The biggest news of the week was the sudden announcement by Bill Ford that he was stepping aside as President and CEO of Ford, and that he was hiring Alan Mulally, Boeing's Executive VP of commercial aircraft.
The punditry flew thick and fast, from the bloggers to the Wall Street analysts. Some think Mulally is not going to be effective because he is an outsider, others think that this is exactly what is needed.
I think that the voters at AutoBlog's recent poll (results here) are right: the choice of CEO is not critical for Ford. "It's the product, stupid" seems to be the popular answer.
From my reading in the Wall Street Journal and other places, it seems that Mulally is known as a gregarious team builder on one hand, and a ruthless cost cutter on the other. While at Boeing, he cut nearly 50% of Boeing's employees, and outsourced many airplane parts and modules to suppliers.
I would guess that Mulally has been brought in to do the same thing for Ford--chop the company down in size, without mercy, by focusing on simplifying the product line and outsourcing major modules. A likely outcome of this is fewer brands under the Ford umbrella, fewer platforms, and more common parts between platforms--which is what all of the automakers have been working on doing for some time now. "Simplify!" and "Outsource!" have been the automotive mantra for some time.
Could Bill Ford have done this? I am sure he could have, but reports were that he was exhausted from wearing his three badges--CEO, President, and Chairman.
A telling bit from the Wall Street Journal yesterday, my paraphrase: Bill Ford awoke one day at 5:00am, but instead of going for his morning run, he sat down and started making a list of what he would like Ford to represent over the next 10 years. "Safety" and "Environment" were two of the things on the list. Bill Ford then thought about what brands were on the road to delivering his key goals, and which brands weren't. The brands that didn't look like they could deliver might not "fit in" with the future of Ford.
In another part of the same piece, the WSJ related this story: at a board meeting, Mark Fields advocated that Ford sell Aston Martin to generate cash to keep North America moving forward. Mark Schultz disagreed, saying that Aston was making money. Bill Ford "slammed his hands down on the table", and said "join the party, we're selling it".
What comes out of these stories, if true, is that Bill Ford is wearing thin, and needs a frontman to take over the day-to-day grind of making ugly decisions that upset employees, shareholders, and dealers.
Reading the tea leaves, I see this scenario (purely my speculation): Jaguar, Land Rover, and Aston are sold off. Mercury is phased out, and Mazda takes its place as the urban/youth/import brand. Lincoln dealerships must then pick up Mazda, or sell Fords as well as Lincolns. Lincoln is on probation. Volvo stays put, due to its strong safety portfolio, and as the Euro-Luxury brand. Ford vehicles get more upscale options, to fill in for the missing Mercury.
I wish Mr. Mulally God-speed, because all of us here in Metro Detroit need Ford to be healthy, not just workers but everyone else from the auto suppliers to the restaurants.