Ford (F) CEO Mark Fields has been on the job for almost exactly a year now—the career Ford man became CEO on July 1, 2014—and it’s been a bit of a bumpy ride so far. First, he had a tough act to follow in Alan Mulally, the highly charismatic CEO who guided Ford through the Great Recession that decimated the auto industry. And second, Fields has been overseeing what amounts to a massive gamble for Ford, transitioning the world’s best-selling vehicle, the F-150 pickup truck, from a steel to an aluminum body. There’ve been some hiccups along the way in that changeover—production dropped as lines were retooled— sales took a hit and the markets reacted. Ford’s stock is down 17.5% over the past 12 months while the S&P 500 has gained 7.5%. And yet investors are likely to give Fields, 54, more time to get his footing and to get the F-150 back on track.
In fact, during a recent interview with me in Ford’s Dearborn, Mich., F-150 assembly plant, just a few feet from the moving assembly line where a new truck rolls off about once a minute, Fields hardly seemed daunted as he spoke about the F-150, Ford’s overall prospects and what it takes to run such a large company.
Fields insisted that the launch was going well even though the truck’s archrival Chevy Silverado had gained share, saying that “the response from consumers has just been terrific.” He did acknowledge, “there was a lot of skepticism because we really are taking a revolutionary step.” And a few days after the interview Ford announced discounts of up to $10,000 for the truck.
I asked Fields for a companywide assessment of its prospects and he said that he considered this “a breakthrough year” for the company. “Breakthrough in terms of our financial performance. We expect our pre-tax operating income to grow substantially this year to between $8.5 [billion] and $9 billion. We’re also planning to grow our operating margin and cash flow. But at the same time, we had 24 global launches last year—the most in our history and we expect 15 more this year. So expect that to positively impact our sales and our share around the world.
Globally, Fields sees a mixed bag: “ [In] North America we think conditions for healthy levels of industry are quite good. Europe is starting to recover, albeit off of a low base. South America is a very challenging environment right now. We expect the economy to shrink but I think we’re well positioned with the new products and the share that we’re gaining. And China, we’re well positioned there but, you know, clearly the market is slowing down there. But we’re very well positioned with a number of new product launches and there’s never a bad time to introduce great product into the marketplace. So overall stepping back, we think it’s still conducive to global growth, but it’s at different clock speeds around the world.”
[More of our interview with Mark Fields: Ford CEO must balance creeping car technology and consumer privacy]
How does Fields and his team stay on top of the ever-changing global environment where almost every news development has implications for his business? “Literally every week as a managing team we get together every Thursday, we go through the business environment and what’s going on in the world and we then relate that to our strategies. Does it reconfirm our strategies? Do we have to tweak some? And then we turn that into a plan that we can relentlessly measure ourselves against—every Thursday morning."
Ride sharing has become a major industry trend and Fields talked about Ford’s plans there. “One of the trends that we’re seeing particularly in major urban areas is that people want access over ownership,” he says. “Earlier this year we started with 25 global experiments in a number of different areas. Now that we have those experiments underway we’ve now stepped back and said, listen, we’re now moving from research to implementation. We’re starting in two specific areas, flexible use and ownership and also multi-modal urban mobility solutions. So on the flexible use and ownership we’re doing some things in terms of ride sharing. Our Ford credit operation is working with a company here in the U.S. and a company in London to offer Ford credit customers the opportunity to rent out their vehicles to others to help them pay for things like their monthly payment. We’re doing something called Go-Drive, which is an experiment -- or now a pilot in London -- where customers can take one-way trips. Use the vehicle, get in the vehicle or reserve it. Go to another part of London and we’ll have guaranteed parking and it’s pay as you go. So for us, it’s looking at these trends trying to respond to them and make people’s lives easier and better, but also do some pilots and say where can we make a business model around this that actually complements our core business.”
(Read the entire interview including Fields’ take on self-driving cars, electric cars, Tesla and more.)
