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Ford’s Mulally Says Not Retiring as Two Executives Depart From Automaker

February 9, 2012
4 min to read


Ford Motor Co. Chief Executive Officer Alan Mulally, saying he has no plans to retire, said his top finance executive and product-development chief will depart.


Chief Financial Officer Lewis Booth and Derrick Kuzak, group vice president of global product development, will retire April 1, Mulally said today on a conference call with reporters. Booth, 63, will be replaced by Bob Shanks, 59, the company’s controller. Kuzak, 60, is being succeeded by Raj Nair, 47, vice president of engineering and global product development, according to Bloomberg.

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Mulally, 66, denied speculation that he is planning to retire by the end of next year. He has overseen three consecutive years of profits at Ford by focusing on improving quality and adding fuel-efficient models like the Fiesta subcompact. He came to Ford from Boeing Co. in 2006, as the Dearborn, Michigan-based automaker was beginning three years of losses that would total $30.1 billion.


“I read the news release very carefully and I do not find my name in it,” Mulally said of the company statement announcing the retirements of Booth and Kuzak. “I have no plans to retire and I’m absolutely thrilled and honored to serve Ford.”


Mulally declined to say if his successor will be Mark Fields, 51, Ford’s president of the Americas, or Joe Hinrichs, 45, chief of Ford’s operations in Asia and Africa.


Each is considered a potential successor to Mulally, with Fields viewed as the leading candidate, people familiar with the deliberations have said.


“I have read that speculation also and as you know we don’t comment on speculation,” Mulally said of the possibility of Fields or Hinrichs replacing him as CEO.

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“Our plan at Ford is to have a very strong succession plan for every position, including my own.”


Mulally said he is not considering appointing a chief operating officer or an executive to act as his second in command. He said he prefers to have responsibilities divided among regional leaders and executives overseeing specific skills, such as engineering and marketing. He meets with those executives every Thursday in the “Thunderbird room” at Ford’s headquarters for what he calls the “business plan review.”


“We’re all there, we’re all at the table and we’re using everybody’s skills,” Mulally said. “That’s the way we operate and that’s the way we plan to operate going forward.”


Booth’s retirement smooths succession at Ford because Mulally isn’t stepping down soon, Joseph Spak, an analyst with RBC Capital Markets in New York, said in research note.


“Booth’s retirement now aids transition in succession planning at Ford as it spaces the retirement of the CFO and the (eventual) retirement of CEO Mulally,” wrote Spak, who has an “outperform” rating on Ford. “We believe Mulally is likely to stick around at least through 2013, but continue to believe an insider is likely replacement.” Fields, who is also an executive vice president, is the “front runner,” Spak said.

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Shanks and Nair have worked closely with the executives they are replacing and will continue the turnaround plan Mulally started in 2006, he said.


Shanks, who joined Ford in 1977, previously worked alongside Booth at Ford of Europe, on the automaker’s since- divested luxury-car lines and at Mazda Motor Corp., in which Ford previously had controlling interest. Nair, who started at Ford in 1987, was previously vice president of operations in the automaker’s Asia and Africa region, which Mulally is targeting for growth.


“We’re just very pleased to have such a strong bench,” Mulally said. “These two individuals have grown up with this plan and they’re absolutely committed to it, they understand it and, with their experience, I think we’re not going to miss a beat.”


Ford’s board of directors yesterday also elected former Republican presidential candidate Jon Huntsman to the board, effective immediately. Huntsman, 51, former U.S. ambassador to China and governor of Utah, is chairman of the Huntsman Cancer Foundation.


Huntsman becomes the 15th member of the board, which also includes Richard Gephardt, a former majority leader of the U.S. House of Representatives and a candidate for the Democratic Party’s presidential nomination in 1988 and 2004.

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Ford reported its 11th consecutive profitable quarter Jan. 27, with net income of $13.6 billion, or $3.40 a share, boosted by a one-time tax gain of $12.4 billion. For all of 2011, Ford’s profit excluding some items was $8.8 billion, or $1.51 a share, up $463 million from the previous year.


Ford had $13.1 billion in automotive debt as of Dec. 31, more than U.S. rivals, because it borrowed $23 billion in late 2006, after Mulally arrived from Boeing and before credit markets froze. That enabled the automaker to avoid the bailouts and bankruptcies that befell the predecessors of General Motors Co. and Chrysler Group LLC in 2009.


Ford fell 1.2 percent to $12.69 at the close in New York. The shares have gained 18 percent this year after falling 36 percent last year.

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