Blame Game - Pointing The Finger At Mulally

[Anthony]

http://www.detroitnews.com/story/business/columnists/daniel-howes/2017/05/23/howes-fields-ford-failure-offers-lesson-successor/102034756/

Alan Mulally is credited with saving Ford Motor Co. But planning his own succession? Not so much.

Less than three years after Mark Fields replaced the superstar CEO, the protégé is out of a job. And Executive Chairman Bill Ford Jr. is implicitly criticizing Mulally’s choice for slow decision-making and for failing to quicken a corporate metabolism amid revolutionary change in the auto industry.

Into the breach steps Jim Hackett, the retired Steelcase Inc. CEO and former interim athletic director at the University of Michigan. Among his charges: restoring the culture of teamwork Mulally implemented and left to Fields, only to see it begin to wither as a sagging share price and flattening earnings upped pressure on the c-suite and revealed bad old habits.

 

 

 

LOTS more at the link above.

[MY93SHO]

So it's Mullally's fault Fields didn't learn by example?

 

Not exactly the first time this has happened.

 

I can think of several local examples of the father turning over a successful business to the kid and the kid not having the sense not to screw it up.

[jcartwright99]

Lots of Monday Morning Quarterbacking going on right now! Everybody is analyzing every word of Bill JR and Hackett and then trying to put their spin on why this happened. In my mind it's clear : stock price, stock price, stock price! Once they started questioning Fields, it was clear that he had too many things up in the air without a precise plan of how to implement.

[silvrsvt]

Another good article that sums what I think

 

http://www.businessinsider.com/ford-ceo-mark-fields-pushed-out-because-of-stock-price-2017-5

[Bob Rosadini]

Another good article that sums what I think

 

http://www.businessinsider.com/ford-ceo-mark-fields-pushed-out-because-of-stock-price-2017-5

IMO this article nails it.

 

In particular all of the bullshit and hype that the self serving high tech industry has managed to create and with good success as Detroit runs like lemmings for the cliff.

 

What really scares me is just how much stroke will Hackett have over such proven guys as Hinrichs, Farley and Raj. The guys claim to fame? He is a persuasive cheerleader-and probably has no passion about cars or trucks. And what scare me most, he is the good ol' boy of the Silicon Valley crowd that has created this self driving mystique.

[akirby]

Lots of Monday Morning Quarterbacking going on right now! Everybody is analyzing every word of Bill JR and Hackett and then trying to put their spin on why this happened. In my mind it's clear : stock price, stock price, stock price! Once they started questioning Fields, it was clear that he had too many things up in the air without a precise plan of how to implement.

 

You got the last part right but I think the stock price is just a symptom of that and not the primary reason. If he had a solid plan and was executing and the stock fell due to other factors then I don't think he would have been fired.

[twintornados]

Blaming Mulally for Fields mistakes is like blaming the guy the filled the Hindenburg with hydrogen gas before its trip to New Jersey.

Edited May 23, 2017 by twintornados

[Moosetang]

History nerd alert: This sort of criticism pops up frequently when the leader of a nation or movement dies/retires and their successor fumbles the ball. How many Kings of England, Emperors of Rome, Great Khans, etc have etched their name upon the land only for their successor to utterly crap the bed? It's a long list. After all these millennia, you'd think we'd accept the truth that there is no fool-proof way to prepare a successor, in the end no matter how well trained they must take the helm of the ship and prove themselves. Mark didn't make it, he may have gotten a bit of a raw deal and he also may have legitimately blown opportunities to keep himself in place, but I'm not going to tar Alan for picking the guy he thought could do the job.

[grbeck]

It's my understanding that the "Way Forward" plan had actually been drawn up by Fields, and he played a key role in implementing it after Mulally's arrival. So Mulally's confidence in him wasn't necessarily misplaced.

 

Formulating a plan and helping with its execution are different from leading the entire organization. Apparently, Fields wasn't as effective in the latter role as compared to the former. That isn't Mulally's fault.

[SoonerLS]

I'm also thinking of something one of Bobby Bowden's sons said when they asked if he wanted to succeed his father at FSU--he said no, you never want to be the guy who follows the legend; you want to be the guy who follows the guy who follows the legend. Maybe Fields wasn't the right guy, but anyone who followed Mulally was going to have a tough row to hoe. He left the company in good shape, but he also set the bar pretty danged high.

 

It's not like Fields was an abject failure; he just wasn't meeting the goals the board had. Heck, he oversaw a radical change to the company's flagship product (converting the F150 to 'loomnum), and that was a resounding success. It sure as shootin' went off better than the '96 Taurus Ovalus overhaul...

[Trailhiker]

Could this be more like the Dallas Cowboys, where the owner is really making all the major calls.

[Bob Rosadini]

I'm also thinking of something one of Bobby Bowden's sons said when they asked if he wanted to succeed his father at FSU--he said no, you never want to be the guy who follows the legend; you want to be the guy who follows the guy who follows the legend. Maybe Fields wasn't the right guy, but anyone who followed Mulally was going to have a tough row to hoe. He left the company in good shape, but he also set the bar pretty danged high.

 

It's not like Fields was an abject failure; he just wasn't meeting the goals the board had. Heck, he oversaw a radical change to the company's flagship product (converting the F150 to 'loomnum), and that was a resounding success. It sure as shootin' went off better than the '96 Taurus Ovalus overhaul...

That ugly thing was the work of Sir Alex. I read somewhere he was quoted as saying when shown some of the first designs...."More Ovoid"!

[SoonerLS]

Could this be more like the Dallas Cowboys, where the owner is really making all the major calls.

