Bill Ford, the great-grandson of Henry Ford, is to step back from the day-to-day running of the family's troubled car maker, to be replaced by an outsider with a brief to pull the company back into profitability.
Ford announced the surprise appointment of Alan Mulally, the number two at the aeroplane manufacturer Boeing, as its new chief executive. The shares soared in after-hours trading as investors hoped the injection of new blood into the management team would speed the car maker's restructuring and help in the fight against lower-cost Asian rivals such as Toyota.
Mr Ford - the fourth member of the founder's family to run the company in its 103-year history - will retain the title of chairman and told employees yesterday that he intended to remain "extremely active" in the company. In an internal memo, he said: "I'll be here every day and I will not rest until a prosperous future for this company is secured." He had been the chief executive since October 2001, but had gained a reputation in Detroit for being a relatively hands-off leader.
Mr Mulally, 61, was lured to Ford after 37 years with Boeing, which he joined as an engineer. As he rose through the business, he won acclaim for overhauling the company's manufacturing processes and gained a reputation as a charismatic manager. On his watch, Boeing's commercial airplanes division has recovered its market leadership position from Airbus.
Ford insiders said that Mr Mulally has been talking to the 49-year-old Mr Ford about joining the company since July, and his appointment as president and chief executive was approved by the board yesterday. He takes up the post immediately.
"After dealing with the troubles at Boeing in the post-9/11 world, Alan knows what it's like to have your back to the wall - and fight your way out with a well-conceived plan and great execution," Mr Ford said in his note to employees. "He also knows how to deal with long product cycles, changing fuel prices and difficult decisions in a turnaround."
Ford has plunged into the red because of poor vehicle sales in the vital US market, where gas-guzzling pick-up trucks and sports utility vehicles have fallen out of fashion since petrol prices spiked higher. Sales were down 11.6 per cent in August. Meanwhile, Toyota's sales have jumped and it is now running Ford neck-and-neck for the number two position in the US, after General Motors.
Last month, the company said it would slash car production this year to try to stop over-supply from driving down prices, and would accelerate its restructuring plan. In addition to 30,000 job cuts already announced, it is believed to be planning a further 6,000 white-collar redundancies.
Ford shares were up almost 5 per cent in the period after Mr Mulally's appointment. They have risen since mid-July because of the company's perceived willingness to take radical steps to return to the black. Mr Ford has already appointed a heavy-hitting investment banker to consider asset disposals. Kenneth Leet, formerly of Goldman Sachs, is understood to be examining the future of Jaguar, the UK-based luxury car marque, and Ford's profitable vehicle financing arm.
In an interview with Newsweek over the weekend, Mr Ford had said that he would not stand in the way of new management talent if an appropriate executive could be found. Mr Mulally said he had looked over to Ford for inspiration for some of his innovations at Boeing, and added: "Just as I thought it was appropriate to apply lessons learned from Ford to Boeing, I believe the reverse is true as well. Ford's long tradition of innovation, developing new markets, and creating iconic vehicles that represent customer values is a great advantage that we can leverage for our future."
Boeing appointed another company veteran, Scott Carson, to replace Mr Mulally as the president and chief executive of Boeing Commercial Airplanes.Reuse content