Media playback is unsupported on your device Media caption Ford Motor company executive chairman Bill Ford explains why Ford has replaced its chief executive.

Ford's chairman has denied that he fired the car firm's chief executive.

"To be clear, I didn't fire Mark Fields... he decided to retire. That's an important distinction," Bill Ford, executive chair at Ford told the BBC.

The firm earlier said it had replaced chief executive, Mark Fields, following a major reshuffle at the US car giant.

His departure comes as Ford faces weak sales, falling profits and a near-40% decline in its share price since Mr Fields took up his role in 2014.

He is being replaced by Jim Hackett, 62, whom Mr Ford described as a "transformational business leader".

Image copyright PA Image caption Jim Hackett is the new boss of Ford

The former boss of office furniture firm Steelcase joined Ford last year to run its autonomous driving division.

Executive chairman Bill Ford - the great grandson of founder Henry Ford - said Mr Hackett was a "true visionary" and the right person to lead the car maker.

He will focus on modernising Ford and "transforming the company to meet tomorrow's challenges", as new technologies continue to transform manufacturing and the car industry.

Mr Ford said that following a board meeting on Friday, he and Mr Fields "got together and we decided it was the right time for him to resign".

The chairman added: "No decision like this is made hastily and there have been discussions for some time."

Shares in Ford rose 1.3% in morning trading in New York.

Analysis

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By Russell Hotten, business reporter

Mark Fields isn't just paying the price for a fall in Ford's US sales and a big slide in the share price over the past 12 months: he's a casualty of the company's failure to prepare for the future.

Ford, which gave the world its first mass-market car, is witnessing the end of the internal combustion engine. Long-range electric and autonomous transport is tomorrow's technology, and the likes of General Motors, Toyota, and Volkswagen are ahead in the race to exploit it.

Last month, Ford's stock market value fell behind Tesla, the electric car upstart that has never made a profit. It was a symbolic moment that underlines Ford's problems.

It's not that Mr Fields has failed to pour billions of dollars into self-drive and ride-sharing experiments - it's that shareholders see little return in sight.

Recent reports of tense boardroom meetings, compounded by a tetchy annual shareholders' meeting earlier this month, probably explain why Ford chairman Bill Ford Jr has acted now.

Mr Fields' replacement, Jim Hackett, heads the division that was set up to accelerate Ford's foray into autonomous vehicles. Mr Hackett also has a reputation as a cost-cutter. Experience of both will be needed in the years ahead.

Image copyright Getty Images

Last week, the carmaker said it planned to cut 10% of its salaried workforce in North America and Asia Pacific this year, on a voluntary basis.

Ford employed more than 200,000 people globally at the end of 2016, including about 101,000 in North America and 23,000 in Asia.

Sales in April were down 7% in the US and 11% lower in Europe compared with the same month last year. The firm has also been hit by costs related to safety recalls.

Last year, Ford sold 6.65 million vehicles worldwide, while rival General Motors sold 9.97 million, according to Statista.

GM reported a record performance in the first three months of 2017, with revenue 10.6% higher at $41.2bn, helped by strong sales of trucks and SUVs in the US.

Ford's revenue rose 4% to $39.1bn in the first three months of 2017.