I don't think so--after all, it was Bill Ford who figured out that he was in over his head and hired Mulally to turn the ship around. That's pretty much the opposite of what Jerry Jones has done.

 

FWIW, I don't think Bill Ford gets enough credit for making that decision when he did. If he waits a few more months, even if he makes the same call, the credit markets are frozen, and Ford ends up in the same boat as GM and Chrysler...

Edited May 24, 2017 by SoonerLS

[J-150]

Fields is the fall guy. No major decision, or indecision, is done without Board approval.

 

They agreed to The Way Forward. They agreed to leading Mazda, COO, CEO of the Americas and CEO of FMC.

 

At any point in the past 10 years the Board could have changed gears on electrics and automation. But tgey accepted the plans provided.

 

I think its time for Bill to finally accept blame for his own mistakes and resign.

Edited May 24, 2017 by J-150

[mackinaw]

I think its time for Bill to finally accept blame for his own mistakes and resign.

 

You're forgetting whose name is on the building.

[J-150]

 

You're forgetting whose name is on the building.

Yeah. But that doesnt mean he is fit to be Chair.

[silvrsvt]

Yeah. But that doesnt mean he is fit to be Chair.

 

I'd say more often than not Bill has been pretty astute with running the company and doing the right thing. The whole thing with Fields is just window dressing to help improve stock prices. There isn't anything "critically" wrong with the company.

[jpd80]

What were seeing here is a PR coup, the CEO was replaced because he wasn'tsaying and doing

what the Fords (Via Bill) and the market wanted to hear and see in action.

 

Ford is an example of a well run motor company that was making good profits even during massive

restructuring for F Series product cycle changes that now almost guarantees that those strong US

profits will continue and provide the funding for emerging technology projects.

 

What Fields forgot to do was feed the media and investors with more meaty details of "the next few years".

The use of "drip feed" details of future project only works with expectant buyers, it does absolutely nothing

to bolster market confidence.

 

Bill Ford couldn't run a cake stall let alone Ford Motor but here we are not three years after Mulally's departure

and he and the board are ready to 86 AM's chosen successor, the guy who did much of the legwork on plans to

save and revive Ford motor. It's disappointing that bill Ford and the Board now want to abandon the relative

stability of the Mulally playbook to go court the stock market with novelty projects that will generate very little

real revenue in the next ten years.

 

Don't get me wrong, Fields had his failings, especially with overseeing model changeovers with serious lapses

in quality, mostly due to supplier issues and most certainly having price stress / cost cutting at the root cause.

Morale certainly took a hit in the last three years and I wonder if this in combination with the rest gave Bill Ford

that same uneasy feeling he had under Jac Nasser - a time when Ford also felt the company was drifting and not

moving fast enough in the right directions.

Edited May 25, 2017 by jpd80

[RichardK]

 

I'd say more often than not Bill has been pretty astute with running the company and doing the right thing. The whole thing with Fields is just window dressing to help improve stock prices. There isn't anything "critically" wrong with the company.

I agree. As said earlier, Bill Ford realized he was not up to the task of running the company on a day to day basis. That is why he pulled Mulally in. Now, he brought Hackett in from the outside. In my opinion, Bill Ford is the visionary.

I am not sure why we are all going through the hand wringing. Apparently, the only major problem is the stock price. Ford is profitable and has huge cash flow. There are many other companies that wish they were in this shape.

[fuzzymoomoo]

Apparently, the only major problem is the stock price.

False. That's only a problem to investors, and really only the short sighted day traders.

[akirby]

I agree. As said earlier, Bill Ford realized he was not up to the task of running the company on a day to day basis. That is why he pulled Mulally in. Now, he brought Hackett in from the outside. In my opinion, Bill Ford is the visionary.

I am not sure why we are all going through the hand wringing. Apparently, the only major problem is the stock price. Ford is profitable and has huge cash flow. There are many other companies that wish they were in this shape.

 

They're profitable now but the current products are getting old and there is not much to report on new things other than some nebulous model E and new Ranger/Bronco in a couple of years. It's ok to let the current stuff slide a little if something new is imminent but that's not the case. Stock price played a part but not the biggest part. Read the other topic about the google deal.

[RichardK]

False. That's only a problem to investors, and really only the short sighted day traders.

54% of the common stock is owned by institutions. This could be pension funds, where the stock value is a big issue. Day traders do not care about value or name of the company. They trade off volatility.

[fuzzymoomoo]

54% of the common stock is owned by institutions. This could be pension funds, where the stock value is a big issue. Day traders do not care about value or name of the company. They trade off volatility.

I'm sorry, but if your pension fund is that heavily invested in such a volatile industry, then your pension fund is being very badly mismanaged.

[akirby]

I'm sorry, but if your pension fund is that heavily invested in such a volatile industry, then your pension fund is being very badly mismanaged.

 

I get matching company stock in my 401K. First thing my management company does every month is sell it. Worst mistake you can make is investing heavily in the company you work for (for retirement purposes). If the company goes belly up you lose your pension and your 401k.

[RichardK]

I'm sorry, but if your pension fund is that heavily invested in such a volatile industry, then your pension fund is being very badly mismanaged.

Pension funds invest for the future and in all manner of companies. I am not sure who these institutions are. This is not just the auto workers, but also teachers, federal workers, and even hedge funds, etc. I am not saying Ford is a great investment for short term gains. However, at this price level it might make a good value play. If it goes back to $18, that is a gain of 63%, plus while you are waiting it pays a dividend of over 5%. You cannot get a 5% yield on on any fixed term investment these days.