Ford CEO Jim Hackett abruptly retires, hands reins to COO Jim Farley

Ford CEO and President Jim Hackett is stepping down, handing the reins to his protégé, Chief Operating Officer Jim Farley, effective Oct. 1.

Farley will be the fourth person to helm the car manufacturer since the Great Recession and, while many saw him as a shoe-in, he’s going to face some big challenges. That starts with rebuilding sales and market share while reversing recent losses and then getting investors to boost Ford’s sagging stock price.

If anyone seems positioned to turn things around, “Farley has a long track record with a lot of successes,” starting with his nearly two decades at Toyota and then Ford, which he joined in 2007, said Joe Phillippi, head of AutoTrends Consulting. But “the proof will be in the execution.”

The new CEO’s ties to the auto industry run deep. Though his father was a banker— working in Buenos Aires when Farley was born in 1960 — his grandfather went to work at Ford back in 1913.

From an early age, Farley was a classic “gearhead.” He still collects and races classic hot rods and race cars and takes pride in getting his fingernails dirty working on his private collection. He even worked for a while at the classic L.A. restoration shop run by the legendary Formula One champ, the late Phil Hill.

So, it was a surprise to some that Farley took his MBA from UCLA and went to work for IBM. But that didn’t last long. In 1990, he recalled, an offer from Toyota was “just too compelling.”

It was a significant challenge, helping the Japanese automaker launch the new Lexus luxury brand, a concept that seemed, to many high-line buyers, an oxymoron. But, within a few years, Lexus was outselling traditional rivals Mercedes-Benz and BMW.

Over the coming years, Farley cycled through a series of often unlikely assignments. “We’re going to have to take a lot of risk,” he said during a 2002 interview, as he took on the launch of another all-new brand, Toyota’s youth-oriented Scion. The marque would eventually lose momentum but, while Farley was at the helm, it was one of the fastest-growing brands in the U.S.

“I followed Toyota very closely, when I was at Boeing,” recalled former Ford CEO Alan Mulally, adding that, “I became aware of (Farley) when he started doing Scion.” In 2007, Mullaly made Farley an offer and wooed him to Detroit.

Over the last 13 years, Farley has continued cycling through assignments, often sent to solve problems no one else could address. That included putting in place a turnaround plan for Ford’s long-troubled luxury brand, Lincoln. More recently, he crafted the mobility services program that was the cornerstone of CEO Hackett’s tenure.

Farley has “great instincts for the future and the new technologies that are changing our industry,” Chairman Bill Ford said on an investor call Tuesday.

Working for Farley can be a challenge, according to several who have reported to him at Toyota and Ford. “He is always moving a few steps ahead of everyone else,” said one current Ford employee, who asked not to be identified by name. Farley has little patience for those who aren’t doing their job, he added, noting the new CEO is well known for dropping “F-“, or “Farley-Bombs” when he’s angry.

But Farley’s “encyclopedic grasp of what’s going on in this company” has made him indispensable to top management, said Hackett, and helped his successor continue to climb the corporate ladder even as other promising executives have lost their grip — or been pushed off.

Farley appeared to cement his position as Hackett’s heir following the management shake-up earlier this year that saw his last serious rival, Ford autos chief Joe Hinrichs, step down.

Ford has often reached outside for talent during times of trouble. It hired Robert McNamara — who later become Secretary of Defense — in the 1950s. More recently, it brought in Boeing’s Mullaly and then Hackett, a former Steelcase CEO.

The automaker’s board “talked about” reaching beyond its executive suite, Bill Ford said on Tuesday's call. “We did throw some names around. But every time we did that we felt Jim Farley’s name rose to the top.”