Alan Mulally: The CEO who mortgaged Ford's legacy for tech's sake
Few automotive CEOs have pushed a company further and faster than Ford's Mulally. As he steps down, we look back at his impact on the Blue Oval.
Alan Mulally took over as Ford CEO in September of 2006. Four months later, at the North American International Auto Show in Detroit, he appeared on stage with Bill Gates -- who was half a country away at the International CES in Las Vegas. The world's automotive and consumer technology were similarly estranged at the time, but that was about to change.
Together, Gates and Mulally announced SYNC. It was called a "computer in the car," bristling with connectivity and functionality that seems quaint now but was rare at the time. This moment marked a huge step forward for the company, and the beginning of a radical transformation. Ford, the Blue Oval that hadn't revolutionized the industry since Henry Ford's assembly line, was about to evolve in-car technology from optional nicety to required necessity.
This is a look back at the impact Mulally had on Ford, shaping it from just another car company to an automotive tech pioneer.
The world of the automotive CEO
Tech CEOs tend to be familiar faces, frequently standing on stage waxing lyrically about whatever great new service they're launching, idolizing developers or designers or engineers or whoever it was that had the greatest impact on whatever it is they're talking about today. They often act as the charismatic face of a brand that might otherwise only exist as a precision-crafted logo on a webpage.
It's a little different in the automotive world. CEOs of the big car companies certainly step up when they're launching a new car, but it's usually only to say a few words, find some (potentially contrived) way to show that sales are up, and then to step aside for the real faces of the brand: the cars themselves.
There are lots of reasons for this, perhaps greatest being that these companies are huge, they're old, and they're very well-established. They don't need a CEO to try to establish a brand image because their brands are seen on every street. And, when these companies do need to change their image, they have the kind of marketing budget that your average Silicon Valley empire would kill for.
Car CEOs come and go, they plot a course through the economic tides of the moment, they stay that course as best they can, they're thankful at the highs and they weather the lows. (Or, in the case of GM's new CEO Mary Barra, jump straight into the lows and hope that there are some highs to come.) They rarely rock the boat, and when they leave, it's rarely on good terms. Mulally completely re-engineered Ford's boat, while it was badly taking on water, and pushed it onto a wholly new direction.
Mulally has worked for two companies in his professional career. First was Boeing, which hired him as an engineer in 1969. After nearly 30 years and numerous successful modernization projects, Mulally was made president of the company's Commercial Airplanes division. He became CEO of that division as well three years later. After being passed over for the role of Boeing CEO, he left the company and headed east to Dearborn, Mich., to start working for company number two: Ford, as CEO.
At Boeing, Mulally ran the team that created the company's first all-glass cockpit, with no traditional dials, and implemented a host of other technological advancements. He managed the 777's development, with its fully fly-by-wire controls and fiber optic systems. He was no stranger to pushing the tech envelope, and he would do the same at Ford -- but only after getting the company out of dire financial straits.
His predecessor, William Clay Ford Jr. (Henry's great-grandson), had followed consumer demand and had the company churning out giant, thirsty SUVs as fast as possible. Rising gas prices saw demand for those vehicles dropping faster than the fuel gauge on a Ford Excursion. In 2005, Ford earned $2 billion, a third consecutive year of profitability. In 2006, that turned to a whopping $12.7 billion loss. The losses would continue through the dark days of the 2009 recession. Mulally clearly had his work cut out for him. He mortgaged the entire company to stave off debt collectors, pushed through a range of efficiency improvements, avoided a government bailout, and would turn a $6.6 billion profit in 2010.
It's hard to overstate the statement that appearance with Bill Gates made in 2007. As a refresher, the best-selling phone globally at the time was the Nokia 1600. The BlackBerry Pearl, with its funky trackball, was the hottest smartphone of the day. Microsoft was still hawking Windows Mobile 5, yet here was Gates, saying that smart cars were here for real.
