Bill Ford is Executive Chairman.
Ford News - Robert Musial/John Fossen - Sept. 5, 2006
Bill Ford hands over the reigns of Ford to Boeing Exec. - Alan Mulally.
DEARBORN - Ford Motor Company chairman Bill Ford announced Tuesday he has recruited longtime Boeing executive Alan Mulally as the Company's new president and CEO. Mulally is credited with turning around the commercial airplanes division of the Boeing Company. He will take over immediately as Bill Ford focuses on his role as executive chairman.
"I was determined that our turnaround effort required the additional skills of an executive who has led a major manufacturing enterprise through such challenges before," Ford told employees in a memo, before appearing Tuesday with Mulally at a press conference at Ford World Headquarters.
Mulally, 61, has been at Boeing for 37 years, most recently as executive vice president and as president and chief executive officer of the commercial airplanes unit since 2001. In his new position with the automaker, he has also been elected to Ford’s board of directors.
His selection means that Ford, 49, will shed his current additional duties as CEO and chief operating officer and concentrate on the company’s strategic positioning as it engages its accelerated Way Forward plan, expected to be unveiled later this month.
"I think it's the right move for the company and I feel good that I could attract Alan here," Ford explained in a press conference with the media Tuesday afternoon. “I hope he has a very long run as CEO.”
The great grandson of the company’s founder also stressed that he was not leaving the company.
“I’ll be here every day and I will not rest until a prosperous future for the company is secured,” Ford told employees in an e-mail Tuesday.
"I would never have ever considered this opportunity if I didn't have a chance to work with Bill," Mulally said. "And the reason is that - it's back to the heritage, it's back to the long-term perspective about the business, doing the right thing, to make the finest automobile company in the world.
"And it takes a long-term perspective. And the fact that Bill and the family have been dedicated to that since 1903 really was important to me. Not only was that critical to me, but I think it was absolutely a condition for accepting this opportunity, Mulally said.
The moves, which caught industry observers and the media by surprise, were announced Tuesday afternoon by both Ford and Boeing.
Ford employees will get to hear more from both executives at a company “town hall meeting” on Wednesday morning.
Mulally comes aboard as the nation’s second-largest automaker struggles with declining sales and faces further restructuring designed to return Ford’s North American business to profitability.
Like other domestic carmakers, Ford has also been hurt as high gas prices earlier this summer caused sales of pickups and SUVs to plummet.
“Our priority goal has to be to fix North America and our other operations around the world to make them more seamless,” Ford said at the press conference. He said that the way the company had traditionally done business “is no longer sufficient to sustain profitability.”
On Tuesday, he also acknowledged the pressure he faced running the company as CEO and COO. He said he told the company’s board of directors in July that “I’ve got too much to do. I’m wearing too many hats.”
He said the search for a new CEO began earlier this summer and intensified in July. He said Mulally’s credentials and experience made him a top candidate.
In his remarks to the media, Mulally noted the similarities between Ford and Boeing. Both are known for “their innovations, global competition, product development and a skilled and motivated workforce,” he said. “The fundamentals between these two industries are exactly the same.”
Mulally says that his application of many of the quality lessons that Ford used to develop the Taurus helped Boeing create the revolutionary Boeing 777 airliner.
“Any new airplane or automobile starts with a point of view about the future,” he said in the press conference. Calling Ford Motor Company “a United States icon” as Boeing is, he added that working with Bill Ford and Ford Motor Company “is the only thing that could have attracted me to a job other than Boeing.”
“Everything I’ve seen of the Ford family of products excites me,” he said.
Wall Street reacted swiftly to the news as Ford shares rose 36 cents or 4.3 percent, to 8.75 a share in trading after the close of the New York Stock Exchange on Tuesday when the announcement was made. Earlier in the day, Ford had gained 12 cents in composite trading.
Most analysts also lauded the move.
"I'm a shareholder with Boeing where there's been a key turnaround in the last few years and he (Alan Mulally) has been a key leader in this aspect," said David Cole, president of Center for Automotive research. "I think it's a good move that symbolizes a high level of urgency in moving the Way Forward plan quickly. It reinforces the urgency with which Ford has to move in terms of the restructuring."
Cole applauded Ford's decision to remain actively involved in running the company. "This should be a relief. Bill is still engaged but he now has a partner at the top of the company."
“An outsider perspective is exactly what this company needs,” John Casesa, a managing partner of Casesa Strategic Advisors, told Bloomberg News.
A Ford dealer near Seattle where Boeing is headquartered also had good things to say about Mulally.
“He had done a really good job. He’s a quality guy,” said Rich Snyder, a dealer principal with Sound Ford, in Renton, Washington. “He did a good job with the unions so that bodes well for Ford, too."
Dealer Ed Witt of Witt Lincoln Mercury in San Diego listened to the news conference and liked what he heard.
“He sounded energetic, he sounded youthful, he sounded passionate and he sounded fresh,” said Witt, who said he wasn’t bothered that Mulally was coming from outside the auto industry.
“Boeing came from behind and showed that despite government subsidies in Europe (for competitor Airbus), they could compete. They had to go through a lot of pain to do it, but they are getting it done. I’m impressed by that and whatever Mulally had to do with that, he’s got my vote. He’s got my confidence. I can’t wait to meet him.”