mark fields is ford’s mr. inside, and its heir apparent - nytimes

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12-02-18 4:06 PM Mark Fields Is Ford’s Mr. Inside, and Its Heir Apparent - NYTimes.com Page 1 of 6 http://www.nytimes.com/2012/02/19/business/mark-fields-is-fords-mr-inside-and-its-heir-apparent.html?_r=1&hpw Ford’s Mr. Inside, in Sight of the Crown MARK FIELDS should be feeling pretty good right about now. The Ford Motor Company  , his employer for the last 23 years, is in the midst of a re- markable turnaround. Since the American auto industry’s big wreck in 2008, Ford has reported 10 consecutive profitable quarters. And Ford, the only one of Detroit’s Big Three that wasn’t bailed out by taxpayers, has steadily gained market share with each new product it has introduced. To top it off, the biggest contributor to this comeback, by far, is Mr. Fields’s business unit, which encompasses all of Ford’s manufacturing and sales in North and South America. So why is Mr. Fields looking so tense on this morning in early February, as he convenes his weekly meeting of senior managers in a second-floor conference room at the compa- ny’s sprawling Product Development Center here? “We do have a lot to celebrate, and we have a wonderful opportunity to take the busi- ness to the next level,” Mr. Fields said in an interview just before the meeting. “The key is not getting — and I hate this word — complacent.” That’s certainly one answer. Another is that the top job at Ford now looks as if it’s his to lose, and the pressure is on. Mr. Fields is the odds-on favorite within Ford to succeed Alan R. Mulally as its chief ex- ecutive. And with North America as the source of virtually all of Ford’s profits for the foreseeable future, Mr. Fields is being pushed to deliver better margins, higher sales and the final validation that he is the best choice to take over when Mr. Mulally retires. Succession issues at the Big Three grip Detroit like a presidential election. But specula- tion about Mr. Mulally’s replacement is greater than at any time since Lee A. Iacocca headed toward retirement at Chrysler in the early 1990s. “Complacent,” the word Mr. Fields so despises, is not a description heard often today in Detroit. True, Ford and its crosstown rivals, General Motors and Chrysler, are again making money and increasing sales after their financial crises three years ago. But Mr. Fields doesn’t forget how miserable Ford’s prospects were when he became president of 

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Ford’s Mr. Inside, in Sight of the Crown

MARK FIELDS should be feeling pretty good right about now.

The Ford Motor Company  , his employer for the last 23 years, is in the midst of a r

markable turnaround. Since the American auto industry’s big wreck in 2008, Ford hreported 10 consecutive profitable quarters. And Ford, the only one of Detroit’s B

Three that wasn’t bailed out by taxpayers, has steadily gained market share with eac

new product it has introduced. To top it off, the biggest contributor to this comeback, b

far, is Mr. Fields’s business unit, which encompasses all of Ford’s manufacturing an

sales in North and South America.

So why is Mr. Fields looking so tense on this morning in early February, as he conven

his weekly meeting of senior managers in a second-floor conference room at the compny’s sprawling Product Development Center here?

“We do have a lot to celebrate, and we have a wonderful opportunity to take the bus

ness to the next level,” Mr. Fields said in an interview just before the meeting. “The ke

is not getting — and I hate this word — complacent.”

That’s certainly one answer. Another is that the top job at Ford now looks as if it’s his

lose, and the pressure is on.

Mr. Fields is the odds-on favorite within Ford to succeed Alan R. Mulally as its chief e

ecutive. And with North America as the source of virtually all of Ford’s profits for th

foreseeable future, Mr. Fields is being pushed to deliver better margins, higher sales an

the final validation that he is the best choice to take over when Mr. Mulally retires.

Succession issues at the Big Three grip Detroit like a presidential election. But specul

tion about Mr. Mulally’s replacement is greater than at any time since Lee A. Iacoc

headed toward retirement at Chrysler in the early 1990s.

“Complacent,” the word Mr. Fields so despises, is not a description heard often today

Detroit. True, Ford and its crosstown rivals, General Motors and Chrysler, are aga

making money and increasing sales after their financial crises three years ago. But M

Fields doesn’t forget how miserable Ford’s prospects were when he became president

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the Americas division in 2005 , or the tens of thousands of jobs he had to cut to get

United States operations back on track.

