Ford terms "false" a report that a search is now underway to replace 66-year-old CEO Alan Mulally.

Ford Motor Co. terms “false” a report that it has begun the search for a successor to well-regarded CEO Alan Mulally.

A report in today’s Wall Street Journal claimed the maker was looking at four potential candidates to assume the helm for the 66-year-old executive, who many expect to retire within the next year or two.  The WSJ report claims four potential candidates are under consideration, echoing an earlier report on TheDetroitBureau.com that when it comes to finding a successor to Mulally Ford would prefer to draw from the ranks of its current management team.

But in regards to an ongoing search effort, a Ford statement contends, “The Wall Street Journal story is false. As (Chairman) Bill Ford has consistently said, we will always consider both internal and external candidates for any succession plan, but we do not have a search under way for an external CEO successor.”

A long-time senior executive with Boeing, Mulally joined Ford in September 2006, just as the maker’s fortunes appeared to be fading.  He helped spearhead a risky turnaround plan that initially saddled the automaker with hefty debt – but which allowed Ford to push through the economic downturn without going into bankruptcy or seeking a federal bailout like its cross-town rivals General Motors and Chrysler.

Mulally has also been credited with engineering a massive shift in the Ford corporate culture.  The highly politicized management structure has been reshaped into a more team-oriented system.  In turn, that has made it easier to implement the so-called One Ford approach Mulally has promoted, where the maker has shifted to a global product development system rather than letting each of its key operations function as effectively independent entitities.

For his part, the ever-ebullient Mulally has said on a number of occasions that he will not retire as long as he is “having fun.”  But few expect Mulally to stay on for more than a couple more years.

The Journal story cites “people familiar with the matter” as claiming a management search is already underway.

The report echoes at least one element of the report TheDetroitBureau.com published earlier this year, claiming that Mark Fields, Ford’s 51-year-old President of the Americas, is one of the leading candidates, as is Joe Hinrichs, the maker’s 45-year-old chief of Asian Operations.

Also on the list is John Krafcik, the one-time Ford engineer who now heads Hyundai Motor America, the fast-growing U.S. subsidiary of the leading Korean carmaker.  There have been numerous reports suggesting Ford might want to hire Krafcik back though the executive has repeatedly told TheDetroitBureau.com that he is not a candidate and does not want to leave California, where he is now based.

The surprise name on the WSJ list is Phil Martens.  He currently serves as CEO of the aluminum products company Novelis, Inc., but was the former product development chief at Ford.  But Martens was a controversial figure at the automaker and sources contacted by TheDetroitBureau.com say they find it extremely unlikely Ford Chairman Bill Ford or the maker’s Board of Directors would risk alienating the company’s management team by bringing Martens back.

Other sources have suggested that Lewis Booth, Ford’s popular and well-regarded Chief Financial Officer, could be on any succession list – though at 61, Booth would be considered a short-timer, perhaps a fill-in until the young Hinrichs were to gain more experience or to give more time for an outside search.

In a written response to the Journal, Ford Chairman Bill Ford wrote, “At Ford, we are fortunate to have a strong list of internal candidates and the Board is pleased to support their further development. While our preference always will be to develop talent internally, we also survey the external environment for potential candidates as a regular course of action.”

A company insider told TheDetroitBureau.com that the Ford board has to leave open the possibility of finding an outsider to replace Mulally or they could be accused of malfeasance by shareholders.  But there is good reason to be cautious, the source added, noting that “with the rare exception of Mulally himself there isn’t much of a history of successfully bringing outsiders into the auto industry.”

The list of failures includes former GM President Ron Zarrella, who came from and eventually returned to Bausch & Lomb, and one-time Chrysler CEO Bob Nardelli, the ousted chief of Home Depot.

Current General Motors Chairman and CEO Dan Akerson came from the telecommunications industry but it is too early to determine how his tenure will eventually be viewed.

Mulally himself has suggested that his success is the result of similarities between the aerospace and automotive businesses.  Others credit his unique skills at convincing an otherwise fractious management team to work together for the corporate common good.