When Mark Fields took charge of Ford Motor Co. (F)’s Americas operations nine years ago, it was a major repair job as they descended into record losses and almost dragged the company into bankruptcy.
Today, Ford’s North American operations are the envy of the industry, earning a record operating profit of $8.78 billion last year and profit margins above 10 percent in an industry where 5 percent is respectable.
Now that Fields is poised to succeed Alan Mulally as chief executive officer, he’s taking charge of an automaker in its prime. Ford earned $42.3 billion in the last five years after losing $30.1 billion from 2006 to 2008. Fitch Ratings today upgraded Ford’s outlook to positive, from stable. Surging sales of Escape sport-utility vehicles, F-Series pickups and Fusion sedans drove Ford’s U.S. sales up 11 percent last year. In China, the world’s largest car market, Ford now outsells Toyota Motor Corp. (7203) Fields’ greatest challenge is following Mulally.
“Mulally is going to be known as one of the great leaders of the American automobile industry,” said Jeffrey Sonnenfeld, associate dean of the Yale University School of Management. “He lifted spirits during a time of distress. There are very few turnaround types like him.”
Fields has engineered a few turnarounds of his own in his 25 years at Ford. At age 39 in 2000, Fields became CEO of Mazda Motor Corp. (7261), in which Ford had a controlling stake at the time. He led a turnaround at Mazda with several Ford executives with whom he later worked closely to revive Ford’s North American business.
Along the way, he’s also transformed his image from a mullet-sporting Jersey boy to a legitimate leader with gravitas.
“He’s matured in front of the camera, almost like a child actor,” said Jim Press, a senior Toyota executive when Fields was leading Mazda’s turnaround. “He was very well thought of in Japan, in his 30s, running Mazda.”
The hard times Ford faced five years ago, when it narrowly avoided the bankruptcies that befell the predecessors of General Motors Co. (GM) and Chrysler Group LLC, humbled Fields, Sonnenfeld said.
“He’s always had a quick wit and charm and a lot of energy, but he’s been so tempered by the ups and downs,” said Sonnenfeld, who taught Fields as a graduate student at Harvard Business School. “Going through that period and living with the consequences gave him a certain humility.”
Now he’s being handed the keys to the company. Ford will soon announce his promotion to CEO and reveal the timing of Mulally’s departure, which will happen this year, said two people familiar with the matter. Mulally, who has said he would remain CEO through this year, will leave the company for another substantial role, said the people, who asked not to be identified disclosing internal plans. The moves may be announced as early as May 1, they said.
“Ford is undeniably in a very good place,” said Karl Brauer, senior analyst with auto researcher Kelley Blue Book. “Fields didn’t always appear quite so confident and assured, but he’s matured in the last five years and become an extremely good representative for Ford.”
These days, Fields’ fit, well-groomed appearance -- for which he was once mocked -- actually works in his favor as the company goes after the elusive Generation Y, the youth cohort that’s almost as large as the 75 million-strong Baby Boomers.
“He’s 53 and he could probably pass for 38,” Brauer said. “That’s going to help him appeal to younger people. It’s going to give the company a more young and vibrant image because he’s the head of it.”
Working beside Mulally as his COO for the last 17 months also prepared Fields to take the wheel, analysts said.
“Mark’s benefited very much under Alan’s leadership,” said Brian Clark, a managing partner in Atlanta for Boyden Global Executive Search whose specialties include automotive and manufacturing. “He wasn’t the guy to lead the company seven years ago, but now he is much better suited.”
After Mulally, 68, considered bolting from Ford to become Microsoft Corp. (MSFT)’s CEO last year, investors became eager for Ford to make the transition, said Michael Levine, a fund manager at Oppenheimer Funds Inc. in New York. Mulally pulled out of the Microsoft race in January and said he would stay at Ford through the end of 2014.
“It has become a little bit of a distraction,” Levine said of Ford’s CEO succession. “Obviously, Mulally was going to retire shortly, so clarity is good and Fields seems like a very capable successor.”
Fields won early praise from Mulally in 2006 for going against Ford’s culture of hiding bad news by becoming the first executive to admit a problem to the new boss. In the Thursday meeting, top executives are required to report on their initiatives using a green, yellow or red code to indicate progress, caution or a problem.
Fields was the first to put up a red light because a balky tailgate latch had halted production of the Edge sport-utility vehicle in late 2006. Mulally, frustrated no one had been reporting problems even though Ford was losing $17 billion in its automotive operations that year, began applauding.
“Great visibility, Mark,” Mulally recalled saying in a 2010 interview. “Is there anything we can do to help you?”
Born in Brooklyn, New York, Fields grew up in Paramus, New Jersey, and earned a bachelor’s degree in economics from Rutgers University and an MBA from Harvard. He worked in sales for International Business Machines Corp. before joining Ford in 1989.
Fields has shown flashes of being a street fighter. During a Ford executive meeting in 2006, Fields almost came to blows with then-Chief Financial Officer Don Leclair. The CFO was insisting on budget cuts to Fields’s “Bold Moves” ad campaign, according to “American Icon,” a 2012 book on Ford’s turnaround by Bryce Hoffman. “When you run the f---ing business, you can do it,” shouted Fields, who leapt across the table and had to be restrained by Bill Ford. When asked about what happened, Fields didn’t deny the incident and said he always felt “passionate” about the business.
Before he began overseeing the Americas in 2005, Fields gathered extensive experience overseas. He was executive vice president of Ford of Europe and also ran the automaker’s European luxury brands -- Jaguar, Land Rover, Aston Martin and Volvo -- which Mulally later sold to raise money to save the company.
These days, the only question is about the size of Ford’s earnings. The automaker has said its pretax profits will slip this year as it rolls out a record number of new models, including an aluminum-bodied F-150 pickup, its top seller, and a new Mustang sports car. Ford is betting the new models will pay off with more revenue and profit in 2015.
“I think 2014 could be a little choppy, but 2015 will be a great year,” said Levine, the Oppenheimer Fund manager. “They’re making the right moves for the long term. We’re very excited about the upside in the stock over the next year or two.”
Fields must convince tradition-bound truck buyers to accept a pickup made of an advanced material more associated with the Boeing jets Mulally once engineered. The company’s future is riding on a successful introduction of the F-Series, which accounts for most of Ford’s automotive profits, according to Morgan Stanley.
“Ford is about to start launching a pretty aggressive product onslaught, the aluminum F-150 being the most obvious example,” said Brauer of Kelley Blue Book. Along with the new Mustang, “those are two hugely iconic vehicles in the next 12 months that have to be launched smoothly.”
Fields also has several international fires to put out. He has to deliver on Ford’s promise to return to profitability next year in Europe, where it lost $1.61 billion last year and is starting to see improving results as the economy emerges from a prolonged recession. Ford’s operations in Russia, where it has three factories, have stalled as the ruble has weakened and the crisis in Ukraine has escalated.
The automaker also is cutting production in Venezuela and taking a charge of $350 million in the first quarter to account for the collapse of that nation’s currency.
“There are a lot of challenges ahead, but the challenges won’t define him,” said Press, now president of McLarty Global Transportation LLC, a Little Rock, Arkansas-based auto retailer and distributor. “He’s been a great manager. Now he’s got to show his ability to become a true leader. That’s his challenge.”
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