So instead of opening his weekly management session that February morning with

glowing recap of Ford’s $8.8 billion operating profit for 2011, he instead passed out

sheaf of news reports casting doubt on its future, including one headlined, “Are FordBest Days Behind Them?"

And while Ford’s global operating margins were a relatively healthy 6 percent in 201

they fell far short of the 9 percent at rivals like Volkswagen and Hyundai. Among all a

tomakers, Ford ranked only sixth in profits earned on each vehicle sold.

“No one wants to say, ‘We’re No. 6,’ ” said Amit Singhi, the Americas division co

troller.

That’s exactly the message that Mr. Fields wanted to drive home. With its internation

operations struggling, Ford urgently needs better margins from its core business in th

United States to continue to grow. Its impressive recovery, he said, will mean little if r

sults plateau now.

“All the hard work has gotten us to this point,” he said. “It’s like we’ve gotten to ba

camp on Mount Everest, and now we have to climb the mountain.”

THAT could describe Mr. Fields’s career path as well. At 51, he’s no longer the wü

derkind Harvard Business School graduate who was dispatched to save Mazda, Ford

Japanese affiliate, in 2000, was moved two years later to run Ford of Europe, and the

was thrown into the fire as president of the faltering Americas unit.

“Mark is clearly the heir apparent unless he stumbles badly,” said Joseph Phillippi,

former Wall Street analyst and principal in Auto Trends Consulting. “He’s proven him

self to be a really good manager, but they are really in a dogfight to keep putting up thnumbers in the U.S.”

Mr. Mulally, now 66, has been tight-lipped about his departure plans. This month, h

made light of the question in announcing the retirements of Ford’s chief financial off

cer, Lewis Booth, and product development chief, Derrick Kuzak. “I have read the new

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release very carefully, and I do not find my name on it,” Mr. Mulally told reporters.

In his time at Ford, Mr. Mulally has done what many thought impossible. Since arrivin

in 2006 after a long career at Boeing, he has shattered the myth that outsiders can’t gras

the complexities of the auto business. His moves to cut underperforming brands an

globalize products have transformed Ford from an industry laggard dependent on salof big pickups and sport utility vehicles into a leader in producing technologically a

vanced fuel-efficient cars. In the process, he has changed a corporate culture known f

executive infighting into one admired for cohesion and teamwork.

But the retirements of Mr. Booth, 63, and Mr. Kuzak, 60, who have been instrumental

Ford’s recovery, are the first signs of a changing of the guard. And while company i

siders expect Mr. Mulally to stay on for at least another year or two, the spotlight is f

cusing on Mr. Fields.

Whereas Mr. Mulally was a huge unknown when he joined Ford, Mr. Fields is consi

ered the consummate insider. Over the course of his career, he has been seen as a risin

star who fixed Mazda and brought order to what was Ford’s hodgepodge of Europea

brands, as well as a lightning rod for criticism by the United Automobile Workers as th

architect of drastic job cuts and plant closings before Mr. Mulally arrived.

During a wide-ranging interview, Mr. Fields frowns only when asked about his chanc

to run Ford after Mr. Mulally. “Very simply, my ambition is just to contribute as muc

as I can to the profitable growth of Ford, and that means running the Americas,” h

said. “Otherwise you get distracted. And I’m not going to allow that to happen.”

It’s the politically correct response, and it underscores how crucial success in the Amer

can market is to Ford’s progress. Its North American operations accounted for 70 pe

cent of pretax profits last year, with Ford’s automotive finance business contributin

most of the rest.

By contrast, Ford lost money in Europe, where economic conditions have depressed th

car market, and Asia, where it is investing heavily in new factories and products

catch up to rivals like G.M. and Toyota.

“Everything revolves around how Ford does in the U.S. for the time being,” said Dav

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Whiston, an auto analyst at Morningstar, the investment firm.

MR. FIELDS got his start at Ford as a marketing manager for its Thunderbird car

1989. Born in Brooklyn and raised in Paramus, N.J., he readily acknowledges that he

not a “gearhead with oil running through my veins.” But after getting his M.B.A., h

chose a job offer from Ford over opportunities in investment banking because the scaand scope of the car business enthralled him. His decision baffled classmates who we

headed to Wall Street.

