Ford Ends Wait, Names Mark Fields as CEO -- 3rd Update
By Mike Ramsey and Joann S. Lublin
Mark Fields is set to take over as chief executive of Ford Motor Co. on July 1, and he'll a face very different set of challenges than those the current boss, Alan Mulally, has tackled over the last eight years.
When Mr. Mulally arrived in 2006, the second largest U.S. auto maker's main troubles were inside the company--a dysfunctional culture, mounting losses, poor product quality and unending turf battles that hamstrung its performance.
Mr. Fields will take the reins of a company that is expanding and profitable. However, he can't slow the changes intended to make the results-oriented management style instilled under Mr. Mulally continue. He will also have to keep Ford's profits in North American rolling and stanch losses in Europe.
Big tests also will come from the outside: Ford is still building operations in China, Russia, India and other emerging markets, and Mr. Fields faces decisions on where next to invest for sales expansion, and what new automotive technologies to back.
The new CEO won't have an easy time at Ford, some executive experts believe. "Mulally worked wonders," said Jeffrey Sonnenfeld, a senior associate dean at Yale School of Management who knows Messrs. Fields and Mulally. "This company is not on cruise control."
Ford, as expected, disclosed on Thursday that Mr. Mulally, 68 years old, would retire, and Mr. Fields, 53, and the Dearborn, Mich., company's chief operating officer for the last 15 months, would be his successor. Ford shares fell 1.5% to $15.91.
Mr. Mulally is retiring but his ever-present smile won't go away. A U.S. high-tech firm has approached him about joining its board, said a person close to the matter. But it was unclear whether he would accept the position. Mr. Mulally was a candidate to join Microsoft Corp. as CEO before the tech giant chose an insider earlier this year.
In an interview on Thursday, Mr. Mulally declined to discuss his plans. "The most important thing for me right now is this orderly [management] transition," he said. "But you know how much I like to serve. I do like to serve, but I also like the idea of retirement."
Mr. Mulally said he offered no advice to Mr. Fields. "Mark helped to create this business environment. He is going to hold the values of this company really dearly in his hands. I don't need to tell him anything."
Mr. Fields's appointment is the latest in a series that has put Ford in the hands of a close-knit group of mostly younger executives. They include Chief Financial Offer Bob Shanks, 61, and development head Raj Nair, 49, who took their posts in 2012, the same year Mr. Fields was names chief operating officer. Mr. Fields worked closely with Mr. Shanks while each were at Mazda Motor Corp., when it was affiliated with Ford.
Joe Hinrichs, president of Ford's Americas operations, and Jim Farley, global marketing chief, were considered possible successors to Mr. Mulally.
"There is a lot of respect and trust among us," Mr. Fields said. Keeping the team together may be one challenge. " These are terrifically talented people, and there will be other companies that want to entice them," Mr. Fields said.
In China, industry growth is slowing, and economists worry manufacturers may eventually end up with more plants than they will need.
Ford has also invested heavily in Russia and India, two giant markets where auto sales haven't grown as rapidly as hoped. Trepidation in Russia because of the political situation in Ukraine and the economic sanctions that have been put in place pose another hurdle for the new boss.
Mr. Fields may have to decide whether and how fast to invest in the next wave of emerging economies like Indonesia, Malaysia and Iran.
The auto industry is also being reshaped by new technologies such as hydrogen fuel-cells and electric vehicles. In the past few years, not all of Ford choices have panned out as hoped.
Ford was an early adopter of advanced in-car electronics that link with smartphones and manage vehicle controls through voice commands. But its system, MyFord Touch, suffers from complaints it is hard to use, and has hurt Ford's ratings in quality surveys.
The company has also invested heavily in fuel-efficient engines that were turbocharged to improve power and is about to start building a fuel-efficient all-aluminum F-150.
Mr. Fields promised to continue the focus on pushing new technology, while using research to reduce risks. "When you lay that bet down, it's not a 100-1 bet. It is more of a sure thing," he said.
Mr. Fields said one thing that won't change is the weekly business review meeting that Mr. Mulally instituted. It allows the company's executives to bring up each issue and hash it out before problem become serious. Ford said it wouldn't fill Mr. Fields's current position as COO.
"This process is so strong, and so evergreen in how it keeps us attuned to the market, that we are just going to keep rolling along," he said.
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