As for young people starting out, Fields says they should “run to the fire” -- meaning go where the action is. “Run to those areas where you’ll learn the most,” he continued. “You’ll also contribute the most…they may not be the most sexy parts of the business or where everybody’s going, but you’ll end up contributing to the business and developing yourself more than you ever thought you would.”
Fair enough. Now that he’s CEO, Fields has plenty of action and he doesn’t even have to run to it. These days the action comes straight at him
In fact, during a recent interview with me in Ford’s Dearborn, Mich., F-150 assembly plant, just a few feet from the moving assembly line where a new truck rolls off about once a minute, Fields hardly seemed daunted as he spoke about the F-150, Ford’s overall prospects and what it takes to run such a large company.
Fields insisted that the launch was going well even though the truck’s archrival Chevy Silverado had gained share, saying that “the response from consumers has just been terrific.” He did acknowledge, “there was a lot of skepticism because we really are taking a revolutionary step.” And a few days after the interview Ford announced discounts of up to $10,000 for the truck.
I asked Fields for a companywide assessment of its prospects and he said that he considered this “a breakthrough year” for the company. “Breakthrough in terms of our financial performance. We expect our pre-tax operating income to grow substantially this year to between $8.5 [billion] and $9 billion. We’re also planning to grow our operating margin and cash flow. But at the same time, we had 24 global launches last year—the most in our history and we expect 15 more this year. So expect that to positively impact our sales and our share around the world.
Globally, Fields sees a mixed bag: “ [In] North America we think conditions for healthy levels of industry are quite good. Europe is starting to recover, albeit off of a low base. South America is a very challenging environment right now. We expect the economy to shrink but I think we’re well positioned with the new products and the share that we’re gaining. And China, we’re well positioned there but, you know, clearly the market is slowing down there. But we’re very well positioned with a number of new product launches and there’s never a bad time to introduce great product into the marketplace. So overall stepping back, we think it’s still conducive to global growth, but it’s at different clock speeds around the world.”
[More of our interview with Mark Fields: Ford CEO must balance creeping car technology and consumer privacy]
How does Fields and his team stay on top of the ever-changing global environment where almost every news development has implications for his business? “Literally every week as a managing team we get together every Thursday, we go through the business environment and what’s going on in the world and we then relate that to our strategies. Does it reconfirm our strategies? Do we have to tweak some? And then we turn that into a plan that we can relentlessly measure ourselves against—every Thursday morning."
Ride sharing has become a major industry trend and Fields talked about Ford’s plans there. “One of the trends that we’re seeing particularly in major urban areas is that people want access over ownership,” he says. “Earlier this year we started with 25 global experiments in a number of different areas. Now that we have those experiments underway we’ve now stepped back and said, listen, we’re now moving from research to implementation. We’re starting in two specific areas, flexible use and ownership and also multi-modal urban mobility solutions. So on the flexible use and ownership we’re doing some things in terms of ride sharing. Our Ford credit operation is working with a company here in the U.S. and a company in London to offer Ford credit customers the opportunity to rent out their vehicles to others to help them pay for things like their monthly payment. We’re doing something called Go-Drive, which is an experiment -- or now a pilot in London -- where customers can take one-way trips. Use the vehicle, get in the vehicle or reserve it. Go to another part of London and we’ll have guaranteed parking and it’s pay as you go. So for us, it’s looking at these trends trying to respond to them and make people’s lives easier and better, but also do some pilots and say where can we make a business model around this that actually complements our core business.”
(Read the entire interview including Fields’ take on self-driving cars, electric cars, Tesla and more.)
As for young people starting out, Fields says they should “run to the fire” -- meaning go where the action is. “Run to those areas where you’ll learn the most,” he continued. “You’ll also contribute the most…they may not be the most sexy parts of the business or where everybody’s going, but you’ll end up contributing to the business and developing yourself more than you ever thought you would.”
Fair enough. Now that he’s CEO, Fields has plenty of action and he doesn’t even have to run to it. These days the action comes straight at him