I'm a huge sports fan, and I follow the stock market with the same enthusiasm. Rarely do the two have much in common, but recently, as rumors began to swirl that Ford's (NYSE: F ) CEO, Alan Mulally, was at the top of Microsoft's (NASDAQ: MSFT ) short list to replace Steve Ballmer as CEO, it reminded me of coaches in the NCAA. Oftentimes rumors fly around as soon as the Cinderella team makes a run in the NCAA tournament. The coach says all the right things to the reporters, and it isn't until right after March Madness ends that the coach often bolts to the next big opening.
That's eerily similar to the situation we have today at Ford, as the company puts the finishing touches on one of the greatest business turnarounds in history. My response to those hoping that Mulally will take the job at Microsoft: Don't count on it.
It's not a shocker that Microsoft fans would like Mulally on board. In fact, he should make just about any investor's CEO wish-list.
Mulally is a CEO with experience in turning troubled companies around. He landed in Ford's driver seat in 2006 as the company posted more than $30 billion in losses over the next two years -- an absolutely frightening amount -- and steered the company to posting profits in 2009 while General Motors and Chrysler declared bankruptcy. He set forth his "One Ford" vision to restructure the company and hasn't looked back.
The first part of his plan was to "aggressively restructure to operate profitably at the current demand and changing model mix." That's easier said than done, because Detroit automakers had built a terrible reputation over the years for poor quality vehicles; no one wanted to buy Detroit's vehicles. That's no longer the case. For proof, look no further than Ford's hot-selling F-Series, Fusion, Focus, and Escape.
"The domestics are getting really, really good at building small vehicles," acknowledges Fred Diaz, sales and marketing head for Nissan's U.S. division, according to Automotive News.
Also consider that Ford's production is much more efficient and expects 85% of its global sales to come from nine core platforms by the end of this year. In 2007, Ford and rival GM weren't profitable when vehicle sales topped the 17 million mark annually, yet now they can remain profitable at an estimated 10.5 million to 11 million per year.
Ford wasn't even Mulally's first major success. He was given a large amount of credit for helping save Boeing after the Sept. 11 terrorist attacks crushed the aviation industry. That's where I think we can find clues to why Mulally won't take the position at Microsoft.
Boeing and Ford have much in common. As my colleague John Rosevear pointed out, both are manufacturing companies with labor unions, a high fixed-cost base, global regulations, and a competitive industry between major players. The tech industry is just a different world.
Moreover, even with the similarities between Boeing and Ford, Mulally admitted at his first Ford press conference that he resisted Ford's CEO position. He's not a job hopper of the type we often see today; he served Boeing with his full passion for 37 years.
Right now Mulally and Ford are saying all the right things to the media, and I believe it to be the truth. It's been said that Mulally will stay on at Ford at least through 2014. "There's been no change to what we announced in November," Mark Fields, COO since December, told reporters, according to Bloomberg. Mulally, he said, is "absolutely focused on the business, particularly on setting a long-range strategy for the company. He's very engaged."
There are many things striking about Mulally, even noticeable for those who don't know him personally. Those traits include his humbleness, energy, enthusiasm, and ability to lead -- all things that could make a jump to Microsoft possible. Maybe at the young age of 68, Mulally needs one last challenge, but I doubt it. If I'm wrong, I'll gladly eat crow, applaud his successful time at Ford, and as a shareholder wish him the best.
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