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Contrary to rumors and reports Ford CEO Alan Mulally will not be leaving the American automaker to take over as Microsoft CEO.
According to filings with the U.S. Securities and Exchange Commission, this top executive award is part of an incentive plan that’s tied to Ford’s 2009 performance. Mulally hit nearly all of his performance targets that year.
Ford Spokesman Todd Nissen explains, “Our compensation philosophy is to align the interests of our leadership with those of our shareholders. Ford’s stock was $1.96 a share at the time of the 2009 awards, and is over $12 a share today. That is a more than 500 percent increase, which benefits all stakeholders in the Ford turnaround.”
During UAW negotiations last year, Mulally’s compensation package had gone under scrutiny when Bob King, the union president, judged Mulally’s $26.5 million pay package as “morally wrong” when some Ford workers received a more modest wage of $15 an hour. However, the talks settled when Ford workers received contracts with signing bonuses higher than what GM or Chrysler offered.
From 2006 through 2008, Ford suffered $30.1 billion in losses. Yet despite Ford shares trading as low as $1.01 in November 2008, Ford opted not to go down the path of a federal bailout. Under Mulally’s leadership, Ford rebounded to earn $29.5 billion in the past three years.
In 2010, Mulally’s compensation increased by 48 percent to $26.5 million and last year, Ford awarded Alan Mulally with $56.6 million in stock. A proxy report will reveal Mulally’s compensation for 2011, including salary and benefits. No doubt, he’s making money like a boss!
Ford CEO Alan Mulally isn’t on his way out, though succession plans are being considered according to a top Ford executive.
Mark Fields, Ford‘s president of the Americas, emphasized the importance of developing a succession plan, despite there being no plans for Mulally’s retirement. Fields, who is one of the candidates to move into the position said ”It’s something we’re all very committed to, and there will be great opportunities within Ford,” in an interview with the Detroit News.
Mulally is nothing less than an icon at Ford, and in the automotive world overall. He is credited with piloting Ford through the economic storms of the last decade and successfully leading the company to being the only member of the big three to decline a bailout.
That success came with heavy debt, but the company seems to be have effectively avoided disaster and found their way back into growth. That success got final affirmation last Friday when the company officially announced plans to reinstate cash dividends for their stock, effective in January 2012.
Restoring dividends “gives a lot of encouragement to our employees, our stockholders and our communities that we’re going to stay focused and move the business forward,” Fields said.
The company originally planned to wait until their credit rating was restored to investment grade. In light of strong sales and consistant growth Ford executives decided to move forward despite Moody’s and S&P upgrading them to one notch below investment grade.
[Source: Detroit News]
Ford is currently denying reports that an external CEO successor search is underway, but it appears that Ford Chairman Bill Ford Jr. discussed the possibility to “survey the external environment for potential candidates as a regular course of action.”
We reported earlier that Four currently has four candidates internally to succeed Alan Mulally, Ford’s current CEO. But now the Wall Street Journal is adding two former Ford executives into the mix, John Krafcik who is CEO of Hyundai Motor Co.’s North American operations and Phil Mortens, CEO of Novelis Inc.
Ford however is adamantly denying the consideration of Krafcik or Mortens – or any external candidate for that matter. But whoever it may be, they’ll be stepping into some really big shoes, as Mulally has been undeniably successful in making Ford profitable yet again, with Ford making money for 10 straight quarters.
[Source: Automotive News]
The replacement for Ford‘s current CEO Alan Mulally will likely come from within, and four contenders have come out on top despite no realistic timeline for someone to replace Mulally.
Those four contenders include Mark Fields, the president of the Americas and current frontrunner (age 50), current CFO Lewis Booth (age 63), Jim Farley, group vice president of global marketing, sales and service (age 49), and Joe Hinrichs, group vice president of Ford Asia Pacific and Africa (age 45).
The talk of a CEO successor for Alan Mulally is probably premature, as his success in Ford will allow him to leave on his own terms, when he wants. But at age 66, Ford’s board of directors has to realistically begin to consider successors. One thing is for sure, Ford will be promoting from within rather than hiring from the outside – as they did with Mulally – in order to send a message of stability. Another option that Ford is considering is that Mulally could act as a mentor for Ford’s future leader.
