DETROIT -- Ford Motor’s Joe Hinrichs, 53, will retire as president of automotive, and Jim Farley, 57, president of new business technology and strategy, will become chief operating officer.
The changes are meant to accelerate the automaker's transformation into a higher-growth, higher-margin business, Ford said in a statement on Friday.
Farley will report to CEO Jim Hackett.
Hackett on Friday stressed the need to move with more urgency as the company attempts to implement elements of his self-described “fitness” plan.
Hackett is targeting 8 percent operating margins on the company's global automotive business, and 10 percent margins in North America, or roughly double what the company has achieved in recent quarters, and well below recent margins at rivals General Motors and Fiat Chrysler.
Farley told Reuters that Ford needs to move more quickly, especially around taking advantage of the software, data and connectivity in its vehicles including commercial vehicles. Farley added that Ford was "deep" in partnership talks with digital companies to improve its customer experience.
"We put a lot of new cost and capability in these new vehicles," Farley said in a telephone interview. "We have to get a lot quicker in taking advantage of them. We do not have two or three years to figure out how we use connectivity in the F-150 and our new electric architecture that we launch later this year."
Dan Levy, an analyst for Credit Suisse, said Ford has struggled with execution, potentially explaining the management shakeup. "Farley's promotion to COO positions him as a successor to the CEO role," Levy said in a note to clients.
Farley joined Ford in 2007 from Toyota as global head of marketing and sales and went on to lead Lincoln, South America, Ford of Europe and all of Ford's global markets in successive roles.
"Jim Farley is the right person to take on this important new role," Hackett said in the statement. "Jim's passion for great vehicles and his intense drive for results are well known. He also has developed into a transformational leader with the imagination and foresight to help lead Ford into the future."
“I have a partnership with Jim Farley in that I think the two of us compliment each other really well,” Hackett said, adding he had no plans to vacate the CEO role.
Farley is expected to retain his role as head of Ford Smart Mobility, the company's autonomous vehicle unit, and its partnership with Argo AI, a Pittsburgh-based autonomous technology firm.
In another change, Hau Thai-Tang, Ford’s chief product development and purchasing officer, will take on an expanded role and will report to Farley, Ford said. He will add responsibility for the company’s Enterprise Product Line Management and connectivity arms.