Two of the most senior and respected members of the Ford Motor Co. management team will retire, the automaker announced Thursday morning. But CEO Alan Mulally stressed that he himself has “no plans to retire,” and insisted the executive shake-up will have no measurable impact on the way the Detroit maker operates.
Nonetheless, Mulally, 65, made it clear that he is grooming the next generation of Ford managers, including the executive who will eventually succeed him.
This morning’s announcements involve a number of senior members of Ford’s management – but also sees a new name join the group, the company’s Board of Directors electing Jon Huntsman, the former Republican presidential candidate, to its ranks.
“Jon understands the importance of strengthening this country’s manufacturing base, which will contribute to our success going forward,” said Ford Chairman Bill Ford.
But the other changes will be felt more immediately. Stepping down are Derrick Kuzak, the veteran engineer who oversaw Ford’s shift from a regional to a global product development strategy; and Lewis Booth, the maker’s chief financial officer, who helped guide its financial turnaround during a dramatic industry downturn that saw its two domestic competitors declare bankruptcy.
Booth, 63, will be succeeded by Robert Shanks, 59, currently Ford’s vice president and controller, himself with 34 years of experience with the second-largest of the Detroit's automakers.
Succeeding Kuzak, 60, as director of global product development will be Raj Nair, who has handled a broad range of engineering duties at Ford over the last quarter century, most recently serving as the top engineer for global product development.
The shift to global, rather than regional product development has been perhaps the most significant element in the plan put together by the Ford management team since Mulally, a former Boeing executive, joined the company in late 2006. Central to Mulally’s One Ford strategy, it has resulted in a sharp reduction in the overall number of products, platforms and powertrains developed by the automaker. Instead, vehicles like the new 2013 Ford Fusion are sold – with relatively minor modification – in markets around the world, significantly reducing cost and complexity.
While Kuzak and Booth were critical to the development and transition to the One Ford approach, CEO Mulally stressed, “The Ford plan is absolutely clear and unchanged” in the wake of the planned senior management changes.
One of the key steps he took shortly after joining Ford, Mulally stressed, was to ensure that a traditionally competitive management system – where senior executives always had to worry about who was out to take their job – shifted to a more cooperative approach. In the process, he added, Ford has developed “a deep bench” of talent to draw from.
That raised the question of his own retirement. Though the still-boyish Mulally turned 65 last year, he remains active and vibrant and has repeatedly said that he sees no need to move on. He repeated that on Thursday during a media conference call, asserting he has “no plans to retire” anytime soon.
Nonetheless, Mulally acknowledged that eventually he will need to hand over the reins, suggesting, “Ford is absolutely committed to a robust succession plan at every position.”
In the ongoing speculation about who might eventually succeed Mulally, a select group of names routinely reappears. But with his upcoming retirement, Booth now falls off the list. Among the others, the strongest candidates appear to be Mark Fields, Ford’s president of the Americas, and Joe Hinrichs, who serves as the president of Asian and African operations.
Observers tend to give Fields the better odds, in part because Hinrichs is still considered young, at 45, for the CEO spot, and hasn’t quite as much experience as the 50-year-old Fields.
There is, of course, the possibility Ford could reach outside again, as it did for Mulally, though both the CEO and Chairman Bill Ford has expressed the desire to pull the next chief executive from internal ranks, if possible.
The management shake-up announced Thursday also sees several other well-regarded executives move up the corporate ladder. Hau Thai-Tang will succeed Nair as the maker’s top global engineer. And Stuart Rowley, currently Ford’s CFO for Europe, steps into Shanks’ spot as Controller.
Ford chief financial officer Lewis Booth and global product chief Derrick Kuzak will retire, reports CNBC's Phil Lebeau.