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Ford CEO Jim Hackett to step down, COO Jim Farley to take over

Ford CEO Jim Hackett is stepping down, and will be replaced by current COO Jim Farley. Yahoo Finance's On the Move panel discusses.

Video Transcript

ADAM SHAPIRO: Major news in the last two hours, a big change at the Ford Motor Company. Want to jump right into this. Shares of Ford right now are actually trading higher, about 1.5%. But shares at $6.80, not dramatically higher than the low they hit back during the Great Recession when they were trading, what, about $1, $1.20 a share. That was then. This is now.

And the news, of course, is that Jim Hackett will be out October 1, replaced by the new CEO, current COO Jim Farley. To discuss all of this, we want to go to the panel. And Julie, let me start with you. Ford has had a number of CEOs, but none have been successful like Alan Mulally.

JULIE HYMAN: No. I mean, to be fair, it's tough times for the auto industry more broadly, right? So that's kind of the backdrop here, particularly now during the pandemic. But even before this there were sort of some struggles with the US automakers in particular to keep up with their foreign competitors in terms of stock price and people buying the shares. Tesla right now gets all of the attention and the sort of glamour and sexiness in terms of investing in the automotive market. So all of that kind of against Hackett, I think.

And this is something that was not entirely unexpected. I mean, Farley has been gaining in his profile at the company. So this was something that you could argue Ford had kind of paved the way for already.

BRIAN CHEUNG: And I think too, when we talk about the rockiness that the Ford Motor Company has had at the top of the company, obviously we think about Mark Fields. He only lasted about three years as well. Jim Hackett, when he does step down, it'll be about three years that he had under his belt at the head of this company. But he's kind of setting up the company for what is probably a brighter chapter when we think about some of the very publicized releases that they've had in the past few months, the Ford mustang Mach E is a pretty big development on the EV front that could take on the likes of Tesla in addition to the Ford Bronco, which they just released not so long ago. The many variants of that seemed like it was drumming up a lot of excitement on social media.

So when a new CEO does take over, there will be those new releases to look forward to. But I think too, when you look at even the earnings that they just reported this week, right, they did beat estimates, although the bar was probably very low. But that, despite the fact that a lot of these factories were closed because of not only the coronavirus and shutdowns, but you remember those pretty contentious UAW negotiations at the end of last year.

So it seemed like, despite everything that Jim Hackett had to go through, it does seem like hopefully he can set up the next CEO for success for this company that, as you mentioned, Adam, has had a really big difficulty in trying to find a strong steady leader that can kind of bring stability like Mulally did.

ADAM SHAPIRO: And Jared Blikre, as we look at the strong steady leader concept, you know, I brought in Alan Mulally. But Mulally was in a different era and literally was downsizing Ford and leveraging the company to do that. What they have to do now is much different.

JARED BLIKRE: Yeah, much different because who are they competing against? They're competing with much smaller EV makers. You look at the Y-Fi interactive heat map for automakers, lots of green today. Nikola's up 7 and 1/2 percent, having yet to make one vehicle, followed by Mitsubishi, Renault. And so a lot of these are in the green.

And over the last two days though, some really stunning moves. We have Nikola up 30%. That's two days. Nio, the Chinese auto manufacturer, they're up 16%. And we have a brand new entrant to the field as of last week, Li Auto, that's a new Chinese EV company. That's up 4% as well.

So you combine that with Tesla. They've got their work cut out for them. There's a lot of money flowing into the space. But Ford does have a lot of the knowledge and resources and partnerships necessary to make the transformation. Will it be successful? That's another story.

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