Bill Ford quits as Ford CEO
Sep. 5, 2006. 04:59 PM
REUTERS

DETROIT — Ford Motor Co. on Tuesday named Boeing Co. executive Alan Mulally to be its chief executive officer, as Bill Ford Jr. ceded operational control after a troubled five-year stint at the helm of the automaker founded by his great-grandfather.

Mulally, who was also elected to Ford’s board of directors, had been executive vice-president at Boeing, responsible for its commercial planes.

The move to appoint an industry outsider as CEO comes with Ford under growing pressure from analysts and investors after a $1.44 billion (figures U.S.) loss in the first half of this year and a nearly 10 per cent decline in sales through July.

Bill Ford became CEO in October 2001 and announced his first restructuring in January 2002, which included cutting 30,000 jobs and closing 14 plants in North America by 2012.

Ford has said it would accelerate its turnaround plan, dubbed the “Way Forward,” to respond to weakening U.S. demand for fuel-hungry trucks and SUVs amid high gasoline prices.

“Our turnaround effort required the additional skills of an executive who has led a major manufacturing enterprise through such challenges before,” Bill Ford wrote in an email to Ford employees on Tuesday.

“Clearly, the challenges Boeing faced in recent years have many parallels to our own,” Ford said.

Ford last month said it would cut fourth-quarter production by 21 per cent as it accelerates a turnaround plan that executives have said has not yielded results fast enough.

Bill Ford will continue his duties as executive chairman of the company and remain "extremely active."

"Clearly, the challenges Boeing faced in recent years have many parallels to our own," Bill Ford said.

Mulally, 61, spent 37 years at The Boeing Company, most recently as executive vice president. In addition, he has also been president and chief executive officer of Boeing Commercial Airplanes since 2001.

In that position he was responsible for all of the company's commercial airplane programs and related services, which in 2005 generated record orders for new business and sales of more than $22.6 billion.

Mulally was named president of Commercial Airplanes in September 1998. The responsibility of chief executive officer for the business unit was added in March 2001.

"I think the opportunity to work with Bill Ford and Ford Motor Co. is the only thing that could have attracted me to a job other than Boeing, where I have so many great friends and memories," Mulally said in a release.

He noted that many of the challenges he encountered in commercial airplane manufacturing are analogous to the issues at Ford.

Bill Ford said he expected Mulally would assist Mark Fields and the Way Forward team as they accelerate their business plan.

"After dealing with the troubles at Boeing in the post-9/11 world, Alan knows what it's like to have your back to the wall – and fight your way out with a well-conceived plan and great execution," Bill Ford said in his note to employees.

"He also knows how to deal with long product cycles, changing fuel prices and difficult decisions in a turnaround."

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Can they sell the Lions instead?