Automotive News recently published an interview with Ford's group vice president of human resources. Joe Laymon mentioned the names of six brass hats Ford considers potential successors to their current CEO Alan Mulally. As Mr. Mulally has only been in office for just 18 months, anticipates a long stay and hasn’t seen his 63 birthday, the timing was, at the least, odd. More importantly, Laymon effectively turned a succession plan into a very public episode of Survivor Dearborn.
Taken on its own, the mess should disappear before the end of the news cycle. Taken as a glimpse into Dearborn’s corporate culture, it becomes a clarifying tale. Laymon shows us the primacy of internal politics and the resulting backseat relegation of everything else, including-– I don’t know-– building decent cars and trucks.
Backstabbing, career sabotage and secret alliances are all part of internal power struggles. They almost never profit a company as a whole. Good ideas get axed because they came from form the “wrong” exec. Good people get axed because they hook-up with the wrong team.
Sadly, this isn’t baseless or general speculation. A quick look at Ford’s Shakespearian history sets the stage. Henry the Second fought Harry Bennett, then Lee Iacocca. Bill Ford struggled with Jac Nasser. And those are just the big public fights. Every day, smaller, darker battles wage. Just this week we’ve seen the Glass House Gang pull the rear wheel-drive (RWD) rug from under Ford of Australia’s proverbial feet, as Dearborn declared that America will handle the new global RWD platform.
In short, the Ford culture has been poisonously political since its inception. If current CEO Alan Mulally could do one thing to turn around the Blue Oval, eliminating these Machiavellian machinations would be it. Laymon’s announcement of a battle for succession both reveals the fact that nothing has changed, and amplifies the inherent discord.
Then there’s a Board of Directors, currently stocked with two members of the Ford family. The board alone has the power to pick Ford’s CEO. The CEO title itself derives from the position’s job number one: executing the directives of the board. Sure, the board takes recommendations from staff and company officers. But they are in charge. Ostensibly.
For Laymon to publicize the list of CEO succession long before Ford’s CEO is slated to leave tells us that Ford’s board is a bunch of bystanders– at least when it comes to their most important responsibility.
Jabbering away in public about who’s next takes the attention from who’s now. The ‘now’ at Ford, is a pretty important time. Market share and money are fleeing the company like the Jews from Egypt. Mulally was brought on board from Boeing at enormous expense to perform miracles. He’s pointed the way forward and issued some commandments. Now is the time for everyone to line up behind him and get through the desert. It’s NOT the time to wonder who gets the staff when he’s gone.
Not that it’s wrong to have a line of succession. A responsible company has plans for both the untoward-– in case a CEO pegs it-– and the long term. The learning curve at a company like Ford is steep and treacherous. You need executives who can move into place and keep things moving.
What IS wrong: waving everything around in public. Most of corporate American would do well to be more transparent. But this is one of those rare instances when the Glass House Gang should have kept the curtains closed. Most of the world expects Detroit execs to be clawing and conniving, but no one wants to see it. People want to see hard work, rallying ‘round the chief and honest effort.
People don’t always care what kind of company creates their cars. Porsche made Nazi war machines. BMW used slave labor. GM has closed plants across the country, off-shoring the work. But if there’s one thing Americans love it’s a come-from-behind Cinderella story. A Ford that pulled together and turned itself around would have something more valuable than steel and glass to sell.
It was once common for someone to refer himself as a Ford man. Such loyalty has not completely gone the way of the fedora. It’s still achievable, as any Mac-evangelists or Harley rider will be happy to tell you, at length, in a language outsiders barely grasp.
No such luck for Ford. In the end, Joe Laymon has shown us that it’s still business as usual in Dearborn. FoMoCo are missing yet another opportunity to change, grow and inspire, not just in terms of design or technology, but as a community. It’s too bad. Who knows how many more chances they can afford to blow.
Not that Joe Laymon cares. The day after the interview broke, he quit Ford and moved to Chevron Corp.
For details, see my story in TTAC a few years back about Chris Theodore and the Mustang. Not much has changed, except that Mustang sales have slowed appreciably because Ford hasn’t spent a dime upgrading the pony since they fired Theodore.
Bob
I called myself a Ford man until I replaced a few head gaskets, transmissions, and generally glued my Fords back together again. One Ford I still have is reliable in one respect only: something always breaks every time I drive it.
Mulally got a nice package for joining and has enjoyed great compensation since. I doubt he really cares if there is a FoMoCo ten years from now. He’d love to be successful but should the old guard win it’s no big deal really.
Disclosing HR plans like that is really unprofessional. Good luck lassoing executives from other companies. When they see the laundry hanging out like that they usually prefer to stay put. Deep down inside they are no different from the masses that labor under them.
