Ford CEO Alan Mulally won't take Microsoft's top job

7:11 PM, Jan 7, 2014   |    comments
Ford Motor Company President and CEO Alan Mulally during unveiling of the 2011 Ford Explorer in New York, (Photo: Bebeto Matthews AP)
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(USA TODAY) -- Ford CEO Alan Mulally said today he will not leave the automaker for Microsoft and will stay at Ford at least through 2014. He was named repeatedly as a top candidate to replace Steve Ballmer at Microsoft.

The Associated Press, which conducted the interview with him, says he wanted to put speculation to rest conclusively. But he wouldn't say how far talks had gotten with Microsoft.

Mulally, who is due to retire later this year, saved Ford Motor from a bankruptcy filing, reorganized its operations worldwide and streamlined its product line. It's his reputation as a turnaround expert and someone whose expertise in streamlining operations that may have attracted Microsoft.

At least in the auto world, he's a hero.

Now, he will leave the Dearborn, Mich., based Ford as one of the rare CEOs in the auto world who didn't retire on a low note. After weathering the recession, Ford became profitable with a product line that includes a new Mustang and a new F-Series pickup on the way, two of its most important models.

His aw-shucks manner, product of a Kansas upbringing and frequent reminders of his start in the working world as a supermarket box boy, belied a boardroom toughness. He became well known at Ford for knocking heads of executives, rewarding honesty about the status of projects and punishing others. Above all, he treasured team play.

"Everyone is part of the team and everyone's contribution is respected, so everyone should participate," he told consultants McKinsey & Co. in an interview published last month. "When people feel accountable and included, it is more fun."

Mulally arrived at Ford in 2006 from Boeing, where he had run the commercial airliner business. He owned a Lexus. He had been courted by Bill Ford, who saw the need for a seasoned executive to shake things up in succeeding him as CEO.

Mulally's greatest contribution to Ford was in going to capital markets and borrowing to bolster the company's cash reserves. General Motors and DaimlerChrysler, later Chrysler Group, didn't join him in taking the same strategy. When the recession hit in 2008, only Ford was able to avoid a bankruptcy filing and reorganization. That not only kept it in good stead with investors and other stakeholders, but helped it resist scorn heaped on those companies saved by government bailout.

While he will always be best remembered for saving Ford during the roughest stretch for the auto industry since the Great Depression, that was really just the start.

He arrived to find a largely dysfunctional conglomerate where business units didn't interact with each other and executives conveniently forgot about goals they didn't achieve. Admitting a problem that could hold up a product launch or other object was considered the kiss of career death in the presence of others. Even more costly, different markets were developing entirely different vehicles without sharing in an industry where producing in volume and reducing costs can means the difference between profit or loss.

Europe and America each had their own version of the Focus, built on different platforms.

Mulally set out to create what he called the One Ford plan. Vehicles teams were forced to work together to create single vehicles that could be sold in markets around the world. There is now one Focus compact designed to please European and American customers alike. Mustang, which for generations has been Ford's halo car in America, was redesigned to try to make it appeal to the rest of the world. It was just revealed at press conferences in New York, Dearborn, Los Angeles, Shanghai, Sydney and Barcelona.

To get executives to work together, he created a "war room" at Ford's headquarters. In a room, he had boards installed that showed the status of major products with red, yellow and green markers to indicate how the project was proceeding. At first, executives were reluctant to admit a project had fallen behind. But the first to step up with a red market was Mark Fields, now the chief operating officer, who was congratulated at the time by Mulally for his courage. Others then followed and Ford's executive ranks were swept by a newfound sense of honesty.

Mulally also streamlined Ford. He was frustrated at all the foreign luxury brands he saw in the corporate garage. Why wasn't anyone driving a Ford?, he asked. Worse, he hated the looks of some of the company's key products. He described the old Taurus that he found when he arrived as looking like a football.

He sold or otherwise disposed of Jaguar, Land Rover, Volvo, Aston Martin and the company's interest in Mazda. He killed the Mercury division. Instead of focused first on Ford, and more recently, started trying to revamp Lincoln -- still a work in progress -- with the goal of getting it to the Mercedes-Benz, BMW, Lexus level.

"The most important thing we can do -- and we're doing -- is to create an exciting, profitably growing Ford," he said at the 16th annual USA TODAY CEO Forum. "We are now competing with the best companies in the world right here in the United States."

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