In case you haven’t heard, a report came out this week that Ford’s board of directors was close to naming the company’s current president of the Americas, Mark Fields (aka MKF – which may or may not actually be his initials) as its COO. If anyone had any doubt about who would step into the CEO role once the beloved Alan Mulally eventually retired, those doubts should be disappearing. As long as the report is accurate (and Bloomberg isn’t known for grasping at straws or inaccurate reporting), appointing Fields as the COO will make a very clear statement that he’s the CEO-in-waiting once Mulally retires. Alan Mulally is 67 and MKF is 51.
What’s interesting is that Mulally has done a great deal to develop Fields into a viable CEO candidate since the latter was recruited by Executive Chairman Bill Ford from his former gig as CEO of Boeing Commercial Airplanes in 2006. You may recall that prior to Mulally’s arrival, Ford’s fortunes were circling around the proverbial drain, it was about to mortgage its past, present, and future to gain access to much-needed credit in order to restructure. Then-CEO and family scion Bill Ford was in over his head and knew it, and arguably, the same could be said for a then-fortysomething MKF.
In late 2005/early 2006, Fields had just launched Ford’s “Way Forward” restructuring plan, which focused on plant closings, worker buyouts/job eliminations, and new-product development. At this point, Fields’ rising star was suddenly just treading water. The possible future Ford CEO had to watch the board of directors hire an outsider who knew almost nothing about the car business to be his boss and hopefully rescue an iconic American industrial company.
With the further collapse of Ford’s market share (the Toyota juggernaut was moving full speed ahead in 2006/2007) and the Detroit Three watching their sales fall, things got worse at Ford. The profitability called for post-cuts in the 2008 timeframe didn’t occur, forcing the company to somewhat embarrassingly concede that profitability would not happen before 2009.
Most importantly, perhaps, was that Mulally did something that nobody thought possible, and something that neither Fields nor Bill Ford were able to do: he forced culture change at Ford. He stripped away the regional fiefdoms, removed finger-pointing and replaced it with cooperation and collaboration. His “One Ford” plan – that it made no sense to duplicate efforts – whether they be engineering, or even model lineups – around the world when instead of creating two good cars, the market might accept one great car instead.
Between Mulally’s culture change and the “One Ford” concept, he left Ford in a much healthier place than it was before his arrival. Almost certainly, Fields will have an easier time managing the company than Mulally did when he arrived on the scene.
To be sure, there’s still plenty of work to do. Ford is healthy in North America (which helps MKF’s CEO credentials quite a bit), but in Europe, there’s an entirely different story. The difficult decisions made in North America on capacity reductions, brand shuttering (ahem, Mercury), and the elimination of storied, yet no longer popular models have in large part been tabled in Europe. It’s those very decisions that allowed Ford to survive and thrive in North America since the recession ended, and now it’s Europe’s day of reckoning. There’s also plenty of catch-up to play in Asia, and in particular, in China. Ford’s next CEO, whether it be MKF or another person, needs to grow their China sales well beyond where they are currently, instead of watching GM and Volkswagen continue to enjoy their dominant positions.
There’s also the matter of Lincoln. Ford’s only
luxury near luxury brand is hurting bad. Seemingly a lifetime removed from the late 1990s heyday when it not only outsold Cadillac, but every other luxury brand in the US, Lincoln is little more than a footnote in Ford’s sales results these days. I’m sure the margins are still nice on the slightly-nicer, higher-priced Fords that make up the Lincoln lineup, but that is not a good long-term strategy for building and maintaining a brand. Mulally may be the guy who finally killed Mercury (saving it from rebadged Ford purgatory), but if Fields can’t turn Lincoln around in the next five years, it too will follow Mercury into the dustbin of history. If that happens, there will truly be One Ford. No Jaguar, Aston Martin, Land Rover, Mazda, Mercury, or Lincoln. Just One Ford.
Fields will also have to face renewed competition from Toyota, which seems to have resumed its late-2000s torrid pace of growth (after suffering the recession, the unintended acceleration crisis, the tsunami, and Thailand flooding with hardly a break between them), plus Volkswagen, Hyundai/Kia, and mo
MKF isn’t going to have an easy time if he becomes Ford’s next CEO, but it could be worse. Had he been appointed CEO in 2006 instead of Alan Mulally, I don’t think Ford would have survived without bankruptcy. But now, six years later (and it will be seven by late 2013, when Mulally is rumored to be hanging up his red tie for the last time as Ford CEO), I think Fields has learneda lot from his boss, and the company he’ll be leading has also learned a great deal from Mr. Mulally. Fields will do well as Ford’s CEO, but he shouldn’t forget to thank the guy who set the table for him.