By on September 5, 2006

mulally_n.jpgWas he pushed or did he jump? Either way, Billy Ford’s resignation as CEO of the family firm is yet more proof that The Blue Oval’s in big trouble. Not that he’s been trying to hide the fact. In his Newsweek interview, Billy telegraphed his intention to fall on his sword: “I've always said that titles are not important to me… What's important is getting this company headed in the right direction." And the new man is… Alan Mulally, Boeing’s now former Executive Vice President. Not to coin a phrase, one wonders if Billy told the board, “If it’s not Boeing, I’m not going.”

Billy’s press release hails FoMoCo’s new President and CEO and explains the choice: “Alan has deep experience in customer satisfaction, manufacturing, supplier relations and labor relations, all of which have applications to the challenges of Ford. He also has the personality and team-building skills that will help guide our Company in the right direction.” The aeronautical and astronautical engineer joined Boeing straight out of college in '69. Mulally's “customer experience” is limited to convincing airlines to buy jets. Not to put too fine a point on it, the Kansas native sure ain’t no car guy.

Still, point taken on the manufacturing and labor relations side of things. An assembly line is an assembly line, whether you're building lumbering behemoths that can or can not fly. And a good chunk of Mulally’s Boeing career was spent investigating jet crashes caused by weather– a situation not a million miles away from the effect of gas prices on Ford’s SUV business. And he’s certainly familiar with Ford-sized executive salaries. Forbes reports that Mulally drew down $9,961,985 last year, with $6,362,599 in stock options taxiing for takeoff.

One of the main reasons Billy Ford likes Mulally is that Mulally likes Ford. In his book “Working Together,” author James P. Lewis chronicled Mulally’s success at Boeing, from the depths of post-911 to the launch of the new 787. Lewis reports that Mulally was inspired by Ford’s last turnaround, starring… the Ford Taurus. In their statements to the press, both Billy and Alan referred to this appointment as karmic payback: “Just as I thought it was appropriate to apply lessons learned from Ford to Boeing,” Mulally said. “I believe the reverse is true as well.”

In case you were wondering how Mulally pulled Boeing out its nosedive to earn himself the top slot at America’s number three automaker, it’s all about the product, stupid. Despite the post-911 crash in airplane sales, Mulally’s team pushed forward on streamlining the company’s Byzantine production process and developing new planes. When the market eventually bounced back, Boeing was ready. You could argue that a rising tide lifts all Executive Veeps, and what else could Boeing have done anyway, but there’s no doubt that Mulally helped the Seattle-based company make better, faster and cheaper jets.

There’s also no question about Mulally’s leadership abilities. His “team-building skills” within and without Boeing are legendary. In a March ’06 article for Design News, Boeing’s Chief Engineer of the 777's interior design sang Mulally’s praises. "Alan exhibits every quality that you would want to see in a good leader–vision, trust, integrity, and, above all, an overwhelming enthusiasm.” George Brody also said, “He's just dynamic when it comes to getting people to pull together." Of course, a big part of Mulally’s confidence comes from his technical know-how. One wonders how long it will take Ford’s new CEO to get up to speed on the intricacies of car building.

Or if Mulally can readjust his internal clock to the car industry’s three year product cycles. For 37 years, the Boeing man was attuned to a two decade gap between a new product’s conception and customer deliveries. (You can count the number of planes he’s worked on with one hand.) And that’s on top of strategic thinking that extends out 40 years or more (a modern aircraft can stay in service 60 years). Ford has eight brands and dozens of models, each of which require some form of design, engineering and marketing right now– in addition to the models on the drawing boards or in development.

Again, Mulally ain’t no car guy. In fact, his appointment is reminiscent of John Sculley’s ascension to the top post at Apple Computer. The Pepsi Prez was also a hugely successful, gregarious outsider charged with turning around a failing multinational with a deeply entrenched corporate culture, that enjoyed tremendous customer loyalty. Sculley was also overseen by the same man who used to run the joint. Suffice it to say, Sculley’s tenure did nothing to help Apple, and plenty to hurt it. It remains to be seen if Mulally can win friends and influence people who are already clinging to their jobs by the skin of their teeth.

Mulally’s first test will be overseeing the deal or no deal happening or not happening at Aston, Land Rover and Jaguar. And then, it’s union time. Then we’ll see if Mullaly’s got what it takes to pull the yoke and save Ford from a death spiral into Chapter 11.

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75 Comments on “Ford Death Watch 5: Can Mulally Get Ford to Straighten Up and Fly Right?...”


  • avatar

    My first thought was also, “That’s no car guy.”

    I don’t know the daily details of Ford operations, but doesn’t Ford’s problems mostly boil down to product? Way Forward and Bold Moves (from my naive vantage point anyway) at least bandaged many of Ford’s business problems. Doesn’t the company now need to focus on getting hot product into the hands of clamoring customers?

    Mulally looks to be an accomplished engineer and more than competent businessman. He’s smart. He also had to have been charming and savvy to stay at Boeing that long. Let’s hope he knows enough about customers to give them what they need and want.

    But I also hope he has the wisdom to keep the accountants and engineers out of the styling department.

    As an Apple zealot and lifetime Mac user, the Scully parallel is scary indeed. Those were dark, dark days in Cupertino.

    As for Bill Ford, well, it takes balls to admit you can’t do a job. He’s earned a little more respect from me because of it.

  • avatar
    Jonny Lieberman

    Yeah, but the first thing Maximum Bob “The Car Guy” Lutz did was bring over the GTO….

  • avatar
    GodBlessTTAC

    didn’t bill ford not really want the job to begin with?

  • avatar
    Steve-O

    The way I see it, this is very good news.

    First, the positive: Regarding his experience, I like the fact that Mulally’s background is as an Engineer. I always thought the engineering experience was too often absent at the top of the domestic “2.5”. Plus, his experience with labor relations will hopefully help in the 2007 UAW negotiations…

    Also, if he modeled the Boeing turnaround after Ford’s Taurus-driven turnaround in the mid-80’s, then hopefully he understands that the Taurus story was about compelling STYLE in addition to innovation.

    Concerns: Coming from the aeronautical industry doesn’t necessarily mean he has the passion for cars that I believe the CEO of an automobile company needs…

  • avatar
    FunkyD

    Yeah, but the first thing Maximum Bob “The Car Guy” Lutz did was bring over the GTO….

    Yeah, and that was one thing he did right!

    On the surface, this seems to be a Bold Move ™. However, as Henry II demonstrated to Mr. Iacocca (who also had an Engineering background), you still rule the roost as long as your name is on the building. The success or failure of this strategy hinges on whether Bill can keep his ego checked at the door. He says he can, and has walked the walk so far, but he’ll have to do a marathon’s worth of walking. If Bill is serious, then it just might work.

    The one problem with the Scully parallel is that Scully wasn’t a product guy, as Mr. Mulally appears to be. Hopefully, this will be a sign of courage rather than desperation.

  • avatar
    Jonny Lieberman

    Funky — he did it half-right.

    A great vehicle destroyed by it’s own lack of looks and it did nothing to turn Pontiac around.

  • avatar
    jerry weber

    No outside ceo comes alone to the party. To run a large corporation you need a team loyal and in sync with you from the get go. I wonder how many Boeing underlings will follow Mulally to Ford? It will simply take too long to mesh with and cut loose those you don’t fit in with at Ford, unless you have your own team. As for Bill Ford, he looks like he couldn’t wait to get out of a place that has mostly bad news swirling about him from the day he took over. No this is not the Ford of Henry the Deuce or Lee Iacoocca, and others, this is a wounded giant. Ford had another near death experience after WWll, when Henry the second brought the whizz kids (McNamarra et al) to Ford. The company had been brutalized by a senile Henry the First and had not ever gotten back the lead it had with the T in the twenties. But Ford only had GM and Chrysler to battle to get back in the 40’s and 50’s, now it’s a zoo out there. The first recovery came at Chrysler’s expense (they were then reeling from sclerotic postWWll management) This time I don’t know who will be easy pickings, all the players see tough and will certainly fight to keep any turf they won from Ford in the last several years.I don’t think ford or GM can ever dominate as they once did, but they might survive in some scaled down form. We will get to see this as change is now going to happen a lot more swiftly at ford than ever in recent memory.

  • avatar
    rtz

    Billy saw the ship was starting to sink and jumped. He can’t be blamed if he’s not around when it finally goes down(“I wasn’t there when it happened..”). It’s easy to blame it on the new guy(Alan Mulally).

  • avatar
    mikey

    It will be interesting to watch if Alan Mulally can turn it around,Bill Ford will be considered a genius.

  • avatar
    rtz

    If I was at Ford and had any power, I’d have to either shut down all the union plants, or cut the pay to ~$7/hr. I’d sell off those ex British brands either back to England or to China. Ford’s car and truck line up though… Ouch. Slim pickin’s. Have to bring down all the prices so they are so uber competitive, no one in their right mind would buy some other brand that had a similar model that costs more money. Make all the vehicles be able to use E85. Offer a diesel engine in all the vehicles. Offer a hybrid version of all vehicles. Offer 2 different gas motors in all the vehicles with two different purposes. Either extreme mileage, or extreme performance. Forget about all this average, middle of the road 20 and 30mpg no performance anywhere stuff. 40+mpg for the efficiency motor. Wicked fast for the performance motor. Make one version of the Focus get 40+ mpg. Put a turbo charged motor in the other version that would dust nearly any car. Wicked little speed demon is what it needs to be. Right now; it’s nothing. The same goes for the Fusion. It’s just average, middle of the road. An inline four and a V6. About the same mileage and power from both of them. Why bother? 40+mpg from one and a absolute terror and screamer for the other. Which one do you want? If you build something that either doesn’t get better gas mileage or performance then a Honda or Toyota; don’t even sell it until it does cause we don’t want none of that!

  • avatar
    qfrog

    First thing that comes to my mind is that ford has a LOT more individual customers than Boeing ever did or ever will. I’d wager that ford has more customers this past month than Boeing has had yet. Its not like you are building a few intimate relationships with “customers”. Mullay’s customer satisfaction experience might not be so immediately applicable to his new found customer base. Ford sold how many of those F150s last year now? Boeing has sold how many aircraft this past century?

  • avatar
    darian

    hmmmm.

    ford death watch begins, stock in the mid 6 dollar range.

    i buy a whle bunch of their stock.

    episode 5, bill f resigns, stock hits close to 9 bucks in afterhours trading.

    i have been in for a while, so keep it coming. i look forward to episode 78 funding my daughters college education.

    the company may be screwed, but the stock will keep going for a while.

  • avatar
    mikey

    rtz 7.00 an hour to work on the line?Better yet 12hr days,no breaks if we have to, chain the workers to the line,and give all the supervisers whips.You were born about 100 yrs too late dude.

  • avatar
    rtz

    Guys south of the border could work that line. It ain’t rocket science.

  • avatar
    rjsasko

    By bringing in an outsider Billy Boy can have the decisions he and the Board already made get implemented. Jag/LandRover/AstonMartin sold, folded or given away. Volvo sold to highest bidder-need the cash. Same with Mazda and whatever else Ford has aquired in the last thirty years. Lincoln-Mercury dealers told point blank that they are now Lincoln dealers and the development dollars that were normally split between the two makes will now be devoted completely to Lincoln. In other words “don’t grumble-you’re far better off”. Ford needs to raise lots of cash and seriously beef up their product pipeline and GM has a couple of years head start on them. In the mean time they can grab their European stampings and use them here to jump start their line-up.

  • avatar
    DaveClark

    It’s a smart, bold move. God knows that the practice of promoting from within wasn’t working. Alan is a product guy, which is JOB #1. Alan drives a Lexus, so he knows the quality of the competitlion, unlike GM dunderheads who won’t even let employees park non-GM vehicles near GM facilities.

    It’s a breath of fresh air; I only hope he fulfulls more of the potential we expected from Lutz at GM –a HUGE disappointment (no, the GTO ISN’T a great move).