[Source: Automotive News]
Ford may begin building electric cars in China via joint ventures with Chinese auto makers, replicating the tactics of rivals like General Motors and Daimler AG, parent company of Mercedes-Benz. China is looking to add 1 million EVs by 2015 as part of an effort to curb emissions and the dependence on fossil fuels.
Ford CEO Alan Mulally was in China for the groundbreaking of a new engine assembly plant with local partner Changan Automobile Group, part of a $1.6 billion effort to build four new factories in China. Mulally expects China to play a key part in boosting Ford sales by 50 percent by 2015, and Ford’s Lincoln brand may become part of that strategy, as Chinese demand for luxury cars is rapidly growing.
[Source: The Detroit News]
Ford is opening the floor to 2011′s contract negotiations with the United Auto Workers—which always ends in suspense.
Will the UAW walk away in anger? Will they threaten a strike? Will Ford shut down a couple more plants and idle production for months on end? Or will the ghost of Henry Ford send in the Pinkertons? It’s all up in the air, which makes for breathlessly thrilling news. Hey, automotive journalists have to keep themselves entertained somehow.
“We are reflecting upon our proud 70 year history of working together—a history of working with mutual trust and respect to effectively address difficult business challenges,” said John Fleming, vice president of Ford’s labor relations. ”We are committed to negotiating this year with the same transparency and honesty we always have upheld.”
Ford‘s success streak rolls on, with the latest good news for the automaker coming as recognition of its leadership by Chief Executive magazine. The publication has announced Ford boss Alan Mulally is its 2011 CEO of the Year.
Nominated by magazine readers, the top 10 picks were then chose and the title decided by a committee of peers. With the award Mulally joins the ranks of past winners like Bill Gates, Jack Welch, Michael Dell, A.G. Lafley, John Chambers, Anne Mulcahy, Larry Bossidy, Andy Grove and Herb Kelleher.
Those same peers had plenty of accolades to bestow upon Mulally with the announcement of his win.
“The turnaround and triumph of Ford is an amazing success story, due largely to his talents, leadership and courage,” said Monsanto CEO Hugh Grant, winner of last year’s prize “It’s a turnaround not only of an American icon but more importantly, a global icon, as well.”
“The success he showed in the face of incredible difficulty was just extraordinary,” said James Turley, chairman and CEO, Ernst & Young. “The foresight he showed throughout the process, the courage he showed in making some tough decisions on popular brands, the global mindset he showed, and above all, the statesmanship he showed when two major competitors were on the public dole shows he was thinking for the good of the country as well as his company and industry.”
Mulally will be the guest of honor at a private event at the New York Stock Exchange in July.
Things have been going well for Ford over the past few years with increased profits, sales and market share, but you haven’t seen nothin’ yet says CEO Alan Mually. Speaking this morning on CNN’s American Morning, Mulally said the automaker is looking to increase sales globally by an incredible 50 percent.
The plan to achieve this goal relies mostly on emerging markets, which Ford will target with an increasing number of small vehicles. According to Mulally, half of Ford’s global lineup will eventually be small cars. Over the next few years the Blue Oval will expand its Chinese lineup from five to 15 vehicles, while its lineup in India grows from three to eight vehicles. In total, Ford expects that by 2020 emerging markets in the Asia-Pacific region and in Africa will make up one third of its global sales, compared to just 15 percent now.
In addition, Ford will continue to rely on strength and growth in established markets. Currently global sales are down 30 percent from highs recorded before the recession, indicating there’s plenty of space to grow again.
Ford’s global sales tally for last year totaled 5.3 million units. If it can achieve a 50 percent growth strategy it would raise Ford close to the 8 million mark where Industry leaders like GM and Toyota sit.
The next CEO of Ford Motor Co. probably will be a company insider, Executive Chairman Bill Ford Jr. said Friday. The current Ford CEO is 65-year old Alan Mulally who is still performing and has no plans of retiring just yet.
Ford Jr.also explained that it would be “very unusual” if Mulally’s replacement came from outside. The executive chairman went further into detail explaining that Mulally holds “Business Performance Review” meetings once a week, to encourage executives from different sections of the company to participate and learn about the business as a whole. The meetings are also designed to help “train the next generation” of leadership for the company.
