Bill Ford Out As Ford CEO
Bill Ford, who struggled for five years to steer Ford Motor Co. toward financial stability, is stepping down as chief executive and is being replaced by Alan Mulally, a top executive from airplane maker Boeing Co.
Bill Ford, the great-grandson of company founder Henry Ford, will remain as chairman, the company said Tuesday in a surprise announcement.
The change comes more than seven months into a restructuring, which is the second under his watch and has so far failed to revive the nation's No. 2 automaker. Under the first plan, Ford closed five plants and cut 35,000 jobs, but its North American operations failed to turn around. The latest plan, announced in January, would cut up to 30,000 jobs and close 14 facilities by 2012.
Mulally, 61, was widely praised for being a key architect of the resurgence of Boeing's commercial airplanes unit over the past couple of years. He was a top candidate for the Boeing CEO job last year but the company went outside instead to select aerospace veteran Jim McNerney, then the 3M Co. chief executive.
Boeing on Tuesday named Scott Carson to replace Mulally as president of its commercial airplanes unit. Carson, 60, had been vice president of sales for the Seattle-based division and is a 34-year veteran of the company.
"We needed somebody who had extensive turnaround experience, who was a leader and a real team builder," Bill Ford said during an afternoon news conference.
He called Mulally "ideally suited" for the job.
"He understands how tough a turnaround can be before the results start to flow, and the necessity of keeping the team together and in focus," Ford said.
Mulally, who has spent 37 years at Boeing, said he looked forward to applying lessons learned at Boeing to Ford.
"I also recognize that Ford has a strong foundation upon which we can build. The company's long tradition of innovation, developing new markets, and creating iconic vehicles that represent customer values is a great advantage that we can leverage for our future," he said in a statement.
Dearborn-based Ford, which lost $254 million in the second quarter, pledged in July to speed up the restructuring. At the time, Bill Ford said the company had been caught off guard by the speed of the consumer shift away from pickups and SUVs to more fuel-efficient vehicles — a shift that has largely benefited Asian automakers at the expense of domestic companies.
"The reality is that Ford Motor Co. has seen their market share diminish in almost a continuum over the past five or ten years," Keith Crain, editor and publisher of Automotive News, told CBS Radio News.
Bruce Clark, lead auto analyst at Moody's Investors Service, said Mulally faces a "daunting task in attempting to reshape Ford's operating model" as demand shifts rapidly away from trucks.
"However, he comes to the company with a strong background in engineering, manufacturing and product development," Clark said in a statement. "We think that this will be a valuable skill set as he fills the CEO position at Ford."
Bill Ford said he would continue to be highly involved in the company as chairman.
"I'm not going anywhere," the 49-year-old said. "I was born with the Ford Motor Company and I'll die with the Ford Motor Company."
In a September 2004 interview with The Associated Press, Bill Ford said the automaker was poised to sustain a financial turnaround by increasing its retail sales in the crucial American market. Instead, market share has continued to erode.
Also Tuesday, Boeing named Scott Carson as president of its commercial airplanes unit after the respected Mulally left for Ford.
The 60-year-old Carson had been vice president of sales for the Seattle-based division and is a 34-year veteran of the company.
CEO Jim McNerney calls Carson a seasoned and well-respected leader. He says Carson is uniquely qualified to lead the commercial airplanes team and advance performance and growth.
Boeing also named James Jamieson to the new position of chief operating officer of Boeing Commercial Airplanes.