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Thu September 13, 2012
The man brave enough to take Alan Mulally at his word could be Ford's next CEO
Ever since Ford CEO Alan Mulally 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 -- even though the man is by all accounts healthy, extremely fit, and a fierce competitor on the tennis court and golf course - and even though he seems to relish his job.
Mulally just completed a grueling tour abroad, visiting Spain, announcing in China that the Lincoln brand would be re-introduced there, and concluding with a big splashy product unveiling in Amsterdam.
His answer to the retirement question has remained the same: "I enjoy serving at Ford."
But it appears that finally, Mulally is ready to give a more definite answer.
Bloomberg News and the Wall Street Journal report that Thursday, the Board of Ford Motor Company will discuss, and perhaps vote on, a promotion for Mark Fields, to Chief Operating Officer -- a stepping stone to CEO -- and that Mulally plans to retire at the end of 2013.
Ford Motor Company has declined to confirm the reports.
If true, "it's the end of an era," says Rebecca Lindland, an analyst with IHS Automotive. She calls Mulally's deep and positive impact on Ford "unprecedented," given the relatively brief time he has led the company.
Mulally was lured from Boeing in 2006.
Back then, reaction from the automotive press and analysts ranged from skepticism to complete dismay.
The water cooler consensus: this guy is an car business outsider, with no idea what a complicated and difficult industry he's gotten himself into.
Many figured he'd be chewed up and spit out by the pitiless Ford machinery pretty darn quick.
"Wow, we all just shook our heads," says Michelle Krebs, an analyst with Edmunds.com, remembering the first time Mulally was officially introduced to the ranks of auto punditry.
That was in Traverse City, a few months after he took the helm of Ford, at the Center for Automotive Research's annual auto industry conference .
"We said, he doesn't know what he's doing, he doesn't understand this industry, he can't answer questions. But then he started producing results."
Those results included a big improvement in the quality and reliability and appeal of Ford's vehicles, made possible by a massive $24 billion dollar loan from private banks.
That money also permitted Ford to avoid the fate of Chrysler and General Motors, which were forced into bankruptcy in 2009.
"And (Mullaly) started doing things that are so logical that we on the outside said, why have they never done that before?" says Krebs. "Why do we have to have a different focus for Europe and for China and the U.S., why couldn't we (the U.S.) have the stuff in Europe? He asked that same question, and he made it happen." The result is Ford started to become a global company, with similar products in different regions of the world, built on the same platforms.
Mulally also changed the dysfunctional culture of Ford, which was infamous for fierce competition between executives, fighting to protect their separate turfs. Hiding bad news was accepted practice.
Mulally established weekly meetings with his top leadership. Attendance was required. Each manager had a few minutes to inform him and their peers what was going on in their programs. The reports were color-coded -- green for everything's great, yellow for problems, and red for big, serious problems.
At first, all the charts were green. Mulally continued to insist that people disclose the truth.
The man who was brave enough to be the first to show a red chart? Mark Fields, Ford's President of the Americas, and now, the man expected to take Mulally's job when he leaves.
Two weeks after Fields admitted he had a big problem with one of his new vehicles - and asked for help from colleagues, everyone followed suit.
Telling the truth no longer was the kiss of death at Ford Motor Company.
"And that was the smartest thing he ever could have done," says Lindland.
She says Fields is the right man to lead Ford after Mulally's departure.
"He's confident enough not to have to change things just for the sake of changing them," she says. "He certainly has the credentials, having spent so much time in Europe," which could lose a billion dollars this year.
As COO, Fields will have more responsibility for the company's overall performance, including areas where Ford is weaker, including Europe, South America, and China.
Fields has worked at Ford Motor Company for 23 years, working his way up through company ranks.
He'd be 52 if he gets the top job at Ford in 2013.
Ford Motor Company will once again be led by an insider - but an insider with a difference -- who learned from an outsider how to make a company work again.