    Whether Mark Fields and Alan can work harmoniously toward the production of hot product is the billion dollar question.

    A quick tip for Alan: Hire some new focus groups to evaluate new cars and trucks, like TTAC members!

  • avatar
    mikey

    I`m not gonna justify that statement with an answer.I`m confident the new man at FORD has lots of history dealing with a union.If he can turn FORD around he is gonna need lots of help from the union.But right now I`ll bet he has more pressing issues.

  • avatar

    I’m betting this guy turns it around. After reading the article and considering the state of the domestic 2.5, Ford seems to be the only one seeking real change and willing to take big steps to get there. This could get interesting, depending entirely on how good this guy really is and how serious Ford is about improving product.

  • avatar
    GS650G

    I applaud Ford for making this bold move. I think the family has held the reins too long, the Boing man might be able to bring more talent to the company. One look at their vehicle offerings and you know they need help.

    A Lincoln Pickup truck? A Shelby Mustang so exclusive you can’t even order one ( my friend tried and failed to secure one)? A lincoln Zepher that is nothing more than a fancy Fusion for 10 grand more? One hybrid and it’s an SUV? No challenge to the Dodge Sprinter work truck when they have models in Europe to sell here? Ford Mondeos wrapped up as a Jag?

    Mazdas are the only real successful lines Ford has absorbed and could possibly save them. How about a real Mazda truck, not a rebadged Ford Ranger?

    The need to force a strike with the UAW rather than wait for GM to run their course. Ford could survive on their product lines not affected by the UAW until a retrenchment takes place. They don’t have the cash GM does and it’s doubtful that they can sell off enough assets to cover them. He who declares bankruptcy first wins because they get to break their contracts. As shitty as it sounds, this is the only way there will be a FoMoCo.

    I’ll be in the market for a car late next year. I hope a Ford is in my future but at this point I am leaning Toyota, Hyundai, or Nissan.

  • avatar
    JSForbes

    Good move. Now they just need to axe all the guys under him, then maybe, just maybe, Ford will be getting somewhere.

  • avatar
    pb35

    Ford: Born from jets?

    Nah…

  • avatar
    GS650G

    I applaud Billy for getting out of the way. Now if the rest of the board can be persuaded to do or die then they would get somewhere. They need to change the car lineup and quit rebadging so much. They have one stinking hybrid and it’s a SUV. Lincoln pickup trucks?Get real.

    The unions are going to be a bitch. No doubt about it.

    Mazdas are pretty popular cars, and they don’t look or feel like Fords. maybe that is the ticket. Mazda should build it’s own truck, not rebadge a Ford Ranger. There is that rebadging thing again.

    Sell Volvos as Volvos, not rebadged 500’s.

    Actually build and sell GT500 mustangs, not dangle them like collector cars that can’t be bought. Sell the damn things to the speed freaks who could care less about grocery capacity, gas mileage or insurance costs. People like TTAC readers. And oh yeah, shove a V-10 into it. If he knows airplanes then he should be able to figure out how to make a V-10 mustang.

  • avatar
    PandaBear

    Engineering background will help, at least better than accounting and law background, when dealing with product related problems in the big 2.5.

    The last thing the big 2.5 need is someone from another big 2.5, or someone from a foreign car company (to avoid rejection from those “patriots” and union workers), if this guy can convince people work on the priority (good product and make the manufacturing less labor intensive, thus reduce reliance on the union) then Ford will have a chance.

    What I am worried about is the momentum of the dead wood in a company t his big, both at the exec and the union level.

  • avatar
    Jonny Lieberman

    GS650G:

    Ironically, I was watching US Marshalls last night and they very end Tommy Lee’s crew pulls away from the courthouse in an E-Series Triton V-10.

    And I immediately thought to myself, “Why didn’t ford ever stick that in a sports car?”

    Anyone?

    Saw and sat in the new Ford Edge today…. Mulally has a full docket ahead of him.

  • avatar
    SKT

    Looks like the “Way Forward” plan is looking “Way Backward” right about now. If there was a time in Ford’s history where they really needed a “Car” guy, this would be it. Mulally will have a rude awakening in the automotive sector and all his experience garnered at Boeing isn’t going to help Ford build the Cars and Trucks they need to save itself from ruin.

    Selling/Marketing Airplanes is NOT anywhere near like selling/marketing Automobiles circa 2006 and beyond. Whatever cost cutting slashes Mulally is going to make isn’t going to guarantee Ford’s success – as Wolfgang Bernhard once said, “…you can’t cost cut your way to prosperity.”

    Mulally hasn’t shown any prowess in having to compete in a business sector as volatile and topsy-turvy as today’s automotive industry. There are literally hundreds of nameplates out there all competing for an ever decreasing share of the pie. What Ford needs right now is an Automotive Leader not an Aeronautical one.

    Clay Ford et el have completely lost the plot, and Mulally’s recent appointment proves just that.

    This is about automotive leadership, now more so than ever. Mulally just doesn’t fit and I just don’t buy his shtick. He may have modeled Boeing’s turn around after Ford’s Taurus however, the Taurus is now no more and the stakes have changed considerably.

    Mulally could have bowed out gracefully from Boeing at the age of 65 and deploy the hundreds of golden parachutes he’s accumulated during his tenure there however, now he’s going to put his reputation at risk, start from scratch and learn thetruthaboutcars the hard way.

    Mulally thought Airbus was tough to deal with, wait until he has to deal with the likes of Toyota – Mulally will soon find out that keeping his seat upright and in the locked position ain’t going to do squat – the barf bag may come in handy though…

    Today’s in-flight movie: Airport ’77. Enjoy your flight with Air Ford.

    Over and out,
    SKT

  • avatar

    The main thing these companies need is someone who knows how to build a team that works together to get the best out of everyone. Sound simple? It’s the hardest thing in business. If this guy can do that, it’ll work. If he can’t, it won’t.

    It’s probably better if the guy at the top doesn’t know cars, as long as he doesn’t feel he has to pretend to know cars. Someone who recognizes that the people working for him are the experts will do much better at building a real team.

