Detroit Turns Inward: Ford Puts a Lifer in the Driver's Seat

Detroit Turns Inward: Ford Puts a Lifer in the Driver's Seat
Mark Fields, COO of Ford Motor Co., during the the 2014 North American International Auto Show (NAIAS) in Detroit
Photograph by Andrew Harrer/Bloomberg

Now that U.S. car companies have been retooled and turned around, they are turning the controls back over to industry insiders. Later this year, when Ford drops off Chief Executive Alan Mulally, sliding into the driver’s seat will be Chief Operating Officer Mark Fields, according to a Bloomberg News scoop.

The succession news was largely expected. More notable, however, is that the boards of directors have started once again to trust made-in-Detroit executives. Fields, having the joined the company shortly after grabbing his Harvard MBA, has been a Ford employee since 1989, back when the Taurus was a hot new model. Mulally, by contrast, made his name at Boeing and was considered an automotive outsider when he took over Ford in 2006.

Fields’s counterpart at General Motors, Mary Barra, is another lifer who replaced a relative newcomer. She started working at GM in 1980 as a college student and began her long climb to the top of the ladder with an business-school internship in 1988. Dan Akerson, her predecessor, spent the bulk of his career in telecommunications and later at the Carlyle Group, a private equity giant. He was pulled into the car business by the Treasury Department in 2009, with the mandate to watch over its bailout investment.

The advantages of hiring a top boss from within the company or the industry are many. A new boss from the inside knows the business and already has personal relationships with employees, suppliers, and dealers. And he or she presumably knows car world minutiae—the difference, say, between a naturally aspirated engine and a turbocharged model.

The risk, of course, is that they may slip into a strategy rut and overlook innovation or best practices from other industries. It took a tech guru, after all, to build Tesla.

Still, hiring an outsider at the moment would arguably be a lot riskier than promoting executives like Fields and Barra. Not only would they not know the car business, but they would also be taking control of a booming trade with no perspective on just how bad things can be. U.S. carmakers could do no wrong last year. GM sold 14 percent more vehicles, while Ford notched a 7 percent gain.

Fields and Barra have never pulled all-nighters cranking out PowerPoints for McKinsey, and they haven’t disrupted any old-school business models from a ping-pong table in Silicon Valley. But they were in Detroit when U.S. car companies were recklessly cranking out gas-guzzling SUVs and struggling to control enormous legacy costs. They should know better than anyone how to steer clear of those pitfalls, even when business is booming.

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