Ford's Mulally losing luxury of time
Ford Motor Co. stunned the Motor City a year ago when it named an
aerospace engineer with no automotive experience as its CEO. That just
wasn't done around here.
It is now. Alan Mulally, 62, is no slave to Ford's insidious, insular
culture, partly defined by the denial hastening the automaker's steady
decline. Nor is he a "car guy." But he is an accomplished businessman,
which is a good thing if the goal is to forge a sustainable enterprise
from the shrinking shell of Ford.
A year ago this week, Ford Chairman Bill Ford Jr. was preparing to
essentially fire himself as CEO to make way for Mulally, a 37-year
Boeing Co. veteran who guided the aerospace giant's commercial aviation
unit through the dark aftermath of the Sept. 11 attacks, shrank its
operations and put it on its current growth track.
Mulally's trying to do the same in Dearborn, this time as an outsider
wrestling with a culture too accustomed to losing, too often whipsawed
by short-term expedience, by the whims of its leaders and by cults of
personality instead of one rallying around a simple, clear and realistic
Does the guy who Bill Ford agreed to pay $28 million in his first four
months on the job have enough runway to succeed? Does he have enough
help to change a culture historically rife with politics, positioning
and entitlement instead of focused on performance and real-world
experience outside Ford?
Ford "waits for a new leader to say 'Here's where we're going,' but
'Here's where we're going' has had no constancy of purpose," says a
source familiar with the situation and Mulally's thinking.
Running short on time
Like the boy who said the emperor has no clothes, Mulally has brought a
fresh, uncompromised eye to the problems at Ford even if he hasn't yet
used his sway as CEO to seed Ford's leadership with the kind of outside
perspective it so badly needs.
Ford could use more like him in other parts of the company. But the past
year suggests Mulally isn't eager to cashier under-performing executives
in favor of outsiders, as much as some constituencies inside and outside
the Glass House want him to show poor performers the door.
With Ford's U.S. market share still drifting downwards, economic
conditions deteriorating and the likelihood that the combination will
force even more cost-cutting in Dearborn, is Mulally losing the luxury
Yes. Because no matter what Ford gains in talks now under way with the
United Auto Workers, no matter how quickly the Blue Oval grows in China,
Russia and Latin America, no matter how much Ford books on the sale of
Jaguar, Land Rover and perhaps Volvo, its success will not be
sustainable if more Americans don't buy its cars and trucks.
"The most important thing to me is to tap into the knowledge and the
expertise that existed at Ford and not necessarily to bring in people
from another industry or another point of view until I've absolutely
exhausted the resources that we have here," he said at a media dinner
In other words, Mulally is happy with his management team until he isn't.
He won't say so publicly, but Mulally is aggressively looking outside
for a chief marketing officer to assume global responsibility for
peddling Ford's cars and trucks. The boss may not be a marketing guy,
but he can read numbers, and they aren't going in the right direction.
'Going out of business'
Mulally appears true to his Kansas roots -- earnest, direct, a sincere
believer in the power of teamwork, enthusiastic in an aw-shucks sort of
way. But senior executives who work closely with him tell me he's also
critical, demanding, impatient with posturing and intolerant of the
petty politicking that has long roiled Ford.
He isn't afraid to tell Ford lifers that the "company has been going out
of business for 30 years." He knows Ford's first "Bold Moves" ad
campaign, announced with great fanfare, flopped and made nary a ripple
with would-be consumers until it was retooled and launched again.
He hasn't shirked from challenging dealers, many enriched by easy
profits from selling pickups and gas-guzzling SUVs, to once again learn
how to sell cars. He says the company needs to be run like a business,
implying that it has acted more like an arm of government immune to the
market realities of supply and demand, profit and loss.
If the book on Mulally's stewardship of the Ford's turnaround is that it
is just beginning, it's not because he has done nothing. He mortgaged
the company's U.S. assets, including Ford's Blue Oval, to fund a
turnaround. He completed the sale of Aston Martin, put for sale signs on
Jaguar and Land Rover, and placed Volvo under "strategic review."
He demanded -- and got -- a single set of numbers to manage the company,
not the multiple sets from competing camps that offered different
versions of reality. He sought -- and received -- high-level buy-in to
his notion of "defining reality" for a "single" Ford team; embraced a
global product development system long after rivals like General Motors
did; named a global manufacturing czar, Ford of Europe President John
Fleming, without publicly announcing it.
He streamlined top management, focusing the regional business leaders
around "one Ford plan." The move is beginning to pay dividends in
product development, purchasing and cost-cutting by reducing the number
of vehicle architectures and engines used by Ford worldwide.
He is in the process of cutting 40,000 jobs in North America and, by
2012, plans to have closed 16 of 41 plants. He reversed silly marketing
gaffes which, among other things, trashed Ford's third most recognizable
model name -- Taurus -- in favor of F-sounding names destined to give
alliteration a bad rap.
'Take off rearview mirrors'
All of that and more are necessary to turn around an American industrial
icon, but none of them is sufficient so long as a retrograde and insular
culture continues to thrive inside the Glass House. Next to stemming the
slide of Ford's bellwether North American business -- no small job --
perhaps nothing is more important to Mulally's success or failure.
"Ford needs 100 Alans," says another source who has worked closely with
Mulally. "They need people who are going to question why they do things
the way they do. They need to take off the rearview mirrors and start
looking out through the windshield at the road ahead and drive past the
A stock response: Ford has been there before and it didn't work. Former
CEO Jacques Nasser, in his own bid to energize Ford, actively recruited
outside marketing expertise, formed the Premier Automotive Group of
luxury brands and moved Lincoln headquarters to California. The
outsiders are long gone, the PAG is being dismembered, Lincoln is back
home and the lesson is supposed to be that outsiders fail at Ford.
Or does Ford reject outsiders by retreating into traditional
bureaucratic crevices while the competition blasts by? Mulally's
obsession with "defining reality" and working as a team on "one Ford
plan," cornerstones of his strategy, is his play to transform Ford into
a company tooled to compete in the real world.
It's not there yet. But it could be with the right help.