Hefty profits didn't save Fields' job

Big trucks have helped Ford to big profits in recent years.

Under Mark Fields, Ford Motor Co. earned $10.8 billion in pretax profits in 2015. It earned $10.4 billion in 2016. And it projects $9 billion pretax this year.

That's north of $30 billion in three years. And it's not good enough anymore.

Consider that the takeaway from an entirely atypical Detroit 3 CEO transition, with Fields out as top executive and Jim Hackett, former CEO of office furniture maker Steelcase, in.

If you look at it from the perspective of financial numbers, the move is hard to fathom. But in today's rapidly mutating business environment, things are different.

The basic products that automakers sell, the way customers use them, the way they're built and sold, and the field of competitors all appear headed for fundamental change. That's why winning at the existing business model didn't convince Wall Street -- and apparently the Ford board -- that the company is heading in the right direction.

At today's press conference, Executive Chairman Bill Ford stressed the need for a less hierarchical, faster moving culture. He touted Hackett as a transformational leader. Though Hackett is former CEO of an old-line Midwestern corporation, he has been a change agent, Bill Ford said. Perhaps crucially, he said that in a Silicon Valley visit, he saw Hackett -- who headed Ford's mobility unit -- warmly welcomed by the tech elite.

How much all this will move Wall Street is debatable. Ford and GM stock may continue to be a hard sell until the companies show traction in their new mobility businesses -- significant revenues, if not immediate profits.

But that's Hackett's challenge now, after 11-figure operating profits proved inadequate to keep Fields in the saddle.

A footnote: If you find it hard to see how Bill Ford could have pulled the trigger to remove Fields, remember that Bill Ford essentially fired himself as CEO to install Alan Mulally. Once you've done that, you're probably not going to be overly sentimental about taking out someone else.

You can reach Dave Guilford at dguilford@crain.com

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