Ford Death Watch 5: Can Mulally Get Ford to Straighten Up and Fly Right?
Was 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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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.
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.