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Thu September 13, 2012
Mulally leaving Ford? AP lists 3 reasons to worry, and 3 reasons to be hopeful
Henry Ford's great-grandson said it plainly to the Associated Press... Ford Motor Company was once plagued by internal divisions that dragged the company down.
"At the old Ford, you had heroes and villains," [Bill Ford Jr.] said. "Now, it's, `OK, where do we have issues and how do we solve them?'"
Alan Mulally was brought in by Bill Ford Jr. in 2006 as Ford's new CEO.
Mulally has been credited with righting the ship. Michigan Radio's Tracy Samilton wrote about how Mulally has changed things at Ford over the last six years.
She writes about how Mulally's retirement has been a point of speculation ever since he turned 65:
...one question invariably comes up during media scrums at Ford Motor Company events. "When are you going to retire?" some reporter or other asks. Now that he's 67, the question is being asked even more frequently
Yesterday, Bloomberg News broke a story about moves the company plans to make:
Ford Motor Co. (F) directors are preparing to promote Mark Fields to chief operating officer from president of the Americas, a move that anoints him as probable successor to Chief Executive Officer Alan Mulally, according to a person familiar with the plan.
Bloomberg writes Mulally is expected to retire at the end of 2013. Really? So far the company itself is mum.
But the retirement talk, has AP auto reporters Dee-Ann Durbin and Tom Krisher writing about life at Ford after Mulally.
They highlight six points about the company.
3 of which they say should worry investors, and three of which they say are encouraging signs.
First the bad:
- Bad Habits - this has to do with a culture of "fiefdoms" in Ford that Mulally helped change. Durbin and Krisher quote one auto analyst who says "sometimes without the driving force, parts of the culture revert back to the old way of doing things." They write that many old execs that were there during the infighting are still in the company.
- Unfinished Business - The AP lists three projects that could "flop" without Mulally's leadership - a restructuring plan in Europe, expansion in Asia, remaking the Lincoln brand at home.
- Anemic Stock Price - it sits at around $10, and Durbin and Krisher say Wall St. investors, who have "no real love for Detroit," could become concerned about Ford without Mulally.
Now the good:
- Transformed company - Durbin and Krisher write the company's balance sheet is "cleaned up" and changes Mulally has put in place, like weekly business review meetings, will stay.
- Better Products - Better designs and designs that are more applicable globally have helped, write Durbin and Krisher, "a strong lineup of cars has made Ford less reliant on pickup trucks, whose sales can fall when gas prices spike."
- Ford Family - Ford's great-grandson will likely remain as the executive chairman of Ford Motor Company. He told the AP, "You often hear people at Ford say we can't manage prosperity. I think it's really quite different than that. It's that we stop changing."
Bloomberg News reported that Mark Fields is a "probable successor" to Mulally.
There are other possibilities. Asked for comment from Bloomberg, Ford responded this way:
“We do not comment on speculation about personnel actions,” Ray Day, a spokesman, said yesterday in an e-mail. “Regarding succession, Ford Motor Co. takes succession planning very seriously, and we have succession plans in place for each of our key leadership positions.”
Ford's monthly board meeting is being held today.