Mark Fields, who reportedly will become Ford CEO at the end of the year, shown delivering the keynote address at the NY Auto Show last week.
Ford Motor Co. CEO Alan Mulally will step down at the end of the year, according to a variety of news reports and company sources, with the maker’s current Chief Operating Officer Mark Fields to step in as his successor.
The move – which Ford declined to comment upon – is no surprise to those familiar with the automaker’s plans which were largely laid out in late 2012 when the 52-year-old Fields was appointed to the COO position, a senior company insider at the time saying the top spot was “Mark’s to lose.”
“This is no surprise whatsoever,” said George Peterson, a former Ford analyst and now head of the consulting firm, AutoPacific, Inc. “Ford has been pretty straightforward about doing what they said they would do.”
A 25-year Ford veteran and one of the first executives at the company to embrace the radical changes brought by 68-year-old Alan Mulally, Fields is expected to largely maintain the current course his predecessor brought to the only Detroit automaker that was able to avoid bankruptcy during the Great Recession. That said, both Ford insiders and company observers run down a list of serious challenges that will face the maker going forward.
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Though Ford delivered strong $7.2 billion in profits for all of 2013, including $3 billion for the fourth quarter alone, it has signaled a likely dip this year due to heavy investment in new products – 23 new models due worldwide in 2014 — and for the expansion of its Chinese operations.
Ford was late to the party in that booming nation, now the world’s largest automotive market, though it has been generating significant growth over the last several years. Nonetheless, it is struggling to catch up to market leaders General Motors and Volkswagen AG.
China could prove critical for the long-struggling Lincoln Motor Co., the once-powerful Ford luxury brand that is a weak, second-tier marque today. Lincoln is this week officially launching its sales network in China – which is also expected to become the world’s largest luxury car market before the decade’s end.
Matt Vandyke, Lincoln’s director of global operations told TheDetroitBureau.com earlier this month that he expects China to soon become the brand’s largest market. But if the move fizzles, it could spell the end of Lincoln which several Ford CEOs have considered abandoning over the last 15 years.
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Analyst Peterson cautions that even if the debut is initially well-received, it far from assures Lincoln’s success – in China or anywhere else. “The commitment for Lincoln still isn’t really there,” he contends, adding that the $1 billion Ford has so far promised to spend is “petty cash.” Indeed, while Ford has promised to roll out four new products for the luxury maker between 2013 and 2016, Mercedes-Benz last week announced it will launch 30 all-new or completely renewed models between now and the end of the decade, “about one per quarter,” revealed Steve Cannon, CEO of Mercedes-Benz USA.
Ford has other challenges to deal with, including the long-awaited turnaround in Europe where it has been losing money for most of the decade. There are signs the effort is gaining traction, though Fields last week declined to say he expected Ford of Europe would be back in the black this year, sticking with a forecast of a turnaround by 2016.
Perhaps the biggest challenge Fields faces will be staying on track with the One Ford strategy put in place after former Boeing executive Mulally was recruited nearly eight years ago.
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Few doubt Ford will continue to shoot for the increased economies of scale that come with developing products – such as the compact Focus model – that can be sold around the world with only modest differences reflecting regional tastes and local regulations. The bigger question is whether Fields can continue to hold at bay the sort of “internal fiefdoms and infighting” that long crippled Ford, said Peterson.
Fields generally gets credit for being the first top Ford executive to embrace the new Mulally approach, which called on managers to put the company first. But there have been occasional signs that the classic Ford culture hasn’t been completely extinguished, creating occasional problems and forcing a few management moves.
For his part, Fields was unavailable to comment, and Ford would only issue a terse statement noting, “We do not comment on speculation. We take succession planning very seriously, and we have succession plans in place for each of our key leadership positions. For competitive reasons, we do not discuss our succession plans externally. There is no change from our previous announcements. If something were to change, we would let everyone know.”
In fact, the Bloomberg News Service reported that Ford “may announce the moves as soon as May 1,” citing several inside sources. The maker is expected to hold its next board meeting on May 7th, the day before its annual stockholders meeting. Any decision on management succession would almost certainly be announced by then.
If Fields does, indeed, get the CEO post, it would raise another significant challenge, that of holding together the current management team. Most observers expect that Joe Hinrichs, who had been considered a long-shot alternative for chief executive, would stay on, either in his current position as Ford’s President of the Americas, or perhaps taking Fields’ COO spot.
Mulally and Ford Chairman Bill Ford are expected to try to hold the team together but less certain is what will happen to global marketing chief Jim Farley, who also oversees Lincoln, and several other senior managers.