Good News. There's Speculation of a Ford CEO Succession Plan
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“You can’t go! All the plants are gonna die!” – John Winger, Stripes
Progress Report: Ford Motor Co. (NYSE: F), first mentioned December 30, 2011 (“My First Crush of 2012”), with a closing price of $10.76 per share, slightly lower than flat (down about 3%).
I have publicly posted, for all to see, my opinion of Ford President and CEO, Alan Mulally. The terms, “man-crush,” “bromance,” and a few others have been mentioned on occasion. So obviously, as an investor in the company that the former Boeing engineer presides over, I had my concerns with the collection of recent reports speculating on his retirement at the end of 2013. Here we are, barely 6 years after then-CEO (and great-grandson of Henry Ford), Bill Ford, stepped down and hired Mulally, we are receiving word from numerous sources that our time together is slowly coming to an end. And yet there’s still so much left to accomplish.
Many of these stories suggested that succession plans were in place, a majority of them naming Mark Fields as the next in line to replace Mulally. Fields, who has been in charge of the North American arm of the business unit since 2005, recently was promoted as Chief Operating Officer, an unmanned position in the company since Mulally took the top spot in 2006. Fields started his career with Ford in 1989, so he has been through the tough times the company has weathered for over a decade, and as COO, should know all too well the challenges that lie ahead. The overwhelming school of thought is that Mulally is the main reason the company avoided bankruptcy and refused a government bailout, essentially rescuing the company and ultimately restoring the dividend (1.9% yield). Some even speculate that Mulally will remain on the board as a “nonexecutive chairman” once the torch has been passed.
But as I watched Mulally on a CNBC interview recently, and hearing him utter the words, “I love serving as CEO of Ford…” beaming all the while, I couldn’t help but wonder if this was simply an attempt to cast rumor and speculation as “news.” Many companies have “succession” plans in place, and the most successful ones ease the transition process by internally “naming” that successor, basically creating a co-CEO, and hopefully the student-teacher process results in a seamless switch. It has worked well for Apple (NASDAQ: AAPL), although the circumstances were quite different, but one can only begin to imagine what current CEO Tim Cook witnessed working side-by-side with the legendary Steve Jobs. Their stock is up over 85% since Jobs stepped down and Cook flawlessly moved into the leadership role.
So with word that Mulally is loving life serving as Ford’s CEO, and apparently Mark Fields will be sliding into the “number-two” role, under the tutelage of the man that righted the Blue Oval, the exact timetable is still uncertain for any “succession” plan. Fields has been working under the “new” management style for 6 years now, and it looks as though he will get a closer look as to what life is like from the Dearborn corner office. I applaud Ford for taking steps toward a positive arrangement, rather than slip and stumble through difficult times with 5 CEOs (2 were Interim), in a three-year span, like Yahoo! Inc. (NASDAQ: YHOO). Yahoo’s stock performance is defiantly up over 20% since Carol Bartz took over for co-founder Jerry Yang in 2009, but it has been a tumultuous trip, and I think they have finally landed a solid leader in current CEO, Marissa Mayer. I hope that she, like Mulally, will be around for a while.
Know What You Own
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Motley Fool blogger Kyle Metivier has long positions with Apple and Ford, but owns no other company mentioned. Motley Fool newsletter services recommend Apple and Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
