James Pozzi looks at what lies ahead for Ford’s new chief executive officer Mark Fields, who has been confirmed as the successor to outgoing boss Alan Mulally.
So one of the automotive world’s least well kept secrets is out. Mark Fields, the 53-year-old chief operating officer of Ford, will replace Alan Mulally as the company’s new CEO from July 1. And while last week’s announcement was surprising to very few, it has nevertheless provided a plethora of discussion points about the company’s past, present and future.
Firstly, under the microscope is the legacy of Mulally. The 68-year-old, who arrived at the then embattled automotive giant in 2006 from Boeing, has left some big shoes to fill. Christened favourably as Ford’s “Mr Discipline” by Forbes Magazine, Mulally has overseen one of the most impressive corporate recoveries of recent times.
As one of Detroit’s big three with General Motors and Chrysler, it was this trio of Motor City companies that best illustrated the decline in American car making. By mortgaging Ford’s assets to address falling profits and declining market share, he ensured it became the only major American automotive manufacturer not to file for bankruptcy or seek a government bailout.
Closer to the factory floor, he also instigated the One Ford initiative, which has been credited as improving product quality and reducing costs by sharing engineering and vehicle design throughout plants worldwide. With an emphasis on nurturing individuals, Mulally revamped the company from the shop floor to the boardroom. When he arrived eight years ago, the company lost $12.7bn. In his final year, Ford is expected to make pre-tax profits estimated between £7-8bn.
But where next for the departing CEO? Last year saw him linked with a top job at Microsoft, while speculation has placed him in future roles with government and business schools keen to tap into his team-building prowess. Company chairman Bill Ford last week labelled Mulally a “Hall of Fame CEO”, and remarked how such individuals rarely ever let go – even in retirement. With his stock high, it seems inevitable he will resurface in a high-profile role sooner rather than later.
Also on the agenda was speculation over what lies ahead for Fields. Having overseen operations in Europe and South America since joining the company from Mazda in 1989, he is tried and tested as a CEO. Talk of continuity and smooth transitions has been constant. But as is the form, it is rare two CEOs see successive boom times under successive tenures, and Fields undoubtedly has some major issues to contend with as he takes the top role.
For starters, quarter profits are down 39% on the same period last year. Ongoing issues with the slow recovery of the European persist, while political unrest in Russia – recipient of heavy Ford investment – continue to have an impact. But there’s an overriding feeling Fields is in an enviable position of being set up to succeed from the off.
Despite issues at home and abroad, Ford remains in an upward trajectory and in significantly better fighting shape than its Detroit counterparts. And if losses in Europe subside while activity in markets such as the BRIC nations (Brazil, Russia, India and China) continue to grow, then Ford’s ascent is set to continue throughout 2014 and beyond.