Following the release of its worse-than-expected quarterly results and its equally disappointing outlook for the rest of the year, US automaker Ford has now decided to shake up its management. The company announced on Friday that it has removed the president of its auto unit and replaced him with someone else.
Ford announced that it has replaced Joe Hinrichs with its current president of new businesses, technology, and strategy, Jim Farley. Hinrichs, who previously worked at General Motors, has been working with Ford with the past 19 years. Ford did not specify why it had removed Hinrich and only termed his departure as a retirement. This is despite the fact that Hinrich is only 53-years old.
The company's CEO, Jim Hackett, mentioned in a statement that the company felt that Farley was the right person to take on the important role to drive future growth. Farley will officially take over Hinrich's responsibilities on the first of March.
Hackett thanked Hinrich in his statement for the contributions he had given to the company over the past two decades. The CEO added that Hinrich was instrumental in helping Ford survive the Great Recession without it having to need taxpayer bailout or go bankrupt.
Hackett clarified to reporters that Hinrich's departure had nothing to do with the re-launch issues of its Explorer SUV. Problems with quality and production resulted in a massive decline in sales for the company's best-selling SUV, eating into its bottom line. Hackett claims that all executives share the responsibilities for the issues and that Hinrich's removal was not tied to the problem.
Ford's shares prices have so far dropped to a new 52-week low following the release of its disappointing fourth-quarter earnings. The company reported a larger-than-expected loss for the quarter, which managed to erase its profits for the entire year. Last year, the company's stock had only dropped by 1.7 percent. Since January, the stock has dropped by more than 11.3 percent already.
Hackett admitted during the company's latest earnings call that its performance fell short of what was promised to investors. The CEO, who had recently been the subject of criticism over the progress of its ambitious $11 billion global restructuring plan, also revealed that its expected earnings for the first quarter might be affected. Ford revealed that it expects its earnings before interest and taxes in the first quarter to be lower by about $1.1 billion.