    I don’t care how well Bob Lutz knows cars and TODAY’S car buyers (probably not all that well in many cases). He might know everything there is to know about them. One guy cannot make all the calls with a huge product line. Way too many decisions, many of which shouldn’t be made based on a Powerpoint presentation. Someone like Mullaly, who doesn’t have to live up to a car guy rep, might be more willing to find the right people to run product products, and then actually let them run the programs.

    RF brings up Sculley at Apple. How about Louis Gerstner at IBM? He didn’t know diddly about computers when he took over as CEO of an ailing IBM. and they did how well?

  • avatar

    Jonny,

    They wouldn’t stick that engine in a sports car because the market for Dodge Vipers isn’t very large, and someone else already caters to that market. As is it wouldn’t be suitable, peak power is just a bit over 300 if memory serves. Doesn’t quite justify a huge gas guzzler tax.

  • avatar
    Jonny Lieberman

    Mr. Karesh,

    Sure, made out of iron. But mold it from aluminum and add some fancy parts… would make more sense than a super-charger in both the Mustang and the GT.

    Says me.

  • avatar

    It’s only 1.4 liters larger than the V8. So a supercharger has more potential. Also, the supercharged V8 in the last Mustang earned nearly the same fuel economy ratings as the base GT engine (still got $1,000 GGT). V10 would have been much thirstier.

    Finally, as someone forgot to tell Chrysler, 90-degree V10s don’t sound very good.

  • avatar
    Sajeev Mehta

    If Mulally understood the shift in corporate culture needed to make the original Taurus, this guy’s got potential. You don’t have to be a car guy to “get it.” Maybe send him off to Bondurant like Donald Peterson in the 1980s, it might work.

    FWIW, the Triton V-10 is a pooch of a motor, light on hp and doesn’t like to rev. Unless Ford spends the money for a real head/cam/intake kit (don’t hold your breath), the boosted 5.4L V8 is a much better alternative.

  • avatar

    Maybe they’ve watched (and believed) too many Saab commercials.

  • avatar

    TampaWRX, I agree. Even if Mulally can’t totally reform Ford, it’s refreshing to see one of the 2.5 making a REAL effort to improve. My family was always anti-Ford, pro-Chevy, but I’m pulling for the Blue-Oval guys to pull it off. I’d truly love to see it become a great company making great products again.

    Joe Lieberman, are you saying the Edge isn’t a great car? If so, that’s very disappointing. A recent DetNews article on the Edge (http://tinyurl.com/fhyfb) got my hopes up. I was hoping to be so wowed by it I would completely forget about the 2007 CRV. So please tell me I misunderstood your comment.

    Oh, and pb35, funny. Maybe when Ghosn moves over to GM he can use that line to sell some Saabs. Oh wait.

  • avatar
    Jonny Lieberman

    Don’t call me Joe Lieberman, ever.

    Jonny, please. He’s not even related.

    Again, I just sat in the thing for a second and walked around it a few times.

    Not so impressed, but I’m on the list to get one for a week, so we’ll see.

    I had convinced myself that I would hate the Freestyle after ten minutes with it, but after a few miles I was smitten and I now recommend it to everyone I know with children.

  • avatar

    Main selling point vs. the CR-V will be the engine. Still no V6 in the Honda. And possibly handling.

    I’ve read that the back seat is too low for adult comfort in the Edge. The CR-V does well in this area.

    I’m also a big fan of the Freestyle. The versatility of the interior and usable third row combined with modest vehicle width wins me over.

  • avatar
    Jonny Lieberman

    But see, with the Expiditions launching, Ford is just letting the Freestyle wither and die on the vine.

    It really is a tremendous vehicle. And Ford is doing nothing with it.

  • avatar

    Oh, crap. Sorry, Jonny. I’ll not make that mistake again.

    Looking forward to the Edge review.

    And your run for president in 2008.

    =)

  • avatar
    James2

    Last year I read somewhere (Motor Trend?) that Ford built a DOHC 5.8-litre V-10 (clearly not the Triton motor) and stuffed it into a last-gen Mustang. As expected it went like stink. Idea probably got killed by the same, know-nothing bastards who proceeded to gut every last one of Ford’s products.

    Memo to Mr. Mullaly: that’s the kind of thinking that got Ford into today’s mess. Get rid of people who DON’T want to build the best possible Fords. I’m sure there was a terrific-looking Five Hundred drawn up by some junior designer… but the design got vetoed by someone (J Mays?). Fire that someone and promote the junior designer.

    It looks conventional, but the 787 is fairly revolutionary (composite airframe, electric systems, etc.) and Ford needs, if not a specific product, the same kind of break-the-mold thinking.

  • avatar
    Terry Parkhurst

    From what little I have gathered about Alan Mulally from living in what used to be so Boeing-centric a city, it was called the “Jet City,” he is “an engineer’s engineer” according to his associates who were quoted in an article in the Seattle Times in 2001. Some engineers are what you might call “car guys,” even if they were educated as civil or structual engineers.
    Back when I was a student at the Art Center College of Design, a structual engineer who taught a really basic course called “structures” worked for Craig Elwood, an architect who had morphed into that area from taking classes in structural design (while never actually getting a degree, as I recall). Elwood was known for exposing the truss system of houses, celebrating what many others wanted to cover with cladding. His personal car, so we were told, was a Lamborghini Miura. That’s the type of guy Ford could use.
    In the old days, a guy such as Craig Elwood might have been called “an artist with a sliderule,” way back when that’s how you did equations. (Those who don’t know what a sliderule was, do a Google search; and yes, it did outlast the buggy whip. ) They were cross-disciplinary types.
    My impression of Mr. Mulally is he is more akin to the title character in “Dilbert” in that he is basically a good sort but looks at the world as a series of equations that need to be solved with efficiency and speed. Are extra employees bringing us down? Well, let’s get them their pink slips ASAP!
    Did the Taurus turn Ford around in the mid-Eighties? Well, let’s figure out a way to build a good, inexpensive sedan for today. How about we copy a European car but do it a bit better? (Back in mid-1980s, many auto journos thought the Taurus was basically a rip-off of the Audi 5000 and some other decent European front-wheel drive cars.)
    As to why Ford never put the Triton V10 in a sports car, well Jonny my hunch is it didn’t fit in with the retro body they wanted to reintroduce (and did) as the Ford GT. Personally, I would encourage you not to hold your breath waiting for this “new guy” to do anything so imaginative or bold. He’s a solid company man and methinks Ford might have made a fatal mistake in bringing him on. But then again, I could be wrong. For the sake of so many Ford employees who won’t be among those laid off in the near future, let’s hope so. But then, everything runs its course. Ford was the epitome of a modern American company, shortly after the start of the last century. It could happen again. Why do I say that? Because life is full of surprises, good and bad.

