The reasoning behind Ford Motor Company’s swift replacement of CEO Mark Fields this week is vast, but among the list is a general drought of new products. The lull in the Ford product pipeline, as reported by Reuters, is one of the larger challenges for new CEO Jim Hackett to deal with. Unfortunately there’s probably not a lot Hackett can do about the situation.
Most industry analysts expect Ford to be fairly light on new product launches until about 2019. The lull is largely credited to the company’s massive, expensive 2014 overhaul of the F-Series truck line. Ironically that huge capital investment was not a decision by Mark Fields, but rather his predecessor Alan Mulally.
While the company’s investment and switch to aluminum has managed to keep Ford as the top-dog of the pickup truck game, it has starved the rest of the company’s lineup. The move to aluminum is also a bit questionable in terms of strategy given that gasoline prices have stayed relatively flat in recent years.
The decisions have had ramifications to Ford. The company’s sales in the U.S. are falling faster than some of its rivals, including cross-town rival GM. In April Ford’s U.S. sales declined 7.2 percent in an overall market that was down only 4.7 percent. On a year-to-date basis Ford is down 5 percent while the industry as a whole is down only 2.4 percent. This immediate concern has been an issue with Ford shareholders and something the new CEO must address.
Unfortunately for Hackett, lead times to developing new vehicles aren’t that quick. Just as the F-150 decision was made well before Mark Fields took the top spot, many of product decisions made over the last four years are already baked in at Ford and cannot be changed.
It’s going to be interesting to see how the new team at Ford address their short term product problems.