Ford Motor Co., the second-largest U.S. automaker, will soon name Mark Fields its next chief executive officer and reveal when current CEO Alan Mulally will retire from the company he is credited with saving, according to two people familiar with the pending announcement.
Mulally, 68, will step down before the end of the year and be succeeded by Fields, 53, now chief operating officer, according to the people, who asked not to be identified revealing internal plans. The Dearborn, Mich.-based company may announce the moves as soon as May 1, the people said.
The transition will bring an end to a storied chapter in Ford’s history, in which the automaker narrowly avoided bankruptcy thanks to Mulally’s management and a bet-the-business $23 billion loan. Mulally signed off on the loan shortly after arriving from Boeing Co. in 2006 and turned around the automaker by slashing costs and overhauling its lineup with stylish, fuel- efficient models that have won over a new generation of drivers.
“A lot of great CEOs leave and then there’s chaos behind them,” Executive Chairman Bill Ford, great-grandson of founder Henry Ford, said April 16 on Bloomberg TV. “Alan and I have talked about that – the importance of the final act of a great CEO is having a great transition.”
Ford is planning to make this announcement now to provide clarity on its leadership and an orderly transition of power, the people said. Fields emerged as Mulally’s likely successor when he was promoted to COO in December 2012.
Mulally will not fade from view in retirement to pursue his passions for golf and tennis, the people said. Rather, he is lining up a post-Ford position that will keep him involved in corporate governance or business policy, they said. Last year, Microsoft Corp. considered Mulally as its next CEO until the auto executive took himself out of the running in January.
Fields, a 25-year veteran of Ford, was tapped to become Ford’s No. 2 executive after leading the automaker’s North American operations from deep losses to record profits.
“We take succession planning very seriously and we have succession plans in place for each of our key leadership positions,” said Susan Krusel, a Ford spokeswoman. “For competitive reasons, we don’t discuss our succession plans externally.”
Mulally is credited with cultivating a more collaborative environment at Ford, which had long been characterized by executive infighting and backbiting. Fields was among the first executives to switch to the more cooperative style Mulally introduced.
A smooth hand-over of power at Ford would contrast with its history of tumultuous transitions, which included Bill Ford firing CEO Jacques Nasser in 2001 and Henry Ford II dismissing Lee Iacocca in 1978. Bill Ford replaced himself as CEO by hiring Mulally almost eight years ago as the company faced record losses. Even then, they discussed the importance of a smooth succession, Ford said.
“One of the things Alan and I have talked about, really since he hired in, is how important it is for a great CEO also to have a great transition,” Ford said on Bloomberg TV. “We feel our team is really good, really deep and very experienced.”
Under Mulally and Fields, Ford managed to avoid the bailouts and bankruptcies that befell the predecessors of General Motors and Chrysler. Ford has earned $42.3 billion in the last five years after losing $30.1 billion from 2006 through 2008. Last year, surging sales of Escape SUVs, F- Series pickups and Fusion sedans helped drive Ford’s pretax earnings in North America to a record $8.78 billion.
The return to profit also brought a restoration of the quarterly dividend in 2012, which has since been increased twice. The payouts had ended in 2006.
Mulally also increased investments in China, where Ford’s sales last year surpassed those of Toyota. The automaker aims to begin offering its Lincoln luxury models in the fourth quarter and is poised to surpass Hyundai and Nissan to become the third-biggest foreign carmaker in the market, behind only GM and Volkswagen.
Mulally exits Ford with some unfinished business. Later this year, the automaker will begin producing an aluminum-bodied F-150 pickup, its top-selling model, that is more fuel- efficient, yet will test truck-buyers’ acceptance of advanced, lightweight materials more common to the airplanes Mulally once engineered. Ford also is spending $1 billion to redesign its Lincoln luxury line to try to turn around sales that have fallen 65 percent since peaking in 1990.
Last year, Mulally’s compensation at Ford rose 11 percent to $23.2 million, according to the proxy statement the company filed last month. Mulally’s total payout since coming to Ford in 2006 tops $300 million.
Fields, who now runs a weekly business-review meeting Mulally instituted, received total compensation of $10.17 million for last year, up 15 percent from $8.85 million in 2012.
– With assistance from Matthew Miller in New York.