This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Alan Mulally's Last Act at Ford: Change the World Again

DETROIT ( TheStreet) -- Some people coast easily into retirement, but it doesn't appear that is the course Alan Mulally has selected.

Rather, for his final act as CEO of Ford (F - Get Report), Mulally took on a major job: reducing the weight of America's best-selling vehicle, and perhaps eventually of all U.S. vehicles, by substituting aluminum for steel. It is not a task for which he is unprepared. At Boeing (BA - Get Report), where he spent 37 years, Mulally presided over the start of a similar transformation when he ushered in the 787 Dreamliner.

Mulally departed Boeing, where he was passed over for the CEO job, before implementation of the production plan was completed. By many measures, the implementation was disastrous, resulting in billions of dollars in cost overruns and a three-year delay in delivery of the first aircraft.

I can imagine asking Mulally, in an interview, if he would take particular pleasure in having Ford get the implementation right after Boeing got it wrong. He would just stare at me. He might smile. He would never answer.

Must Read: GE Investors Watch Earnings for Industrial Margin

"Alan would have been an amazing Boeing CEO," said aviation consultant Richard Aboulafia of Virginia-based Teal Group. "He would have loved doing that job. But (Ford) involves a similar skill set."

Mulally was deeply involved in the decision to make the 787 from composite materials. "He's quite mindful of the importance of saving weight with better materials," Aboulafia said. "He is someone who has, in his DNA, the ability to make the strategic decisions involving strength, weight and cost."

Trained as an engineer, Mulally was program manager for the Boeing 777, "one of great American industrial success stories of the past century," before he took on the 787, Aboulafia said. As plans for the 787 took shape, Mulally faced "the opposition of people who didn't want to spend the cash," the McDonnellDouglas people who came to dominate Boeing following the 1997 merger.

"My take was that he could either launch a program that was heavily outsourced and deeply flawed, where the responsibility for design devolved onto the partners, or he could not launch at all," Aboulafia said. "He was forced to do outsourcing because the alternative was to do nothing. He had a gun to his head."

It is different at Ford, where the chairman and the board of directors back Mulally, who is surrounded by a management team he assembled. It is "probably the strongest team I've ever been associated with in all my 43 years," Mulally said at an investor conference on Wednesday, "The transparency, the honesty -- it's changed all of our lives. Everyone has felt the value of that. It has served Ford well."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BA $144.17 0.81%
F $14.83 -1.79%
AAPL $121.30 -0.87%
FB $94.01 -1.26%
GOOG $625.61 -1.10%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs