The company has struggled in recent years and is in the midst of an 11 billion US dollars restructuring plan designed to make it leaner and crank out new vehicles to replace what was an ageing model lineup.
As chief operating officer, the 58-year-old Mr Farley led the company’s global markets and product development.
He was in charge as Ford rolled out a revamped F-150 pick-up, the new Bronco off-road SUV brand and the electric Mustang Mach-E SUV.
Mr Farley was was hired away from Toyota by then-chief executive Alan Mulally in November of 2007 to run Ford’s marketing operations.
The 65-year-old Mr Hackett took over for the ousted Mark Fields in May of 2017.
Almost immediately he began reviewing Ford’s management structure and flattened the organisation so it could move faster.
But his often lengthy directives confused employees who were not clear on where the company was headed.
Mr Hackett, a retired Steelcase chief executive who had run Ford’s mobility efforts, will stay on as an adviser to Mr Farley through March of 2021.
Ford executive chairman Bill Ford, the great grandson of company founder Henry Ford, praised Mr Hackett for modernising the company and reducing bureaucracy.
“We now have compelling plans for electric and autonomous vehicles, as well as full vehicle connectivity.
“And we are becoming much more nimble,” Mr Ford said.
He cited Ford’s quick shift to make ventilators, face shields and other protective equipment to help alleviate shortages at the start of the coronavirus pandemic.
Just after the change was announced Tuesday morning, Ford shares rose 2% to 6.84 US dollars in pre-market trading.
