Use access key #2 to skip to page content.

TMFPostOfTheDay (< 20)

Mulally Retires

Recs

4

May 02, 2014 – Comments (3) | RELATED TICKERS: F

Board: Ford Motor Company

Author: TMFThump

In the news conference announcing the leadership change this morning, I had a few takeaways that I wanted to share. Additionally, there's a link below to a video of the event for those interested.

One of the points made during the announcement and reiterated in the media Q&A afterward was that Mulally would also be resigning from his board seat. Perhaps this was done to help Mark Fields forge his own path without having to work in the shadow cast by, as Bill Ford described him, a Hall of Fame CEO.

From beginning to end the overriding theme was focused on the culture at Ford. Bill Ford made it a point in his first meeting with Mulally back in 2006 that there were a lot of great things about the culture at Ford, while acknowledging that there were some not so great things as well. One of the latter would probably be a lack of management transparency. An anecdote of this has been repeated many times that in Mulally's first days as CEO he brought the management team together and every senior manager was giving presentations that painted a picture of the business running close to perfectly. None of the programs were reported to be in trouble. Everything was green, which in Ford parlance indicates right on track.

What puzzled Mulally was that here was Ford, deep in red ink, the business was a financial mess, and everything was hunky dory? It didn't add up. He urged (perhaps challenged or insisted is more accurate) someone to come forward and acknowledge a problem. Fields was the first, breaking the ice, and the floodgates opened. What ensued was a movement toward openness and honesty in the management ranks that hadn't been evident in years, if ever. Mark Fields role in that was significant, and as Bill Ford noted today, he is a perfect candidate to sustain that transparency because he helped usher it in.

John Rosevear published an article in TMF today that makes mention of the beginnings of the One Ford plan. A good bit of the foundation of that plan was laid prior to Mulally's arrival in a plan then known as the Way Forward. Many of the product development initiatives that led to common architecture for Ford cars throughout the world were part of that plan. It had been tried and failed before under Jacques Nasser. Mulally helped enforce and expand that plan, adding some of his own markings to it. The most notable for me was sizing production to the market. Ford, like the rest of the American manufacturers, previously emphasized keeping the assembly plants humming at full capacity and discounting anything that had difficulty selling. That ended with Alan and shortly thereafter Ford returned to profitability and the financial crisis abated. Had we not done that (reduced manufacturing capacity) there is no doubt in my mind that Ford would have been holding out its hand for government assistance as well.

In Mark Fields moment in the sun today he too emphasized the great culture of Ford and how he was "personally committed to maintaining and nuturing" the One Ford plan. He spoke of second, third, and fourth generation Ford employees and dealers. That probably comes across as corny, but, as a third generation myself, it resonated with me. He also talked about Ford employees contributing to their communities not out of obligation, but because it was the right thing to do.

Bill Ford called Mulally's commitment to a smooth transition "his last and finest act." I'm not sure I agree with that, but Ford also noted that it's nearly unprecendented at Ford and in the auto industry in general to have engineered a great transition plan. Historically these CEO changes have been driven by crisis rather than by design. He and Mulally have been discussing it since the day he arrived in 2006, and Alan doesn't strike me as someone who makes a commitment that isn't met.

http://www.multimedia.ford.com/webcasts/fcn/hq/index.html

Doug
SA Home Fool & F ticker guide 

3 Comments – Post Your Own

#1) On May 02, 2014 at 2:14 PM, awallejr (81.13) wrote:

The winter beat up my car.  While in the shop I wound up renting a Ford Fusion.  Aside from lousey pick-up the car was surpringly nice.

Report this comment
#2) On May 02, 2014 at 2:14 PM, awallejr (81.13) wrote:

The winter beat up my car.  While in the shop I wound up renting a Ford Fusion.  Aside from lousey pick-up the car was surpringly nice.

Report this comment
#3) On May 02, 2014 at 3:46 PM, Goofyhoofy (< 20) wrote:

 there is no doubt in my mind that Ford would have been holding out its hand for government assistance as well.

Ford took $5.9 billion in government loans in 2009.

It’s been three years since General Motors and Chrysler filed for bankruptcy, but with the political season in full swing, the two presidential candidates have put the auto industry bailouts back in the public eye, at least through the November election. Yet there’s only one Detroit automaker still in hock to U.S. taxpayers and – guess what? – it’s not GM or Chrysler. Ford Motor owes the government $5.9 billion it borrowed in June 2009, the same month GM filed for bankruptcy. 

http://www.forbes.com/sites/joannmuller/2012/08/29/automakers-report-card-who-still-owes-taxpayers-money-the-answer-might-surprise-you/ 

Report this comment

Featured Broker Partners


Advertisement