Daunting Maiden Flight for Ford’s Mulally

Ford Motor promised bold moves – and hiring a CEO with no auto industry experience certainly qualifies.

Alan Mulally, a 37-year veteran of the airliner business, takes over CEO duties from Bill Ford at a pivotal time for the struggling auto maker.

Mulally is credited with helping pull off a successful recovery for Boeing, but he is a neophyte when it comes to the auto industry.

A month ago, the former Boeing executive was quoted as saying it is possible to apply automotive assembly line manufacturing techniques to the airline industry. Now he is poised to apply his airline industry turnaround tactics to a foundering Ford.

The learning curve he faces is as daunting as the maiden flight of a new plane.

He leaves an industry where individual sales are huge transactions, long in the making, with millions changing hands for a handful of units (Boeing sold about 250 aircraft last year). The buyers are few and powerful and product has a 20-year lifecycle.

In his new job, Mulally must tap into the psyche of an industry that sold more than 17 million units in the U.S. alone last year.

The product must appeal to the everyman. Marketing and sales decisions must play to all demographics and product cycles are only about four years.

Short-term decisions must be made such as whether to offer a new incentive over a long weekend.

Long-term decisions on future product require a CEO-eye’s view of the industry when lower-ranked advisors are personally attached to their ideas and projects.

“I can’t wait to become a car guy,” Mulally said in his first press conference in Dearborn, expressing equal enthusiasm for driving a Ford as well.

The Lexus he owned coming into the job is one of the reasons he cannot take time to get up to speed.

Toyota (including Lexus) sales in the U.S. passed Ford for the first time in July to rank, temporarily, as the No.2 auto maker.

Ford sales and profits continue to fall, necessitating an acceleration of the Way Forward restructuring plan for North America. Details of further cuts dominated Mulally’s first board meeting – truly baptism by fire.

In terms of product, it will be several years before the impact of a new CEO can be felt. But the impact of a turnaround artist can reverberate immediately.

It was no secret Bill Ford had been scouring the automotive terrain for a CEO, and when none of his advances panned out, he looked outside the industry.

Wall Street responded to news of Mulally’s appointment with an upward blip – a collective sigh that finally Bill Ford, long thought to hold too much responsibility and perceived as out of his element, was abdicating some control.

But there is understandable angst in an industry that doesn’t always embrace outsiders.

Mulally comes across, at first blush, as an intelligent engineer, experienced businessman and team player.

But the reality is, he starts his career at Ford as a square peg in a round hole.

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