Maybe it was always an impossible task. I am talking about how now deposed Ford (F) CEO Mark Fields was expected to cut costs, grow sales and develop driverless cars while at all times being held hostage to the peaking U.S. auto market. Oh, and it sure didn't help that he followed in the footsteps of Alan Mulally, the man who kept Ford out of bankruptcy, the only major U.S. automaker that didn't succumb to reorganization during the Great Recession.
Fields, who took over the reins of the storied Ford Motor Co. July 1, 2014, was fired today, less than three years after taking the job, replaced by Jim Hackett, who oversaw the autonomous vehicle division from March of last year and had been a member of the board of directors since 2013.
While it is true that the stock had fallen from $16 to $11 during Fields' tenure, I could argue that it should never have been that high given that it's not like Fields came in and started destroying shareholder value. The hand he was given by Mulally was good, but also quite dependent on the U.S. market. More than 64% came from a market that we all acknowledge had plateaued.
Plus, Mulally hadn't spent on driverless cars like some of his competitors. Fields had to catch up quickly without breaking the bank. Any commitment to do so required at least several billion dollars to get right and Fields wasn't in a position to spend that all at once while maintaining the dividend and dealing with a declining U.S. market. Still, Fields' first quarter of this year was, indeed, a weak one, down 30%. Plus, he made it clear to me that it would be a down year, something I knew would cause him headaches, and sure enough, shareholders were calling for his head just 11 days ago.
Several things counted against Fields. First, the company lagged badly in the large, fast-growing Chinese market. That's no fault of Fields'; he was furiously trying to catch up from day one. Second, without the U.S. doing well, Ford simply couldn't beat the conventional competition, which skews more international, so his stock did fall behind Fiat Chrysler (FCAU) and General Motors (GM) . Third, the stock of Tesla (TSLA) just took off, passing Ford in value as it went from about $230 to $308 during his tenure, giving it a market cap of about $50 billion versus Ford's $43 billion, an embarrassment that's more the fault of the stock market's infatuation with Elon Musk's vision than anything Ford could have done.
Finally, Fields ran into the buzzsaw that was President Trump, who pressured him into scrapping plans to make small cars in a $1.2 billion plant in Mexico. Pretty rotten luck when you consider that all the car makers have found their way to Mexico to save costs and make cars, particularly small cars, more economic.
The man who replaces Fields? He's a close friend of Chairman Bill Ford, who refused to say Fields was fired, instead saying they both agreed after 28 years at Ford, it would be good for the 56-year-old to be replaced by the 62-year-old Hackett.
Bill Ford talked about the great job Hackett had done at Steelcase (SCS) , the office cabinet company, before joining Ford. It's tough to tell from the stock. It came public at $28 after Hackett had been the CEO and finished at $17 when he retired, although to be fair, like Fields, the stock was up on a spike when it came public and the company never fulfilled its grand ambitions.
To me, Fields should have been given more of a chance. Now it's Hackett's turn. Let's hope his experience at Steelcase has some relevance to Ford because, believe me, he will need it. The job sure won't be any easier than the one Fields did his best to take on at a time when running a traditional auto company has never been more difficult.