Exclusive - Ford board open to earlier exit for CEO Mulally -sources

Reuters

By Deepa Seetharaman and Bernie Woodall

DETROIT (Reuters) - Ford Motor Co Chief Executive Alan Mulally, credited with driving a culture change that helped save the No. 2 U.S. automaker, may step down sooner than planned, according to people with knowledge of the matter.

Under a succession plan outlined late last year, Mulally, 68, was expected to stay on as CEO until at least the end of 2014. But Ford's board of directors is now open to letting him step down earlier as he explores other roles, two people familiar with the board's thinking said.

This shift underscores the board's growing confidence in the executive team's ability to avoid the missteps that pushed Ford to the brink of collapse before Mulally was hired in 2006. The board has also warmed to Chief Operating Officer Mark Fields, a 24-year Ford veteran who is widely expected to be the next CEO, according to sources.

Under these circumstances, the board is willing to let Mulally determine the timing of his potential exit, the sources said. Mulally is considering another high-profile job to follow up his tenure at Ford, they said, adding that he had discussed a role in the Obama administration at one point.

Mulally's name has also been floated as a possible successor for Microsoft Corp Chief Executive Steve Ballmer, who said in late August that he would retire within a year.

The sources spoke on the condition of anonymity because details of Ford's succession plan are confidential.

When Reuters asked Mulally about his plans, he replied in an email that he is "absolutely focused on serving our Ford."

"We are having so much fun creating an exciting, sustainable, and profitably growing Ford for everyone," Mulally said in the email.

'DOES EVERYONE BEHAVE?'

Seven years ago this week, Ford poached Mulally from Boeing CO to revive the automaker, which lost $12.7 billion in 2006. At the time, Ford was marred by what Chairman Bill Ford has described as a culture of "empire-building and back-biting."

Mulally is credited with creating a more open, collaborative atmosphere that allowed problems to be tackled more quickly. He arranged for Ford to borrow $23 billion and instituted a plan, dubbed "One Ford," to simplify and unify product development.

As a result, the automaker was able to avoid bankruptcy and the federal bailouts needed by its U.S. competitors, General Motors Co and Chrysler Group LLC, in 2009.

The Ford board has been considering succession plans for several years as part of its normal review. One concern is cultivating a CEO who can maintain and strengthen the cultural and strategic changes created by Mulally.

"The question is, when you have such a powerful luminary like Alan walk away, does everybody behave?" Guggenheim Securities analyst Matthew Stover said. Stover said he does not expect Mulally to stay at Ford through the end of next year.

Fields, 52, led Ford's operations in North and South America from October 2005 until late last year, when his promotion to COO led many analysts and investors to view him as Mulally's anointed successor.

As COO, Fields now runs the weekly business review meetings that have been one of the most visible signs of cultural change instituted by Mulally. Meanwhile, Mulally has been stepping back as he weighs his options, the sources said.

(Additional reporting by Soyoung Kim in New York; Editing by Tiffany Wu and Tim Dobbyn)

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