“I felt it was really important to go to a company that made something,” he said. “I

say I’m going to work for Ford, and they’d kind of look at me and say, ‘So how man

classes did you fail?’ ”

With his New Jersey accent, tailored suits and, at the time, a sweptback mullet of dar

hair, Mr. Fields stood out from the Ford crowd of conservatively dressed Midwester

engineers and finance types. But he quickly learned how to hold his own in a cultu

where executives fought openly for power and influence. “You never said you neede

help,” he said. “That was a sign of weakness.”

When William Clay Ford Jr.  , Ford’s current chairman and then its C.E.O., summone

him from Europe to take over the Americas unit in 2005, Mr. Fields brashly suggeste

that he would deliver results faster if other corporate officers stayed out of his way.

was pretty straightforward with Bill,” he said. “Keep world headquarters out of our ha

and let us put our plan together and implement it.”

Mr. Ford concurred, but Mr. Fields found out that his desire for autonomy also had

downside. Under his direction, Ford cut more than 40,000 jobs in the United States an

closed some of its oldest assembly plants in the country. His calls for sacrifices amon

rank-and-file employees backfired when a local television station revealed that he w

using Ford’s private jets to fly back and forth to his family home in Florida.

He agreed to give up the jet trips, but the damage was done. “He seemed like the slic

operator who was too important to fly commercial,” Mr. Phillippi said. And as Ford

losses grew in the United States, Mr. Fields became aware that some at the compan

were taking bets that he wouldn’t last after Mr. Mulally’s arrival.

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“There was a ‘dead pool’ about me,” Mr. Fields said. “People were saying, ‘When

Fields going to get shown the door?’ ”

But, in fact, he has thrived under Mr. Mulally’s inclusive management style. “Mark h

grown a lot since Alan came in,” said one company executive, who spoke on the cond

tion of anonymity because he was not authorized to comment on personnel matters. MFields has modeled his weekly management team meetings after Mr. Mulally’s bus

ness-plan review sessions, and acknowledges that he needed to soften his strident style

“What’s important is that everybody is pulling together to solve issues and not sco

points,” Mr. Fields said. “At the end of the day it’s all about the company and not abou

individual success. For a number of years it was exactly the opposite.”

At his recent team meeting, Mr. Fields opened the floor to subordinates about how

keep the vast North American organization of 20,000 salaried workers focused on incr

mental improvements in margins.

“People understand the strategy, but it’s not hitting home,” said Jim Tetreault, who run

manufacturing for North America. “I don’t think the benefits of our platform consolid

tion have resonated, and that’s a story we need to tell better.”

Combining vehicle platforms to yield a wider variety of models saves Ford money, r

duces complexity and improves quality. The so-called “One Ford” approach is the linc

pin of Mr. Mulally’s turnaround strategy, and an effort that has quickened Ford’s pro

uct pace, giving Mr. Fields a steady supply of fresh new vehicles to sell in the intense

competitive American market.

MR. FIELDS walks a fine line between reminding employees how bad things were just

few years ago, and exhorting them to build on its more recent success. “I would call

good confidence, not overconfidence,” he said. “It’s great to have a bit of success as lon

as we don’t inhale and keep ourselves really focused on what’s going on in the marke

place.”

To improve margins, he has to keep a tight control on vehicle inventories, and succes

fully manage the introduction of products, particularly the revamped versions of two

Ford’s biggest sellers, the midsize Fusion sedan and the Escape compact crossover. H

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has often traveled to oversee both the changeover of some assembly plants from larg

vehicles to smaller ones, and the hiring of thousands of entry-level autoworkers. A sli

up in the production process could reduce profits — and hurt his chances to succee

Mr. Mulally.

“Investors are pretty confident that if Mark is the guy, he won’t screw anything upsaid Mr. Whiston at Morningstar. “It would be more troubling if Ford had to look ou

side the company for its next C.E.O.”

That seems unlikely, according to people in the company familiar with the successio

deliberations being conducted by Mr. Mulally, Mr. Ford and the board. Several exec

tives use the phrase “it’s his to lose” when referring to Mr. Fields’s opportunity to b

come the next C.E.O.

It’s not always easy, Mr. Fields acknowledged, to be under such a microscope. But it ha

helped him appreciate the stability that Mr. Mulally has brought, and the need to su

tain it. At the Detroit auto show last month, the wife of one employee sought out M

Fields to let him know just that.

“She said, ‘I just want to thank you and the rest of Ford management for what you’v

done,’ ” Mr. Fields recalled. “It’s those things that really bring it home for me. It’s n

about camaraderie, but the pressure not to let each other down.”