Alan Mulally, former president and CEO of Boeing Commercial Airplanes, may not seem like the most obvious choice to head up Ford Motor Co. Cars, after all, are normally supposed to keep their wheels on the ground at all times.
But it's great to see an engineer's engineer (as he often has been described in the press) picked to head up a major product design company. Wow, what an incredibly novel idea!
Assuming that the mess Ford has gotten itself into isn't completely irrevocable, Mulally, with his engineering skills, ability to manage large and complex projects, and shrewd sense of future market trends, may just be the guy, maybe the only guy, who can turn things around at the ailing automaker.
Over the years at Boeing, he demonstrated an amazing ability to buck conventional thinking and develop revolutionary new products. Beginning in 1969, he was involved in the development of nearly every new aircraft, starting with the 727.
Boeing's situation in the late 1980s was not so different than Ford's quandary now: The economy was weak, growth in passenger traffic was stalled, and many airlines were in dire straits financially. Boeing was also facing a formidable challenge from the Airbus consortium, which had gobbled up 30 percent of the market share over the past decade. Not exactly a time to bet the company on a new airplane, especially with a design based on future predictions about air traffic, but that's exactly what Boeing did with the 777.
Thanks in large part to Mulally's leadership and imaginative oversight of the development effort, the 777 the first all-new jetliner from Boeing in almost a decade was a huge commercial success. From there, the intrepid engineer went on to lead the Commercial Airplanes team in a financial turnaround. Then, while rival Airbus was focusing on high-capacity planes, Mulally bet the farm again on a medium-size plane the 787.
Take note, Ford: One of the biggest selling features of the plane is its fuel economy. Along with other U.S. automakers, Ford has come under fire for its dependence on sales of gas-gulping SUVs and failure to develop viable alternatives to the internal combustion engine. As gas prices trend downward, the jury is out on whether most Americans would actually be willing ever to accept the trade-offs inherent in a fuel-efficient vehicle. But Mulally has proven to be amazingly canny at predicting market trends not just years, but even decades out.
So the real question of whether Mulally can achieve a turnaround really comes down to this: Will Ford's shareholders allow him the time (and budget, it cost $5B to develop the 777) to pursue a true, long-term product development strategy? If not, the road to short-term profitability will turn out to be a dead end for Ford, no matter who's at the top.
kfield@reedbusiness.com
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