questionable decisions in his wake. 

Now that Bill Ford has decided that Jim Farley is “The Guy,” it’s no secret that seasoned executives are cowering under their desks because an emboldened Farley, unfettered and untethered, has all the makings of an unmitigated disaster. Am I picking on Farley? Hardly. I have only scratched the surface in describing this ego maniacal character, and now that he has been given the CEO reins, he could wreak havoc on the company’s future for years. 

Ford’s PR Chief – Mark Truby – who worked closely with Farley during his European stint, told me three years ago that he believed Farley would eventually be CEO. True to his word, Truby and his eager PR minions have been preparing for this day for going on eighteen months now, leaving no stone unturned in a scorched earth offensive to bury Farley’s “Two Jims” persona once and for all. This charm offensive – or should I say smarm offensive – has disgusted Ford insiders and left them in head-shaking disbelief.  

In fact, reading some of these PR-abetted stories that have showed up in the media, the uninformed might think that Farley walks on water, possesses the riveting intellect that occupies a space in the stratosphere beyond mere mortals, has never put a wheel wrong in his entire career, and is now logically anointed “The Guy” as Hackett prepares to wander off into the sunset. These pieces were designed to portray a wonderfully benign Farley, an executive whose rise has no perceptible limit, and whose enduring warmth is something that people crave to bask in. This "humanization" campaign of Farley is unmitigated bullshit, of course – and it has nothing to do with the "real" Jim Farley – the one hordes of people at Ford have grown to loathe with a level of disgust that is palpable. 

This announcement from Ford makes me fear for the very future of the company. In fact, as I’ve said previously, the company has embarked on a Highway to Hell. I think Ford has five years – tops – to make it. And I am not optimistic. At that juncture the family could very well be forced to make a deal to sell the company, or have their share significantly reduced in some sort of orchestrated takeover. That’s how dire I view this situation to be.

Yes, it’s about The Product in this business; it always has been and it always will be. And Ford definitely has some new products to talk about. “The Franchise” – the new F-150 truck – is an incredible cash machine second to none in this business and it should continue as such. And the upcoming Bronco due next spring should be – if Ford doesn’t screw up the launch – a slam dunk, grand slam, home run. (I don’t rate the all-electric Mustang Mach-E crossover nearly as highly because at this point it can only be described as a giant “We’ll See.”)   

But then again as successful as the new F-150 and Bronco should be, the cash burn going on in Dearborn is unfolding at a devastating cadence. How bad is it? At one point it was estimated that Ford was losing upwards of $161 million per day. And there is no amount of “fireside chats” with analysts – something that top Ford execs have tried of late in order to persuade them that the Dearborn automaker will be okay – that can mask that fact. No matter how many cool products the company has coming, when you’re burning through that kind of cash, time is the enemy, and Ford's third quarter performance should be telling. Right now, the sands of time are whistling through the hourglass at a furious rate for Ford. 

Three years ago, I had this to say about the future of Ford – projecting to the year 2030 – in a column entitled Runnin’ Down A Dream: “The VW Group long ago established itself as the largest automotive conglomerate in the world. The news? Its working agreement with the Ford Motor Company had evolved into a full takeover, as Ford’s restructuring was stalled by its perpetually late product cadence, ineffectual leadership and having pissed away billions trying to become a mobility company. And for the first time in its history Ford was no longer controlled by the Ford family, although the family still maintained a significant - but notably reduced - presence in terms of stock and influence.”

Today, I wouldn’t change anything about my prediction. Well, maybe one thing: I don’t think we’ll have to wait until 2030 to see the Ford Motor Company inexorably changed for good. The denouement will come – one way or the other – by 2025. 

In The Last Worthless Evening, Don Henley sings about “Time, time, ticking… ticking away” in a wistful lament, and his melancholy refrain somehow seems sadly appropriate right about now with everything that’s going on in the world. Time is still ticking away for the Ford Motor Company, whether anyone over in Dearborn wants to admit it, or not. 

As for Jim Farley being CEO? When everything is factored in, he is simply the wrong person, at the wrong time, at the wrong car company.

And that’s the High-Octane Truth for this week.