Ford Motor Company CEO Alan Mulally Ends Job Speculation Ahead of Detroit Auto Show

The media has speculated endlessly over the last few months regarding Alan Mulally's intentions for 2014: Will he stay? Will he go to Microsoft? Will he retire early? Finally, Mulally puts the speculation to rest, and just in time.

Jan 8, 2014 at 5:29PM

Alan Mulally with Ford's most profitable vehicle, the F-Series truck. Photo credit: Ford

Ford (NYSE:F) CEO Alan Mulally orchestrated one of the greatest business turnarounds in recent history. It took years, and he once said that the process was more difficult than the challenges Boeing, the company he helped lead before his move to Ford, faced after the 9/11 attacks. Mulally took the helm at Ford in 2006 and began changing the vicious corporate culture left over from its early days, yet Ford posted losses that totaled more than $30 billion between 2006-2008. Shortly after, however, Ford was able to post profits in 2009 while its crosstown competition pleaded for a lifeline from the government. The good news for investors is that Mulally has finally ended speculation about leaving Ford early.

Intense speculation
Over the last few weeks the media has created intense speculation about Mulally being a top CEO candidate for Microsoft (NASDAQ:MSFT), even if it didn't make sense. But Mulally, 68, did surprisingly little to squash the intense rumors, which had become a distraction as Ford was preparing to unveil two of the company's most important vehicles: the 2015 F-150 and Mustang. 

The distracting speculation wasn't going to disappear without some type of definitive response,  which was announced yesterday: "I would like to end the Microsoft speculation because I have no other plans to do anything other than serve Ford," Mulally told the Associated Press in an interview.

Mulally, by finally putting the speculation to rest, removed enough uncertainty from the market that Ford's stock rose the same amount that Microsoft's fell in early trading: 1.3%.

While I can understand removing this uncertainty is beneficial for potential investors, it wasn't high on my list of things to worry about as a long-term Ford shareholder. Mulally has changed Ford in ways that should last long beyond his tenure at the Blue Oval, and his team has spent time grooming the company's next CEO, likely Mark Fields, to take over seamlessly when the time comes.


Photo credit: Ford

Now the question turns to whether or not Mulally will stay beyond 2014. More clarification will emerge as 2015 nears, but what is more important is that Mulally can now finish what could be his final year at Ford by helping the company handle its most aggressive vehicle launch schedule in company history. Ford will launch 23 all-new or significantly refreshed vehicles across the globe, more than double the 11 global launches last year.

Mulally certainly has the chance to end his tenure at Ford on a high note. It's possible we could see another increase in the company's dividend shortly. It's likely that this year investors will see Ford reach another annual record for sales in China, and it's possible we could see the company reach its goal of 6% market share in the country a bit early if things go well. It's also probable we'll see further improvement in European operations as the company nears its goal to break even, or make a profit, in the region in 2015. Regardless of all the possibilities in a year so fresh, the 23 global launches Ford has planned for 2014 should set the company up for revenue growth throughout the decade.

When Mulally finally hangs up his hat for good, it'll be a bittersweet day for Ford and its investors. At least Ford investors have 2014 to spend with the industry's best CEO and plenty of positive catalysts. 

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Fool contributor Daniel Miller owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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