Ford CEO Bets Boldly on Electric Version of Mustang

Jim Hackett’s tenure as CEO of Ford is picking up some good traction these days as the company expands its iconic Mustang brand for the first time, with a new electric model, and after reaching a new national labor agreement without having to suffer a strike of any sort by the United Auto Workers—unlike cross-town rival General Motors.

What makes this week’s unveiling of the Mustang Mach-E at the Los Angeles Auto Show especially relevant to Hackett’s 2.5 years at the top of America’s No. 2 automaker is that, depending on what industry coverage you believe, the CEO himself made the momentous decision to cast a dramatically different and much more ambitious vision for the vehicle than product developers first envisioned.

Someday it may be possible to draw comparisons between Hackett’s move and one of the biggest new-product successes in automotive history, when Ford’s then-president, Lee Iacocca, authorized production of the original Mustang sports car in 1964. Of course, Hackett’s big bet on the Mustang Mach-E could go sideways instead.

In any event, it’s the first new nameplate introduced by Ford under Hackett’s stewardship, which began in the spring of 2017 after the former CEO of Steelcase succeeded Ford career man Mark Fields in the top job. Also of significance is that the other biggest influence on the decisions that led to the birth of the Mustang Mach-E was Hackett’s heir apparent, Jim Farley, who currently is Ford’s president of global markets.

Mach-E is a new all-electric SUV that mimics Mustang’s sports-car profile, bears the brand’s signature taillights, aggressive front and pony logo, and is meant to be a serious competitor to established performance EVs such as Tesla. Unlike most other new EV offerings, Hackett told Bloomberg, Mach-E will make a profit “on vehicle one. That’s surprising a lot of people because electrics have not had a history of making money. This will,” he figures, because Mach-E will draw prices starting in the mid-$30,000s (including U.S.-government EV-purchase subsidies) and will tap into the passion that the Mustang brand generates.

And there may be the rub. Originally, this long-range battery-electric crossover had been in development for three years as more of a wagon-like reprise of the electric version of Focus, a compact sedan that Ford is discontinuing. But Farley wanted a new car that would be inspiring and performance-oriented, not just another “compliance car” that would simply help the company meet tougher U.S. emissions and fuel-economy standards, according to Automotive News. Farley even went so far as to tell the development crew, “Think Mustang.”

But the new boss was on the shoulder of Farley, whom he’d just promoted to the new job. Hackett also “smelled a dud” in original plans for the vehicle, according to TheTruthAboutCars.com and, as reported by a number of industry watchers, “Jim Hackett was the man behind the switch.”

Whatever its paternity, the switching of the new car to a Mustang variant was a game-changer, for better or worse. Hackett and Farley sensed an opportunity to leverage Ford’s most buzz-worthy brand at a time when it was beginning to phase out production of other sedans, catapulting the company into an important future segment with a vehicle that would be sure to get a lot of attention just because of its nameplate. Many Mustang fans have panned the move, feeling offended by a sort of redefinition of their favorite gas-powered vehicle and apprehension that the introduction of an all-electric Mustang into the stable might eventually spell the end of their favorite pony car.

So Hackett was undeterred by the prospect of the sort of blowback that he knew would ensue. He also made the tough call to produce the new Mach-E in Mexico because Ford had some idle capacity there; it doesn’t in North America. It’s only been three years, during Fields’ tenure, since Ford’s decision to move production of Focus to Mexico from a plant near Detroit became a huge issue in the U.S. presidential election, created by Donald Trump.

But Hackett has cover for the tentative decision to build Mach-E in Mexico now because Ford essentially has replaced output of the low-margin Focus – and retained the jobs involved — with output of two much higher-profit vehicles: the new Ranger mid-size pickup and the upcoming new Bronco SUV.

Mustang Mach-E also represents a confident step in a new direction set by Hackett and Farley for Ford to attach modern requirements for electrification not to new models and brands but to the draft horses of its lineup, including not only Mustang but also the F-150 pickup truck. Already America’s best-selling vehicle for more than three decades, the F-150 line will gain a plug-in hybrid version as part of $11.5 billion that Ford has pledged to invest to roll out 40 electric and hybrid vehicles by 2022.