Ex-Boeing official takes reins at Ford
Alan Mulally, the 61-year-old executive vice president of aerospace company Boeing, will replace 49-year-old Bill Ford as president and chief executive officer at Ford.
"I'm clearly not an automobile person in my experience, but I'm certainly a product designer, and I care deeply about having a viable business,"Mulally said at a new conference. "This is a United States icon, and Boeing is a United States icon, and some people think the United States can't compete in the design of products, and I think we absolutely can."
Under Bill Ford, the country's second-largest company had embarked upon two major restructurings. In its latest move, Ford said in January that it would cut up to 30,000 jobs and close 14 facilities by 2012. The company lost $1.4 billion in the first half of this year.
Is Mulally the right guy to put Ford back on track? Some auto analysts think that his turnaround experience at Boeing--Mulally has been praised as being critical to the resurgence of Boeing's commercial airplanes unit--makes Ford's new restructuring plan more credible.
"Mulally's product and cost reduction focus [through outsourcing] adds capable new blood for a company suffering from both product and cost disadvantages," Citigroup analyst Jon Rogers wrote in a note to clients. But Rogers also raises this caution flag:
Mulally's experience is limited to a 37-year career with a consistently profitable company oriented to low volume products. ... Taking the helm and returning Ford North America to profitability will be a difficult proposition for any leader. Mr. Mulally nearing the end of his career faces little downside if he fails in this pursuit, as he was passed over for the CEO spot at Boeing twice.
Bill Ford, the great-grandson of company founder Henry Ford, will continue serving as chairman of the company's board of directors. That's a risky arrangement, argues John Challenger, head of consultancy at Challenger, Gray & Christmas.
"The question is, Will Bill Ford really be able to step aside when it is his family name on the company?" Challenger asks. "We have seen several examples of CEOs who have stepped down but continue to maintain control. It often ends badly for the replacement CEO." He cites recent corporate power struggles such as the ousting of Viacom CEO Tom Freston by Chairman Sumner Redstone and the departure of Nike CEO Bill Perez, who clashed repeatedly with Phil Knight, the shoe company's chairman and previous CEO.