[Source: Detroit News]
UAW President Bob King said that the union may abandon their tactic of targeting one automaker during contract negotiations and negotiate with Chrysler, Ford and General Motors at the same time.
The UAW previously targeted one automaker during negotiations and used that to set an example for the others. However, King says that the relationship between the Big 3 and the UAW is better than previous years. King would like a deal to be completed before the union’s contract expires on September 14th.
King is hoping to extract concessions from the Big 3 after workers gave up thousands of dollars worth of compensation during the automakers lean periods. The resurgence of the Big 3 has spurred some union members to demand King take a more aggressive tone with the automakers. King previously criticized Ford for offering CEO Alan Mulally a $26.5 million compensation package, calling it “morally wrong”.
[Source: Detroit Free Press]
UAW chief Bob King slammed Ford CEO Alan Mulally’s $56.5 million stock package, claiming that “I don’t think any human being in the world deserves that much money.”
While certain to raise the ire of Ayn Rand fanatics everywhere, King is amping up the rhetoric ahead of the United Auto Workers “bargaining conference” where strategies will be outlined for the upcoming labor negotiations with Ford and other automakers. King’s rhetoric was particularly inflammatory and reflected the unions hard left leanings, with King quoted as saying “…It seems like one individual is getting all the gains instead of gains being shared by everybody.”
Ford’s stock was up 68 percent in 2009, with share prices quadrupling in 2008. Ford spokesman John Stoll told Bloomberg that Mulally’s compensation “…reflects Ford’s goal of retaining a world-class CEO.”
For all the hype surrounding the Fiat 500, Ford‘s CEO, Alan Mulally, has become one of its most prominent detractors, condemning the car to failure before it’s even launched.
Speaking to the Italian language magazine Panorama, Mulally remarked “I do not see large market in the U.S.A. for a smaller car than the Fiesta. Those that tried failed.”
While Mulally declined to comment further, it’s not unreasonable to expect such comments coming from the head of a rival firm. Not to mention, the Smart ForTwo has enjoyed dismal success in America, with sales dropping to a fifth of their highest levels in 2008.
Finally, somebody in top brass gets it. When CEO Alan Mulally oversaw the development of the Explorer upon taking charge of Ford in 2006, he ordered engineers to cut weight and improve fuel economy, or kill the Explorer altogether.
“Alan told us we need to truly reinvent the Explorer,” said product development chief Derrick Kuzak. When he presented Mulally with the production-ready Explorer in 2009, he didn’t focus on anticipated sales figures or projected profits: he started with how the team had cut 100 pounds and raised fuel economy by 24 percent, the best in its class.
And by January, the dieting paid off–Explorer sales were up by 73%.
Automotive enthusiasts (and the part of Lotus’s marketing division that doesn’t keep Colin Chapman’s grave spinning at night) have championed this for years. Coming from Ford’s top man, however, puts a little more meaning behind those words. Mulally has ordered that all Fords introduced within the next 10 years must be 250-750 pounds lighter than their predecessors. And as a result, if any vehicle can’t have the best fuel economy in its class, it’s killed off.
“Weight is absolutely critical,” says Mulally, who views weight savings from a fuel economy standpoint. Already a version of the Explorer is being planned with the EcoBoost turbocharged 4-cylinder engine, which may get as much as 29MPG highway. And the Mustang will get the EcoBoost engine as well. So enthusiasts will appreciate this from a performance and handling mindset, but with such an aggressive weight-cutting proposal, everybody wins.
Ford CEO Alan Mulally told an audience that he finds it difficult to justify the cost of composite materials like carbon fiber, and that steel and alloys still have a place in automotive production.
“We cannot make a business case for composites in the auto industry,” Mulally, formerly CEO of Boeing, said after a speed at the Wings Club aviation forum in New York. Boeing was a pioneer of composite material on their airliners, including the 787 jumbo jet.
Mulally cited the cost of ovens needed to bake carbon fiber and other composites as exceedingly expensive, and difficult to justify financially.
While Ford‘s decision to cut the Mercury brand from its lineup makes good business sense, the long term benefits come with a more immediate down side. In an increasingly competitive market, by eliminating the Mercury brand Ford is also potentially eliminating 92,299 sales.
According to Edmunds.com CEO Jeremy Anwyl, Ford should keep roughly two-thirds of Mercury customers. And as much as Ford would like to see those customers headed to Lincoln showrooms, they are more likely to downsize their aspirations and stick to the Blue Oval. Most Mercury customers already cross-shop with Ford branded vehicles.
Adding to the swing towards Ford and away from Lincoln is FoMoCo’s push to transform Lincoln into a true premium brand, market it as such and then build a reputation in the marketplace. That won’t be easy, as the folks at Cadillac will tell you. With a vastly improved offering of products, Cadillac still can’t seem to grab hold of traditional German sedan buyers.
Making Ford’s risk even bigger is the fact that Lincoln is already an insubstantial brand, selling roughly half as many units as Mercury. So far this year, Lincoln has managed just 37,444 in sales, compared to 52,997 for Cadillac and 90,098 for Lexus.
The plan says Ford CEO Alan Mulally is to do with Lincoln what the brand company has done with the Ford brand over the past few years. Initially that seems all but impossible as Lincoln models continue to ride of platforms created for Ford models and are in many ways just rebadged and gussied-up Fords. Then again, marketing can go a long way to change a brand’s perception and few automakers have achieved the marketing success that Ford has over the past several years, whether in regards to EcoBoost or the new Fiesta.
[Source: Automotive News]
Ford posted a $2.1 billion profit for this quarter, beating market expectations by a full year despite a lull in the new vehicle market. Ford has undergone a series of cost-cutting measures, including plant closures and layoffs, but has also introduced a torrent of new product in nearly every segment.
Ford hasn’t earned $2 billion profit since 2004, when the company sold 17 million vehicles. Expectations for this year include sales of fewer than 12 million cars and trucks. Ford’s strong performance has been attributed to a number of factors. New products like the Fiesta, Mustang, Edge and Fusion have been extremely well received by the automotive press and well as consumers. Sales of the full-size Taurus are up 96 percent from the previous generation. Ford’s image has also remained strong, as it avoided taking government loans (unlike rivals GM and Chrysler), and avoided the quality problems that have plagued Toyota.
However, Ford’s executive chairman told the New York Times that the success of the company was attributable to its own strengths, not the weaknesses of its competitors.
“I don’t know how much it really helped because it’s all about the product,” Mr. Ford told reporters after a speech in Detroit this month. “People will come into our showrooms but if they don’t see anything they like, they’ll go elsewhere.”
Ford Motor Co. has announced it has reached a final agreement to sell its Swedish Volvo brand to China’s Geely Holding Group. The sale price is set at $1.8 billion, a fraction of the $6.5 billion Ford paid to buy Volvo back in 1999. The sale of the Volvo brand completes Ford’s corporate strategy to sell-off all its luxurious European brands. In 2008 Ford sold the Jaguar and Land Rover brands to India’s Tata Motors for $2.3 billion, while in 2007 the divestiture began with the sale of Aston Martin for just under one billion. These strategic moves are partially to credit for Ford’s ability to stave off bankruptcy during the recent recession.
“Volvo is a great brand with an excellent product lineup. This agreement provides a solid foundation for Volvo to continue to build its business under Geely’s ownership,” said Ford president and CEO Alan Mulally. “At the same time, the sale of Volvo will allow us to further sharpen our focus on building the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world.”
Li Shufu, chairman of Zhejiang Geely Holding Group Company Limited, commented in a statement that, “Zhejiang Geely would like to pay tribute to Ford’s stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely.”
For its part Ford will continue to provide Volvo with certain components (including powertrains) for a limited time, although it will retain no part of the Volvo Cars company. Ford has also agreed to provide support in the form of engineering, tooling and information technology. Both Ford and Volvo have agreed to certain rules regarding intellectual property. The deal is subject to regulatory approval.
“The Volvo management team fully endorses Ford’s sale of Volvo Cars to Geely. said Stephen Odell, CEO of Volvo Cars. “We believe this is the right outcome for the business, and will provide Volvo Cars with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future.”
Official release after the jump: