- The Washington Times - Wednesday, September 6, 2006

DEARBORN, Mich. (AP) — When Bill Ford decided that his family’s company needed more leadership than he could offer, he started looking for someone who had successfully fixed a large but troubled manufacturing company.

He wasn’t sure there was such a person, but as he asked around, one name kept popping up: Alan Mulally, executive vice president of the aerospace company Boeing.

But Mr. Mulally, 61, who is credited with straightening Boeing Co.’s flight path in the dark days after the September 11, 2001, terrorist attacks, was unwilling to leave a company he had served for 37 years.

“I resisted,” Mr. Mulally said at a Tuesday press conference at Ford Motor Co.’s world headquarters in Dearborn, Mich.

Eventually, though, the 49-year-old Mr. Ford prevailed, convinced that Mr. Mulally had the right experience to lead Ford’s young management team through the troubled and uncertain times that lie ahead.

On Tuesday, Mr. Ford introduced Mr. Mulally as the new president and chief executive officer of the nation’s No. 2 automaker. He will work in transition between the two companies through September and hopes to be fully on the job by the beginning of October.

Ford shares rose 16 cents, or 1.9 percent, to close at $8.55 yesterday on the New York Stock Exchange. Its shares have traded in a 52-week range of $6.06 to $10.20.

Mr. Mulally was widely praised for being a key architect of the resurgence of Boeing’s commercial airplanes unit over the past several years. He was a top candidate for the Boeing CEO job last year, but the company went outside to select aerospace veteran Jim McNerney, chief executive officer of 3M Co.

While acknowledging he is not an auto authority, Mr. Mulally said: “I’m certainly a product designer and I care deeply about having a viable business.”

He said Ford and Boeing have much in common, producing products that need long lead times for development. Both industries also are heavily affected by fuel prices and foreign competition.

But he said during the past 15 years at Boeing, the company was able to trim its product line from 14 airplanes to four, and those four do the same job more efficiently than the 14.

Mr. Mulally, who drives a Lexus, said he took the job partly because there are people who believe the United States can’t compete with the rest of the world in manufacturing.

“I personally think we absolutely can if we pull together,” Mr. Mulally said.

Mr. Mulally will have autonomy as CEO, and as he learns more about the restructuring, he will decide which areas to emphasize, Mr. Ford said.

He expects Mr. Mulally to work with Mark Fields, Ford’s president of the Americas, on the turnaround, which Mr. Fields has been heading.

Bruce Clark, lead auto analyst at Moody’s Investors Service, said Mr. Mulally faces a “daunting task in attempting to reshape Ford’s operating model” as demand shifts rapidly away from trucks.

“However, he comes to the company with a strong background in engineering, manufacturing and product development,” Mr. Clark said. “We think that this will be a valuable skill set as he fills the CEO position at Ford.”

Mr. Mulally was popular within Boeing and the aerospace industry for a personable, gregarious style and a thorough knowledge of the business. Even Boeing’s unions, despite frequent criticism of management, praised him.

Peter Jacobs, a Seattle analyst for Ragen MacKenzie who covers both Ford and Boeing, said Mr. Mulally was a good choice to make the industry leap because he has dealt smoothly with complex manufacturing processes, labor relations and an international supply base.

“Other than the fact Alan’s going to be focusing on automobile manufacturing as opposed to airplane manufacturing, pretty much all the things that he has done to make Boeing’s commercial airplane business a success he can apply to the challenges and issues that Ford is facing right now,” he said.



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