Restructuring / Turnaround Strategies Case Study

Alan Mullaly, veteran from Boeing: Can he turn Ford around?

Abstract:

One of the ‘Big Three’ auto-makers in US, Ford Motor Company, manufactured and distributed automobiles in 200 markets across six continents. In August 2006, the sales in Ford’s home market, witnessed further fall compared to the previous year and the losses were $1.3 billion (£680 million) in the first half of 2006. The US sales decreased by 12% in August 2006 due to sharp rise in petrol prices in the US. Ford announced its second restructuring plan in January 2006, entitled "The Way Forward".

Bill Ford, the great grand son of Henry Ford stepped down as the CEO in September 2006, and announced Alan Mullaly, a veteran from aircraft manufacturing industry as the CEO. Since the time Bill Ford took up his job as CEO at Ford Motor Company (FMC) in 2001, he was trying to get successful auto industry veterans like Renault-Nissan CEO Carlos Ghosn and DaimlerChrysler Chairman Dieter Zetsche to take up his position as he felt he was not the right person. Unable to get either of them, Bill Ford looked outside the industry to choose right leader for his ailing family business. The decision raised a question in the industry - Can a ‘non-car’ guy fix FMC?

The case aims at discussing the challenges that lie ahead for Alan Mullaly to do his job at Ford and discuss the pros and corns of this decision taken by FMC.

Pedagogical Objectives:

• To discuss the Ford Motors Company as one of the ‘big three’ auto giants in US
• To understand the strategies used by Ford Motors for restructuring during crisis
• To understand importance of new leadership in a family-owned company
• To study the role of leadership in a turnaround of a company.

Keywords : Ford Motor Company; Bill Ford; Henry Ford; Restructuring / Turnaround Strategies Case Study; Alan Mullaly; Aircraft Veteran; Non-car guy; Leadership; Strategic management, turnaround; 2006 Crisis; Boeing; Challenges; Way Forward; Restructuring; Big Three; Leader