Ford out, Alan Mulally in
That is how Bill Ford, 49, the great-grandson of the founder of the Ford Motor Company, described Alan Mulally’s inauguration into his new role in Ford Motor Company.
Mulally drives a Lexus and he is an outsider from the auto industry. Mulally is exactly what the Detroit auto industry needs, especially Ford Motor Company. Bill Ford, admittedly, “didn’t expect to be CEO the first time” when asked if he would be back. Ford has already put what he thought was the best team together that he could find inside of Ford. Mr. Ford, and Ford Motor Company, obviously realized that even with the best they could find inside of Ford, Ford Motor Co. needed a leader that had the experience of leading a company back into the black.
Toyota has passed Ford as the nation’s second-largest auto company, following General Motors. Bill Ford has seemed frustrated by the pace of change in his company and by his ability to make his company “green”, something Ford has said he believes should be done. Some have said the reason for the slow pace is because Bill Ford listens to too many outsiders, including the environmentalist that say he isn’t doing enough. Bill Ford said, in his relinquishment of the CEO position, that “the Ford team needed someone that had the battle scars and had come out victorious.”
Alan Mulally, 61, worked with Boeing for 37 years. Boeing airplanes take about the same time to develop and produce as a new car does in Detroit. Boeing has a very strong labor union, the International Association of Machinists and Aerospace Workers, that did go on strike during Mulally’s tenure with Boeing.
Mulally has never been in the car business, but he has studied the Toyota production system and the development of the Ford Taurus and the moving assembly line. Mulally says he learned lessons from these systems and used them when he cut production lines from 14 to 4 inside of Boeing. According to the Ford website, Mulally led the turnaround of the commercial airplane division of The Boeing Company. He has a record of success in customer satisfaction, manufacturing, product development, labor relations, and supplier management.
Prior to his current position, Mulally served as president of Boeing Information, Space & Defense Systems, and senior vice president of The Boeing Company. Appointed to that role in February 1997, he was responsible for Boeing’s defense, space and government business. An interesting note, since on the same day this announcement happened there was an announcement that the Oval office would be meeting with the Big 3 in November about fuel technology.
Bill Ford, who said he would remain “extremely active” in the business, praised Mulally as “an outstanding leader and a man of great character.” He noted that Mulally had applied many of the lessons from Ford’s success in developing the Taurus to Boeing’s creation of the revolutionary Boeing 777 airliner. That experience, chronicled in the book, “Working Together,” by James P. Lewis, tells how the leadership principles Mulally learned from Ford and developed at Boeing may be applied to other businesses. “Clearly, the challenges Boeing faced in recent years have many parallels to our own,” Bill Ford said.
On CNBC, Phil LeBeau spoke with Bill Ford Jr., below are some of Bill Ford’s comments: “I wanted the very best person I could find. The courtship started at the end of July. I checked him out with a number of people. I was the CEO and I was wearing a lot of hats.”
“Let me assure you: I’m not going anywhere,” Bill Ford wrote to Ford workers. “As executive chairman, I intend to remain extremely active in the direction of this Company. I’ll be here every day and I will not rest until a prosperous future for this Company is secured.”
What wasn’t talked about were the top executives at Ford who, presumably, were all expecting to someday take the helm of Ford Motor Co. Presumably, that was talked about as Bill Ford structured his team last year. The top executives in the new structure are, Lewis Booth, Ford of Europe and Premiere Automotive Group, Chairman, Ford of Europe; Mark Fields, President, The Americas; Don R. Leclair, Chief Financial Officer; Mark A. Schulz, President, International Operations; Anne Stevens, Chief Operating Officer, The Americas.
How unhappy are any of these executives? In the conference, Bill Ford said that “this is a lifetime job” when asked if Mulally was going to retire in 4 years, at 65 years old. Let’s say he stayed for nine years, till he was 70. How many of the “way forward” executives are willing to wait that long for another chance to make CEO? Time is not on Mulally’s side: how will he build a team and have them all gel and be on the same page before “The way forward – part two” is announced?
Ford has already lost a couple of Board of Directors. Mulally has said he didn’t plan to bring people over from Boeing. There is already anxiety inside of Ford. Mulally’s biggest talent is going to be in making sure there is no talent drain inside of Ford Motor Company as he goes forward.
Will there be a vote of confidence from the executives inside Ford’s top management? And will Mulally be able to bring a product out that spurs the North American market sales?