Ford's CEO Transition Won't Change Its Biggest Problem

By Phil LeBeau, CNBC Correspondent

NEW YORK (CNBC) -- Did you see the market's reaction to news reports on Tuesday afternoon of the Ford board of directors discussing a successor to CEO Alan Mulally?

It was a collective yawn. That's not a commentary on the possibility Ford may move Mark Fields into the job of COO and essentially put him in position to ultimately replace Mulally. (Read More: Ford's Board May Consider CEO Succession Thursday.)

No, the fact shares of Ford (F) stay stuck in the mud like an old F-150 is because investors know two things:

1. Most on Wall Street have expected for some time that Fields will be Ford's next CEO.
2. This management transition doesn't solve Ford's biggest problem, Europe. Sure, as COO Fields will likely take a more involved role in running Ford's European operation.

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Still, he won't be able to do the one thing Ford desperately needs, and wants to do, which is permanently close one or more the company's ten European plants. The labor laws in Europe have Ford, and other automakers, handcuffed. (Read More: More of Europe's Car Plants Will Have to Close - Expert.)

Under Mulally's "One Ford" plan, the automaker's entire management team has been on the same page. In fact, the last five years have been the smoothest for Ford's management in years. And Fields has been right in the middle of that mix.

While he's been president of Ford's operations in North and South America, he hasn't done his job in a vacuum. Mulally has succeeded in tearing down many of the fiefdoms that used to dominate the leadership at Ford. Yes, like any large company, there are still territorial battles but it's far less dysfunctional than it used to be.

That's a tribute to Mulally and a primary reason Wall Street is comfortable with Fields. The good news for investors is that if, and when Fields take over Ford, he's not likely to change how the company operates.

The big challenge at Ford remains the mounting losses in Europe. They're already more than $500 million this year and could eventually reach $1.5 billion this year. (Read More: Ford CEO Mulally Plots Europe Comeback.)

And that is unlikely to change, even if Mark Fields takes a greater role at Ford.



--Written by Phil LeBeau at CNBC

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