With Fields as COO, Mulally sees Ford gaining momentum
ALAN MULALLY: It's not like Mark [Fields] has a different plan than Alan has. You know, I'm really good help. If you want to do something, I'm a good person to ask to be on your team.
Two days after Ford Motor Co. released second-quarter earnings that showed record North American profits, CEO Alan Mulally and Executive Chairman Bill Ford unveiled a series of changes in the company's top management.
Mulally, 67, will stay on as CEO for at least two more years, while Mark Fields, 51, currently president of the Americas, will become COO on Dec. 1.
Ford appears to be cruising along smoothly, but some problems persist. Ford's scores on quality surveys continue to suffer, largely because of its troubled MyFord Touch system. And recent vehicle launches have stumbled. For example, the redesigned 2013 Ford Escape already has been recalled twice.
The week after the management shuffle, Mulally met with Automotive News Editor Jason Stein, Industry Editor James B. Treece and Staff Reporter Bradford Wernle.
Q: You're going to stay on at least a couple more years. What more do you have to accomplish?
A: I'm really excited about further implementing the One Ford plan. Everybody's always asking, "What's the next plan or the next version?" It really is that we are picking up more and more momentum for implementing the One Ford plan around the world.
One tremendous proof point is the progress in North America. Following that is the acceleration of implementing the One Ford plan in Europe, and then the tremendous progress that we're making on supporting Asia Pacific. We're profitable [in Asia Pacific] now. This is a tremendous feat because we're implementing all these new facilities and all the new products, and we're timing it such that we're able to start to make money.
The other major news was Mark Fields being named COO. You said that you're still going to sit in on the Thursday business plan reviews. How do you make sure that he doesn't feel that you're in the room looking over his shoulder?
He's in charge of the day-to-day operations.
It's really very easy because we've been doing this for six years, sitting side by side, so I can't wait for my first meeting where Mark leads the meeting instead of me and I'm there supporting him just like he has been supporting me.
The whole team is there, there's nothing new; there's nothing that's changed. We all know the behaviors. Mark knows the behaviors. Mark has run the meeting when I haven't been there.
I think it's going to be quite, quite fun to be there as another member of this team and support him, plus it really allows me to help even more on the long-term direction of the company. There are so many opportunities for us to serve even more markets around the world. What's our world plan going to be for that? Where are we really going to go with the technology road map going forward -- with alternate fuels and electrification and hydrogen? Where are we going to go with our production footprint?
Switching to quality, Consumer Reports came out with an analysis of how Ford had fared, and your score was surprisingly low even after last year's drop. What do you need to do to improve those scores?
First of all, we were disappointed, but we already knew the issues that were being reported. The issues are mainly associated with not so much Sync, but with MyFord Touch. The second one was associated with the six-speed transmissions. Both tremendous technical innovations, and we're not going to back off on technology the customers really do want and value. Even with the issues we had on MyFord Touch, it's still a reason to buy and people recommend buying Ford because of it.
What would you do differently if you could do it over?
I'm not so sure that we would've done anything significantly different except for maybe the introduction of the initial capability. Let me just give you one example about that on MyFord Touch.
We knew that some customers liked flat panels as an interface. Some of them like consumer electronics' five-position or six-position controllers. Some of them like voice commands. At the time when we started, we only had like 100 voice commands. Today we have 10,000 voice commands. In hindsight, we probably would've focused more on the voice activation and maybe a little bit less on the touch screen and then brought that technology along a little slower. All three of them are really important to consumers, so I think continuing to focus on them and continuously improving them is the thing to do.
So, simplicity going forward?
It's not so much just being simple but intuitive. We didn't know the voice commands were going to come along so fast. This is a fantastic development, and I think that absolutely is going to be the centerpiece for interfacing with your car going forward because you keep your hands on the wheel and your eyes on the road.
Does the center for electronics expertise reside here at Ford, or do you bring that in from Apple or Microsoft or whomever?
The expertise of the interface with the driver is always Ford because we're the ones who know how the vehicles are operating. We know the vehicles, but we use all of the fantastic technology developers in that space, including Apple and Microsoft and Google. We work with everybody because what we're really talking about is that the car really is going to be the mobile application of choice.
Another neat thing is what we have learned about the cycle times for consumer electronics versus the design of the automobile.
An automobile will be around for eight, nine, ten, twelve years. The cycle time for consumer electronics can be six months to a year, so that's why you see us moving very quickly to being able to take your car in and have it flashed and updated with the speed of consumer electronics. I think that's absolutely a trend for the future.
We want to move to the place where you have this enduring relationship with your Ford store just like your Apple store. You go in, you get the latest upgrades on the technology and off you go. You see what's coming, and you can decide which features you want.
Are you implying that if people own a car four years, they would come in at two years and choose upgrades from a menu of options?
I think they'll be coming in every six months to a year. You'll do just like you do with your laptops and your PCs. You'll just get upgrades to your car, and the car is a mobile application.
That makes your retail network critical in this piece, right? Does that mean the training of that network has to ramp up as well?
Absolutely. We talk about enhancing the customer experience at the Ford store because it's not just a transaction or a one-time buying of a car. We're seeing more service because now you really do want to go to the Ford store. You have this ongoing relationship of continuously increasing the capability of your vehicle. I think that's going to be a really big part of it. The people who do that really well are going to take customer loyalty to another level of performance.
One of the new things in the Consumer Reports issue this time was that some of the launches have been bumpy.
Some of them have, yes.
What's going wrong?
We are ramping up production, and we are introducing more new models than Ford ever has, and that's a lot of work.
The fundamental reason is [that] we took down the supply base during the recession to get it right-sized in addition to Ford. So we're bringing the entire supply base back up with more new vehicles than we ever had, and we ran into some issues on being able to do that. We know what the issues are, and we'll continue to improve not only the launch process but also the product development.
We sometimes pinch ourselves. This is so incredibly exciting because we remember all those years when Ford was going down and losing market share.
We have turned that corner and we are growing now. It has been a long time since we have done that, so we were exercising a lot of new muscles and then accelerating the development of these new products. This is fun!
You can reach Jason Stein at firstname.lastname@example.org. -- Follow Jason on