SYNC's early functionality was humble, voice navigation and Bluetooth connectivity and media playback via USB. But, it was the beginning of a major initiative to make Ford's cars work more closely with smartphones, and most importantly, it wasn't relegated to the premium models. Smartphone connectivity and in-car tech were hardly novel ideas in 2007 and 2008, but all the cool stuff was happening on expensive cars from Audi, BMW, and Mercedes-Benz. Even then you had to step up to premium models if you really wanted all the bells and whistles.
Ford would launch SYNC on the Focus, quickly making it available across all its models and soon standard fare on even the cheapest cars, like the Fiesta. Since then, SYNC has continued to evolve, getting far more advanced through things like AppLink, which makes it possible for smartphone apps to talk directly to the car. Ford has even opened up AppLink and offered it as something of an industry standard. Sadly, as of now, it hasn't had any takers.
Though Mulally's tenure is mostly highs, there are some lows, and from a technology standpoint it's hard to see MyFord as anything but that. Ford would be the first auto maker to have a routine, major presence at the annual International CES in Las Vegas, and it was there, in 2010, that the company unveiled a revolutionary new way of interacting with your car. It was to be the next generation of SYNC, an intuitive, modern interface that could be used with either physical controls on the steering wheel or a touch screen in the center console.
The problem was that for many, it wasn't intuitive, and for plenty it was a little too modern. That is, half-baked. When it made its first appearances in cars in 2011, Ford was flooded with complaints about radios turning themselves off, presets getting lost, phones losing connection, and on and on. At worst the system was glitchy. At best many found it confusing. There were lawsuits, claims from dealerships that it was hurting sales, and though an early 2012 update addressed many of the concerns, MyFord Touch remains a bit of a black eye for the company.
The Focus is one of Ford's most popular cars, an efficient compact available in a variety of trims -- from the battery-powered electric to the sporty ST. But, until just a couple of years ago, the Focus sold here in the US was a very different machine from that marketed abroad. The two looked similar, but they were not the same, and annoyingly the international version was better than the US version. Much better.
For Mulally, it was ridiculous for one company to produce two versions of the same car, with separate parts, service procedures, options packages, marketing materials, you name it. His vision was One Ford, a phrase that would become something of a mantra. And a success. The latest generation Focus hit dealerships in early 2011, one model to be sold globally. It was a better car than either of its predecessors, and in 2012 it would be the greatest selling car in the world.
Speaking of Focus, Mulally unveiled the 2012 Focus Electric at the 2012 International CES. A new model from a major car company at a consumer technology show. It was unheard of, and helped cement CES' position as a source of automotive announcements, not just gadgets.
All new Mustang and F-150
The latest, and perhaps riskiest innovation to come under Mulally's watch is the reboot of two of the company's most iconic vehicles: Mustang and F-Series. Both vehicles have been radically redesigned, leaner and lighter than before. This means more speed for the Mustang, more towing for the F-150, and better fuel efficiency for both. But, the aluminum-bodied F-150 also means considerably greater cost and, potentially, higher repair bills in the case of an accident. All that remains to be seen.
Until very recently there was no shortage of speculation that Mulally was prepped to take over Steve Ballmer's position at Microsoft, speculation that ran so rampant it may indeed have killed his chances at that role. Still, Mulally's resignation from Ford comes largely on his own terms, and he can walk away with confidence. He not only leaves the company in a better place than he found it, he leaves with his reputation intact. In another contrast with your average tech CEO, Mulally's reputation is not just that of a driven, successful individual, but that of a genuinely nice guy. Having interviewed and spoken with the man on multiple occasions, I can confirm that reputation is well-deserved.
As COO Mark Fields steps up to CEO on July 1, it remains to be seen what comes next for Mulally. Also unclear is the future of SYNC. The Microsoft partnership Mulally established so early in his tenure appears to be over, or at least on the rocks, with strong indications that BlackBerry's QNX will step in. With Apple's CarPlay invading dashboards, threatening to make all other in-car infotainment systems obsolete, Fields certainly has his work cut out for him if he wants to maintain Ford's position at the head of the automotive tech class.