“If there was one area where Ford was admittedly soft in more recent years,” Johnson said, it was around exceeding expectations of profitability.”
Pushing costs down might improve results, he added, which is something Hinrichs will be well-positioned to do when he takes over as executive vice president of global operations on June 1.
General Motors has surpassed expectations in its earnings forecasts and quarterly results, whereas Ford’s record has been more mixed.
“For example, profits on the new F-Series, while solid, appear to be less than they could be due to decisions on commodities, such as steel and aluminum,” Johnson said. “A new role of head of global operations would allow these issues to be addressed.”
Since 2012, Hinrichs has been executive vice president and president for the Americas, running Ford’s North American and South American business units.
Prior to that, Hinrichs was group vice president and president of Asia Pacific and Africa beginning in December 2009, and served as chairman and CEO of Ford China from November 2010 to December 2011.
At a time when China has become the world’s largest car market, experience there can hardly hurt. Hinrichs oversaw the construction of nine new manufacturing plants in the region, introduced about 50 new vehicles to those markets, and was responsible for partnerships with Asian companies, such as China’s Changan and JMC, as well as Japan-based Mazda.
Prior to that, Hinrichs held a number of positions in manufacturing, operations and labor affairs, first in North America and then around the world, including serving as CEO of Ford Canada for a time. He started at Ford in 2000, running the Van Dyke Transmission Plant in Sterling Heights, Michigan.
As for Farley, he will also take on his new role on June 1, assuming the title of executive vice president, global markets.
Before his promotion, Farley was executive vice president and president, Ford Europe, Middle East and Africa, leading Ford’s European operations to record profitability, record margins and increased sales, Ford said in a press release.
Farley’s sales and marketing experience might end up being key to simplifying the messages Ford has been sending to customers and investors. That is another challenge Executive Chairman Bill Ford has publicly discussed, and that analysts have pointed out.
“Ford’s reputation with the investor community with respect to the secular pressures is that they are throwing a lot of things at the wall,” said RBC analyst Joseph Spak, in a note sent Monday. He added that the company is “doing a lot. Some of it may be smart. But the overall communication hasn’t been great. A simpler message may be needed.”
Farley also has experience with the typically more profitable premium brands — he oversaw the introduction of Ford’s Lincoln brand into China, a market where General Motors’ competing Buick brand has seen a great deal of success. He also presided over the release of the Lincoln MKC, a premium crossover SUV.
Farley came to Ford from Toyota, where he was group vice president and general manager for the Lexus brand, and he had overseen the introduction of the Scion brand.
Much attention has been placed on whether Ford can compete with Silicon Valley tech firms racing to build autonomous cars and develop mobility solutions. But, said RBC’s Spak, deep experience with core businesses may be deeply needed at the Blue Oval.
“We and the market spend a lot of time talking about the future with Ford,” he said. “However, we wonder if the board is also questioning some of the strategic decisions with their core business. For instance, GM decided to re-enter the U.S. small pickup market over 3 years ago and Ford at the time said they didn’t see a market for it. Ford will now re-enter that market 3 years from today. This is a small segment to be sure, but it may show some insight into decision making.”