Ford CEO Mulally to stay on through 2014

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By Paul A. Eisenstein
Ford CEO Alan MulallySTAN HONDA / AFP - Getty Images

Ford Motor Co. has come a step closer to resolving two of the most frequently heard questions in the automotive industry, but it has not given a complete answer as to when CEO Alan Mulally will step down – and who will succeed him.

But a strong clue emerged Thursday morning with news that Mark Fields, currently Ford’s President of the Americas, will become the maker’s new Chief Operating Officer, a position all but certain to ensure he eventually moves up upon Mulally’s retirement. But the 67-year-old CEO, clearly in no rush to leave, will pare back his day-to-day role but continue as Ford’s chief strategist and internal cheerleader.

“At least thru 2014. Whatever happens, Alan is here two more years. And we could go longer” Ford Chairman Bill Ford clarified when asked how long Mulally would stay. “Obviously, I love Alan. I’ve never enjoyed working with anyone so much (and) I’d like him to stay forever. But part of the manifestation of a great CEO is developing a great team.” 

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So, from a day-to-day management perspective, the man in charge will now be 51-year-old Mark Fields, the Jersey Boy who many – including Mulally -- credit with creating the “great elements” of a turnaround plan which helped Ford avoid bankruptcy, unlike its cross-town rivals General Motors and Chrysler.

Both Mulally and Fields heaped praise on the new chief operating office, noting the strong performance of Fields’ operations as revealed in the maker’s third-quarter earnings report.  Despite increasing losses in Europe, the company’s net earnings were essentially flat, at $1.6 billion, largely due to the whopping 12% margins in North America – among the industry’s highest and the best at Ford since 2000. 

One of Fields’ most important duties will be overseeing the company’s weekly Thursday morning meetings in which literally every key aspect of the business is discussed.  It was through those meetings that Mulally, in 2006 a new recruit from Boeing, first outlined his One Ford plan to consolidate the company’s regional network into a truly global automotive powerhouse.  

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It was also there that Mulally got a clear understanding of the challenges in a company that was historically famous for what Bill Ford recalls as its personal “empire-building and backbiting.” In his first Thursday session, Mulally asked Ford’s management team how everything was going.  “Fine,” came the answer from all attending. “If so,” Mulally shot back, “how come I’m about to report losses of tens of billions of dollars?”

At the next meeting, Fields broke tradition, raising his hand to admit his operations had problems and ask for help. In the past it might’ve been a career-ending move to admit a failure. Instead, it wound up helping cement his future.

“The growth we’ve seen in (Fields) over the last six years has been tremendous,” said Mulally, during a conference call.

Thursday’s announcement also revealed a number of other key personnel changes.

The 45-year-old Joe Hinrichs, seen as a long-shot alternative to Fields, will replace his colleague as President of the Americas. Hinrichs had been running Ford’s crucial and fast-growing Asia Pacific Africa region – which includes booming China – since 2009. 

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Stephen Odell, a senior executive in Europe was  named executive vice president and president of Europe, Middle East and Africa. Odell was until now serving as president, chairman and CEO of Ford of Europe. The British-born executive had overseen the sale of Ford’s former Volvo subsidiary and also served a stint in Japan with Mazda’s former affiliate, Mazda Motor Co. The 57-year-old Odell just last week revealed an extensive turnaround plan for Europe including three plant closures.

Jim Farley, a one-time Toyota star who came to Ford in late 2007, has been global chief of sales, service and marketing, in line with the One Ford strategy. He now adds the role of senior global leader of Lincoln, Ford’s long-troubled luxury brand. Until recently, Lincoln was limited to a presence in the U.S. and a few other markets.  It will soon launch in China and eventually roll out worldwide.

Replacing Hinrichs as chief of Asia Pacific operations will be David Schoch, 61, currently the man running the maker’s fast-growing Chinese ventures. African operations will now become realigned with Europe, under Odell.

The final top management shift sees 46-year-old John Lawlor become the chairman of Ford Motor China.

Several observers said they were pleased to see Ford able to keep senior managers such as Hinrichs, Odell and Farley, the latter in particular considered by some likely to jump companies if Fields won the top spot in a bid to move himself up the ladder. For their part, CEO Mulally and Chairman Ford expressed their pleasure in keeping the team together.

While it’s not uncommon for top executives to remain on the payroll in a limited role as they reach retirement age – as happened when GM Vice Chairman Bob Lutz was named a “consultant” for a brief period – Mulally clearly will retain a strong role in Ford going forward.  But it will be more strategic than before, something that may be crucial to continue the corporate culture change essential to the success of his One Ford program.

The goal is a company that “can pivot,” if necessary, overnight to react to the ever-faster changes of the modern world, said Bill Ford, great-grandson of the automaker’s founder, Henry Ford. “I’m hoping alan’s lasting legacy is that we react through the lens of reality and clarity,” he added, then cautioned it won’t be time to write Mulally’s legacy for a couple more years.

For his part, the still surprisingly boyish Mulally said he’ll continue to serve at the pleasure of his boss. “My contract is a very firm handshake with the chairman and always has been.”