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Alan Mulally Must Retire as Ford CEO Today

Douglas A. McIntyre

It is time for Alan Mulally to leave the CEO job at Ford Motor Co. (NYSE:F). Not in a month, or a few months, but now. Several media figures have pointed out that Mulally's ongoing role as a candidate to become chief executive of Microsoft Corp. (MSFT) is not fair to Ford. It is worse than that. It has created a three-ring circus, and Ford does not need to guess if or when Mulally might leave. If the board needs to take a role to encourage his departure, then so be it.

It is easy to replace Mulally right now. Mark Fields, the current chief operating officer, has all the pedigree and experience to take the job. It is assumed he will take it next year anyway. William Clay Ford Jr., the executive chairman, has run the board for years and essentially controls it with his family. Bill Ford almost ruined the company once when he was CEO. He can avoid damaging it again by replacing Mulally with Fields. Fields, at least, can concentrate on running the company.

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Mulally pulled off a miracle when he saved Ford from the effects of the recession and retreat in market share suffered by the American car manufacturers. Ford's share price proves his value -- it is up more than 500% in the past five years. His reputation as one of the great car executives of the past several decades is intact, and it will remain so. However, Mulally was paid tens of millions of dollars for his efforts and cannot claim he was cheated. The turnaround is done, and with it the need for Mulally to run Ford.

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Mulally may end up going to Microsoft, but there appear to be several other candidates, so the process of choosing a CEO could go on. As has been pointed out often, Mulally has no background running a technology company, and he is old -- 68. If Microsoft needs a CEO who can drive it through the next decade, it is hard to make the case that a 68-year-old man is an ideal choice. However, Microsoft might hire him anyway, as a sign it takes the need for a turnaround seriously. In the meantime, as the world's largest software company dithers, Ford's future, at least as determined by top management, has been put on hold.

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Mulally has indicated he will leave Ford next year. But that is too late. His usefulness at Ford has turned into a liability.

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