Two Reasons Why The Next Ford CEO Is Screwed

alan mulally ceo ford motor
The legendary Alan Mulally

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Ford is set to meet today on a possible successor for CEO Alan Mulally, and Bloomberg reports that Mark Fields is set to be named COO, an indication that he’s next for the top job. Fields has a solid pedigree, he’s been the head of Ford’s operations in the Americas, which have been the company’s most profitable.

However, there are two major reasons Fields or anyone else who gets the top job will have a uniquely tough time.

The first is Alan Mulally’s reputation in the company and the business world. He took over an iconic company in deep trouble, completely restructured it, and led it back to profitability, all without the bailouts required by other American automakers.

Investors may question whether any other executive can continue that legacy.

Secondly, despite all of Mulally’s good works, there are significant issues remaining for the company. Almost the entirety of Ford’s profits came from the Americas. The company has been losing money in Europe amid ongoing economic weakness.

They’ve also begun a $4.9 billion dollar investment in plants in China amid signs of an economic slowdown there, which would have significant consequences for all of the region’s economies. Even with that investment, they’re behind other companies like GM in Asian markets.

A strong American business is nice, but should it weaken, Ford does not have an alternative source of profit to fall back on. That’s exactly the sort of pressure that could make the company to fall behind once again. 

The restructuring process and his reputation gave Mulally a great deal of room to tinker with Ford’s business and change the company’s management.

Should profits or the stock price start to dip, his successor will be unlikely to have the same amount of time and leeway to make an impression on shareholders.

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