  • avatar
    SKT

    Mr. Karesh,

    Some interesting points however, I believe that one knowledgeable car guy can make the calls with a huge product line – that’s what justifies the big salary. Is it wise to do so? Maybe, maybe not; however, the person in charge has to be able to make that kind of decision if need be – it’s called leadership.

    And yes, Louis Gerstner at IBM may have known diddly about computers however, computers haven’t been around as long as the automobile and the average everyday person doesn’t spend $25K on a computer – cars yes, computers no.

    Today’s automotive guru has to be a true passionate car person that understands the positioning of the automobile in the hearts and minds of the consumer – today, tomorrow and into the future.

    Cars are immortalized in film, books and music – computers, toothpaste, produce and credit cards are not.

    Can Mulally do a good job? Sure he can, if all he has to do is slash and burn – but is that going to provide the necessary leadership and means necessary to change the course of Ford 2010 and beyond?

    Any smart/educated/experienced MBA’er can slash and burn however, not just anyone can lead an Automotive OEM (like a Ford) from the brink of disaster. There probably isn’t one analyst in Ford right now that could justify making Lincoln the premiere luxury car in the world – the numbers don’t exist, they haven’t existed for decades – the answers for such scenarios will not be found in the numbers.

    However, if one knew about cars, they’d say that Lincoln is the easiest division to change, the easiest to bring back to its former glory – but that won’t happen and it hasn’t happened because the numbers don’t exist for them to justify it happening, unless you have a person in a position like Mulally to make that call to make it happen despite the lack of data.

    Many from outside the car industry have tried to tame the Automotive Beast and the majority has failed miserably. Commodifying cars in the same manner as toothpaste, cookies, credit cards et el may work here and there however, in the long run more damage is done than good.

    Pushing tin is one thing, but pushing Detroit Iron is something all together different – that’s just thetruthaboutcars.

  • avatar
    kablamo

    No one knows if Mullaly is up to the challenge (which in fact, no one may be!), but there is no doubt Ford needs someone from the outside as a breath of fresh air. Despite all the criticism, I think this is probably one of the best choices for CEO that could be made. That doesn’t mean it’s the end of the deathwatches though.

  • avatar
    WV14

    Is it the right decision or a decision to remove blame from the Ford family when it does go pear shaped? who knows but what they need is new product now which they don’t have.
    Boeing runs on heavy subsidies from the government, is this going to be a plan to try and get bailed out by the government at some point? With the competition from airbus with their A380 and other projects has Mullaly done a Bill Ford and jumped? or was he pushed? Could it be out of the frying pan and into the fire?
    Sounds like more spin, slash and burn coming from Ford.

    As for Mr. Liebermans remarks on the freestyle, i was unlucky enough to have one for a week, the styling is way out of date, the interior poor quality and the looks you receive driving that thing are embarassing. Maybe its time to change the head of design too while they’re about things.

  • avatar
    Claude Dickson

    There are a couple of problems with this appointment.

    1) The biggest problem is that he is not a “car guy” as far as we know and Ford is in trouble. There will not be any time to get up to speed. This appointment makes the most sense if the Board has figured out what needs to be done and need someone capable of implementing it.

    2) The second problem is that I’ve worked for a large bureaucratic company and putting one guy at the top is not enough to change the ways of entrenched middle/upper management. Enough of them will need to be replaced to convince the rest that times have changed. But a Boeing exec isn’t going to have people from his former company who can fit into these slots.

    3) The third problem is perhaps the most troubling. This guy may know about union negotiations, and production processes BUT this industry is basically about building a product people want to buy at a price people are willing to pay. A good union contract and more efficient production facilities isn’t going to change the fact that Ford doesn’t make enough cars that people want to buy. It’s a simple concept that auto industry execs fail to get time and again. Granted, making cars people want to buy is easier said than done, but you have to know what you need to be trying to do. A better cost structure, by itself, isn’t going to save Ford any more than it will save GM.

  • avatar
    deVeritas

    I’m not sure I buy the whole “he’s not a car guy” argument.

    First, show me a car guy that doesn’t admire a jet airplane; modern fighter or airliner either for the complexity or the power. Nothing says ‘muscle’ quite like 174,000 lbs of thrust from a 747, or ‘performance’ like an F-15. Also, show me an engineer that doesn’t love cars in some way.

    Second, if he’s really not a bean counter, then contractors such as Boeing are notorious for being over budget. However being over budget is usually due to quality control concerns. They make sure they have a high quality product that does what it needs to do no matter what, even if the customer changes scope. Niether military nor civilian applications have much room for error tolerance. Boeing deals with both.

    In fact, the only thing I would worry about is that Alan goes in thinking car building is too easy. Per vehicle, maybe it is – only 2 axis to worry about. However spending months QC’ing a plane has a different scope than QC’ing a Focus. But if Ford could make a product with an average life span of decades, not deca-months, no one would argue that’s a bad thing. Also, to me aircraft are the perfect beautiful design where form follows function due to physics. We’ll see if Alan can help create a great design when function and physics are less of a consideration.

  • avatar
    The Flexible Despot

    Gentlemen,

    I don’t know what exactly the definition of this term “car guy” is, or where you go to get some certificate saying you are one. The assertion that Mr. Mulally is not one, however, seems to be a bone sticking in the throat of many posters here. Although I am not an automotive engineer, I do enjoy driving and learning about cars. I wouldn’t be reading this website if I had no interest. Perhaps Mr. Mulally is the same.

    Here’s a quote, pasted from a story in a Detroit newspaper:

    It does seem like he is a candid man. He drives a Lexus LS430. “The reason I have a Lexus,” Mulally told me in an interview after Tuesday’s news conference, “is that it’s the finest car in the world. I studied all the cars.

    And this is also the reason why I’m here (at Ford), because Boeing makes the finest commercial airplanes in the world, and what was compelling to me was that Bill Ford, when he called me, Bill wanted to focus on making the best auto company in the world …The reason he called was not to restructure, not to get rid of stuff, not to sell it off. He called because he wanted to make the finest automobiles in the world. And that’s why I’m here,” Mulally continued. “Because I think the U.S. can compete. I know they can compete. … There’s no reason why we can’t be the best in the world.”

    Source: http://www.freep.com/apps/pbcs.dll/article?AID=/20060906/BUSINESS01/609060459

    Clearly he believes that Lexus just makes better cars than what Ford is offering. The problem with Ford is the product. I agree. “Car guy” or just plain guy who likes to drive and knows a good automobile when he sees one? Who knows? At least he knows what the competition is pushing.

  • avatar
    jerry weber

    A second take on Ford. Bill Ford had six years at the reins and they have mostly been bad. Would you or I have been left go that long if our name wasnt ford? We don’t know if Alan is the man but Bill was not; as to a team, you must know that Alan will have to rearrange all of the deck chairs on the titanic to get the changes he needs. He will do this with job changes and a small army of ex boeing underlings that all top guns bring with them when they move. We don’t know the results yet, but I gaurenttee that no one other than Bill Ford at Ford should feel safe in the near future at their present positions. Alan will need to create instability in order to bust up the fifedoms and other ingrained stuff at Ford as it is at all large corporate entities. They grow like moss on the wall. These are the type that want nothing to go wrong or change before they retire or get a new assignment. To the extent he can find these people, replace them with results oriented people, will tell us if his tenure will be long and successful at Ford. I wish him well.

  • avatar
    tincanman99

    Ford might as well write out their obituary right now. Aerospace and the car industry have nothing in common other than the fact they are both involve manufacturing.

    I worked at a certain large telecom company that at one point had America’s preeminet research facility. Well they brought in an outsider from the computer industry to turn the company around. Well to put it bluntly he ran the company INTO THE GROUND and than parachuted out with a golden parachute. Sculley did the same thing at Apple. Why do these executives all think that a company is a company whether you are seling cars or a mac?

    Boeing is not all that. Boeing has been living off the largess of the American taxpayer for DECADES. They might as well have a logo that says “Goverment Contracts R’ Us”. Boeing has no concept of competing. Why doesnt everybody go read up what Boeing has done in the last few years

    – like abandoning Seattle after being headquarterd there since the beginning. They moved to whereever the tax breaks where best… Chicago, Dallas anyone…

    -offshored manufacturing of all kinds of subcomponents to the 3rd world country of your choice.

    -layed off thousands of employees after the offshoring.

    -no bid contracts like those leased tankers they were trying to get the Air Force to buy.

    Sounds like win-win for the American taxpayer.

  • avatar
    Steve_S

    Until you can kill the union Ford is not going to be able to do much. Making great product would help but if Ford sells well then there is less incentive for the Union to give any kind of concession (not that they will anyway). Ford actually needs to do the same as GM needs to do and that is position itself to emerge as a leaner, more focused company after chapter 11. There is no way GM, Ford or DCX will be profitable until they ditch the unions as well as make more in demand product.

    How can you make good product if the people doing the work think the company is trying to stiff them. Shortsightedness by management and the UAW are the problems with the American car business and you need to fix both before you can succeed.

    I just hope Mazda will be able to float on its own when Ford folds.

  • avatar
    truthusername

    The guy must be smart. Why – he drives a Lexus and wouldn’t be caught dead in a Ford junker.

    Hopefully, Ford will give him a shiny new Taurus to replace his Lexus.

  • avatar
    William C Montgomery

    The Scully / Apple debacle certainly demonstrates that CEO’s are not interchangeable between industries. (We must give Scully credit for championing the Apple Newton, the first viable PDA featuring handwriting recognition software that is arguably better than any such software currently available). However, manufacturing airplanes and automobiles is much more similar than making the jump from marketing sugar water to changing the world via computers.

    I think that Ford needs radical change in business culture. Mulally probably has the skill set to get this accomplished. His success or failure will likely hinge on how far the Ford board of directors is willing to support him. If they support him in cleaning house, he might have a chance in reviving the blue oval into pink. If the board endorses the status quo and ties the CEO’s hands, it doesn’t matter who they install as chief executive.

  • avatar
    Frank Williams

    The Flexible Despot: I don’t know what exactly the definition of this term “car guy” is, or where you go to get some certificate saying you are one. The assertion that Mr. Mulally is not one, however, seems to be a bone sticking in the throat of many posters here. Although I am not an automotive engineer, I do enjoy driving and learning about cars. I wouldn’t be reading this website if I had no interest. Perhaps Mr. Mulally is the same.

    Actually, Mulally is not a “car guy” by his own admission. From an interview with Detroit News columnist Daniel Howes:

    In a move unprecedented in Ford’s 103-year history, the great-grandson of founder Henry Ford replaced himself as CEO with a 37-year veteran of the aerospace industry who freely admits he isn’t a “car guy” — “Can you make me a car guy?” Ford’s new president and CEO Alan Mulally asked me — and drives a Lexus.

    http://www.detnews.com/apps/pbcs.dll/article?AID=/20060906/OPINION03/609060390/1148/AUTO01

  • avatar
    guyincognito

    It seems to me that Mulally’s status as a car guy is inconsequential at this point. Ford just came out with a revamped product line. Replacements for the vehicles out now will not come for some time. The only thing that can be done immediately is to slash a burn. In this respect, I understand why Ford wanted to step down and bring someone from the outside in. Up until now, it has mostly been workers close to retirement age, truly poor performers, new hires, and contractors that have been let go. Now truly difficult and deep cuts must be made. This is Mulally’s immediate job. The fact that he is an engineer rather than a bean counter does give me some confidence that he will also attempt to assemble a lean, efficient team from the ashes to bring Ford back.

  • avatar
    Frank Williams

    Will Mulally have to park his Lexus in the outermost parking lots since it’s not built in this country by Ford and the UAW?

  • avatar
    Mike

    A successful company makes products that people want to buy. Period.

    -It doesn’t really bother me that Mulally is not a blatant “car guy”. To me, the fact that he drives a Lexus LS430 shows he has some taste in cars. There’s a little light there.
    -The fact that he’s an engineer is also helpful. Too many times CEOs get that position and are strictly businessmen/women. They have no idea what is going into their product or what really makes them tick.
    -I’m glad that Bill Ford is not CEO anymore. He did nothing good for the company as far as I can see.

    I just hope that Ford’s upper management will support their new CEO.

    I’m optimistic.

  • avatar
    Captain Neek

    Why Ford couldn’t recruit someone from Toyota or Honda beats me. I think the enemy has been indentified for pretty much two decades now… so why not take a leaf (or two) out of their books and steal a few of their top execs?

    Even the Koreans seem to be gettting it right. This is despite selling some less-than-brilliant product (to say the least). Why doesn’t Ford investigate their success or business models?

    Let’s be honest here, the old way is NOT WORKING. Let’s try something new. How far up the creek are Ford and GM going to have to be before they bet the company on something really unique, out-the-box or cutting edge?

    “Death watch” would be a funny name if it weren’t so damn tragic…

  • avatar
    Claude Dickson

    He need not go that far afoot. Mazda has been doing some interesting things with their Mazdaspeed line.

  • avatar
    imageWIS

    I only have one question: was this part of the “Bold Moves” campaign?

    Jon.

  • avatar
    Kevin

    Good hire. Fuel efficient cars are a weakness at Ford, and when I think “Fuel Economy”, I too think massive passenger jet.

    Maybe he’ll bring back tailfins, too.

  • avatar
    PandaBear

    There is no way in hell can Ford afford to slash the union contract right away to “fix” the problem. What I think they can do, is to convert their lines to build Mazda and Volvo here in the state, to buy them some time. In the mean time, redesign all their products AND KEEP THEM UPDATED. It will take some time, not just a year or 2, but then again, the problem with most American companies is they are impatient for the long term, permanent solution.

    Gradually invest heavily in automation and foreign parts manufacturing, and get Union out of the picture. That, will take probably 10+ years.

  • avatar
    gearhead455

    Rick Wagner (GM) just announced 5 year/100,000 mile powertrain warranty on all vehicles.

  • avatar

    Let me put this simply:

    If a senior exec is making detailed product decisions, then the system is broken, and the company won’t succeed. Period. No qualifications.

    The press and enthusiasts want a “car guy” at the top because it’s something they can see and comprehend. It’s not a solution to anything. Yes, if the guy at the top is going to make the calls whether or not he’s a car guy, then you want a car guy.

    But what you really want are people on the vehicle teams who know the product, know the market, can make the right decisions, and WHO ARE ALLOWED TO MAKE THE RIGHT DECISIONS. The assumption that a brilliant senior exec can make the right decisions after a brief presentation is common, and deadly.

    The issues involved are a hell of a lot more complex than “Just build a great car.”

    It’s when people cannot develop their knowledge and cannot apply the knowledge they do have that you get the “frozen middle” so often spoken of. More often than not the problem is the system, not the people. If you replace the people but keep the system, you’ll end up with the same result over and over and over and over. Sound familiar?

  • avatar
    Dave M.

    Despite the post-911 crash in airplane sales

    ouch. Was that association intentional?

  • avatar

    I think this is a good sign.

    Mr. Mulally has lead a technical company involving many subcontractors, understood his market, worked with union labor, and competed successfully against foreign competition. A wise choice from outside the Detroit attitude.

  • avatar
    Mervich

    It occurred to me in an epiphany. Does it not seem that the automobile manufacturers experiencing spiraling sales declines are the very same ones who no longer include an ashtray and lighter in every model? There ya have it! Who needs an aeronautical or astronautical engineer?

  • avatar
    Joe C.

    deVeritas, you make a very good point:

    “They make sure they have a high quality product that does what it needs to do no matter what, even if the customer changes scope. Niether military nor civilian applications have much room for error tolerance. Boeing deals with both.”

    Aerospace is a High Reliability Organization – Boeing, NASA, et al can never settle for “good enough.” It has to be RIGHT or it doesn’t fly. Every component is designed beyond normal tolerance, tried & tested, then tried again. If there’s a failure (planes and shuttles do crash), engineers tend to want to know why, and learn.

    If Mulally brings even a hint of these principles to Ford, we could end up with more reliable, better-designed, better-engineered, RIGHT products. If he gets frustrated, it will be a short honeymoon.

    It would, however, take time and money, which Ford might – or might not – have enough of.

  • avatar
    Terry Parkhurst

    “Insight owner” makes a valid enough point about how Detroit needs a perspective – well, maybe more than one – from outside its own narrow viewpoint. But I don’t know that Alan Mulally is William Deming.
    William Deming was a business professor who went to Detroit in the 1950s with ideas about how to make business better. But he fell vicitim to the “not invented here” syndrome which has plagued Detroit, almost from its inception as a car-building city. Then too, in the 1950s, at the height of what David Halberstam has called “the American Century,” Detroit felt no need to change anything, either product or management practices.
    By the 1970s, Professor Deming’s ideas – which included things such as “just in time inventory” – were helping the Japanese auto industry make major beachheads in the States.
    “Mervich” also is onto something. There was an instructor at the Art Center named Burdick (can’t recall his first name) who once said, that industrial designers put things into products and environments (building spaces, etc.) that the engineers forgot. Many of the interiors of modern cars look to be engineered, not designed.

  • avatar
    starlightmica

    My Toyotas didn’t have standard cigarette lighters and ashtrays – is that why Toyota sales are spiraling – upwards?

    I guess we’ll see if an outsider can cut it in Motor City. Who[m] was [were] the last outsiders who were recruited – the Whiz Kids?

  • avatar

    No, GM’s smattering of outsider GM brand managers and various people Nasser brought in to Ford, including George Murphy who later went to Chrysler.

    http://cgcomm.daimlerchrysler.com/biographies.do?method=display&docId=283

    At a higher level, GM made lawyer Harry Pearce Vice Chair for a while, and he was rumored to be eventual CEO before being sidelined by leukemia. The actual CEO at this time was John Smale, from P&G. But that was the result of a boardroom coup; Smale wasn’t brought in, he was already in as a member of the board.

  • avatar
    jerry weber

    After commenting that Mulallly is coming with a team, he was quoted today as the only one coming. This will make change different. Iacocca brought his band of compatriots with him to Chrysler from ford,, he then reached out in the auto industry to fill in holes. He knew after a week just where chrysler was, and he knew he needed help fast. Henry ll brought the so called whiz kids from the defense department including Robert McNammara in to fix Ford in 1945, it to was going down the toilet after decades of mismanagement. Where will Alan find the people who he has a relationship with, know cars, and will tell him the truth? He may find people who know cars when he get’s into Ford. as to telling him the truth and having a personal relationship with him, that will not be found easily. He can certainly issue the standard edicts cut 10% or more out of your budget, and have it on my desk in the morning. But will that build cars that people will buy? It is very complex as Bill Ford found out, time will tell.

  • avatar
    deVeritas

    Joe C, excellent point:
    Real engineers do want to get to the bottom of things. They look at the numbers, they face the facts. Ignorance is not bliss to an engineer. Engineers make ‘smart moves’, gamblers make ‘bold moves’.
    (Just hopefully the ‘smart move’ for Ford looks good too. Engineers do have a tendancy to be overly technical and efficient, sacrificing aesthetics).

    To Kevin:
    You stated: Good hire. Fuel efficient cars are a weakness at Ford, and when I think “Fuel Economy”, I too think massive passenger jet.

    You’ve got to be kidding right? When the ‘world’ (defined here as: non-US…. aka Airbus) decided to go big with a double decker largest commecial airship to one-up Boeing with the A380, Boeing went the opposite direction with a plane that is 20% more fuel efficient than anything comparable, the 7E7. 20% fuel efficiency on a plane with the specs of the 7E7 is no small feat (http://www.aerospace-technology.com/projects/dreamliner/). And coming from a manufacturer that originally built it’s repuation on bigger (737..47…67…77), that shows no lack of vision or desire to adapt to change.

    While Airbus made a ‘bold move’, betting the bank on bragging rights and a wild idea, Boeing made the ‘smart move’, and may have started an entire market shift in their favor.

    (Here’s my reasoning if your interested…Airbus gains 12% efficiency by packing more people into a huge airframe, but I’ll venture to say that for every 1 international flight of the A380, there are maybe 10 or more domestic flights where the 7E7 can operate. Do the math with 10 times the flights and nearly twice the efficiency. Which would you buy as a major airline, trying to make a return on your investment?)

  • avatar
    luiz.stockler

    Let’s see: The guy is ex-aerospace, so the next Ford ad campaign will have RAF Jaguar turbine engine landing diagonally under the hood of a [re-badged] Ford “Seven Five Hundred and Seven” and hopefully its sales will climb (no pun intended) higher than Chevy’s, I mean, Saab’s jet-powered 9-7.

    UAW is no SPEEA though… he’s going to be in for a choppy ride. I wonder if he moved the family from Seattle to Detroit or he’s planning to commute ;-)

  • avatar
    tincanman99

    We keep hearing how the union is the root of all evil. Fact is MANAGEMENT designed and signed off on the car designs the produce. How is that for accountability. MANAGEMENT engineered the cars to be the piece of junk that they are.

    Since everyone has decided the union is so overpaid why dont we just let in more people from the 3rd world country of your choice. When they take your job, I dont want to hear any whining about it. And dont think this just happens to blue collar people. Indians and Chinese are aggressively moving into the white collar jobs.

    How is that race to the bottom working out for you?

    I dont hear jack about raining in executive compensation. Why dont you be smart and go to the SEC’s web site and pull Fords financials and see what the executives are paid.

    Check out what they are paid for driving a company into the ground.

  • avatar
    Dr. No

    Alan,

    I always liked the Aston Martins in the 60s, so take a cue from the retro Mustang’s success and let’s do it again. Just don’t be making it a hybrid.

    Improve the Land Rover’s reliability. I don’t know what to do with Jaguar. I’ll get back to you.

    Dr. No

  • avatar
    Steve_S

    Sell Jag, Aston and LR. You don’t need them. You have American-Ford, European-Volvo, Japanese-Mazda and luxury-Lincoln (just make Lincoln on par with Lexus or MB stylewise while offering better value).

  • avatar
    ktm

    I read an interesting article recently (can not remember where) about Ford’s current circumstances. The author suggested that Ford should not sell Aston, LR or Jaguar because those marquee brands are Ford’s only attraction to perspective partners.

    In one fell-swoop, the partnering company would also gain access to those three brands, making a partnership with Ford very attractive. If Ford were to sell off those brands, what does Ford bring to the table? Nothing.

  • avatar
    jerry weber

    We now see that ford is beginning to lose the exec team that Bill Ford assembled. The number two gal will leave next week, so Mulally will need a new team from somewhere:inside ford, boeing, the wall st journal ads, other car companies, who knows, and yes this will take time to assemble and train. In the meantime an interesting question, if GM and Ford are so proud to be rid of a big chunk of their plants and skilled workers, who would build any run away success they might come up with? Would it be farmed out to foreign companies? Would they reopen old plants, build new ones? How long would this take? Will toyota, nissan, honda, et al be on siesta break while all of this is going on? Think your job is tough, try Mulally’s.


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