I don’t call myself a ford man, even though I’m approaching nearly 80K in in my Ford. Althought the reliability of my vehicle has absolutely nothing to add to the discussion of Ford’s corporate culture, I just wanted to bring this up.
But I do agree that disclosing HR or any company confidential information is unprofessional, and probably one ofthe reasons why Mr. Laymon is no longer with Ford.
I would not be surprised to hear that FoMoCo corporate is a nasty snake pit of a place to work, but it would strike me as the height of irresponsibility for the board of directors not to have a succession plan in place, every day, for its CEO.
Ford is a $13 billion company (which isn’t much by automaker standards, actually, but is still pretty big) with more than 280,000 employees. The CEO, whoever it is, could quit, join a cult or get hit by a bus at any moment. If that happens, the board needs to have options of several people who can start almost immediately to take his place.
Having several designated successors in the wings is a bit like having the vice president ready to assume the presidency if something happens to the president. The intent is not to push out the president, but to keep the country stable and free of anarchy if something happens.
I do hope that they allow Mulally the time to do something effective. He’s (sort of) on the right track; what he really needs now is a home run hit model for the US market. I’m not sure that he’s close to having one.
I think it’s wonderful that Ford was actually able to make a decision about a successor to the Panther in less than 30 years. Take that, Toyota!
I normally enjoy reading the editorials and this is the first one that made me want to comment. Mainly, this editorial is a fairly generic complaint that is endemic in companies. You could replace Ford with any other company and it would still make as much sense. To write it as if Ford is the only company suffering from this type of public backstabbing is laughable.
Is public backstabbing bad? Yes.
Does it undermine the current CEO and/or BOD? Yes.
Did Ford handle it right by presumably firing Mr. Lymon? Yes.
Is Mulally doing something about this? Most assuredly, yes. (Just speculation on my part)
The big question is: Can he change this entrenched culture in Detroit that is divorced from reality like he did at Boeing in time to save Ford?
I thought Chris Theodore got sacked because of the multiple engineering problems the Ford GT had.
How nice of Joe Layton to throw a few Molotov cocktails behind him on the way out the door – sounds like classic Ford infighting. Mulally got a few bigwig resignations soon after he signed started from executives that wouldn’t bend to his way.
After making this disclosure, Mr. Laymon quickly became a former Ford employee.
While he left for Chevron, he left Ford for a reason, and I’ll bet that it is because he no longer felt comfortable as Mr. Mulally works to change Ford’s corporate culture. Which, quite frankly, is a good thing, and suggests that it’s no longer “business as usual” in Dearborn.
The bottom line is that Mulally is working hard at changing Ford corporate culture and revamping internal processes. From what I’ve read, he is doing just that. And he isn’t going around saying that manmade global warming is baloney, or that this week any Lincoln is as prestigious as a Lexus, or that the public understands what Ford’s brands represent because…he said so.
Ford’s quality has been dramatically improving for several years now – even Consumer Reports has noted this in its latest annual Auto Issue – and the company has (finally) sold Jaguar and Land Rover. Ford is working hard to bring the Fiesta to market, it is planning several Toyota-like improvements to the Fusion and Escape for 2009 (instead of letting them rot on the vine until the next complete redo, as it would have done during the Bad Old Days) and will introduce the Flex this year, which at least shows some original thinking in style and concept.
So, to me, this whole story is much ado about nothing.
Although, Mr Mulally has only been in the job for 18 months, I thought he’d done plenty to kill the toxic corporate culture at Ford? People running departments like kingdoms and no-one co-operating with each other and no pragmatism shown.
So for people to start talking about his successor when he’s barely 30% into his tenure, must be disconcerting for him.
It’s a shame, because I believe (as much as I hate to admit it) Ford is possibly in the best shape of the Big 2.801. They can make good cars (TOTALLY in love with the Ford Focus Coupe Cabriolet! And the Mondeo, current generation, would challenge the Camry and Accord in the NA market) and their brand does have an iota of respectability. They really need to get their house in shape and win customers back. If Ford can get their act together sharpish, I reckon in 5 years’ time, they’ll be a formidable match for Toyota and Honda.
We slate Rabid Rick for virtual inertia at GM, but that’s because he’s had 8 YEARS as CEO and 5 years as Chairman to do something, Mulally has had 18 months and has achieved more than Rabid Rick.
I think the board should show (at least for the cameras) total support to Mulally and don’t talk about his successor until nearer the date. It’s not fair on Mulally and no good can come of it.
On a side note, I hear Mark “What am I good for?” Fields is being touted as his successor. Why? He was CEO at Mazda and is credited with turning them around (It took him a year to turn a 155bn yen loss into an 8.83bn yen profit. Call me cynical, but how much of this turnaround was of work laid by previous management?), then went to the PAG and it STILL didn’t turn a profit (Why was that? He turned Mazda into a profit, didn’t he? Can you see where I’m going with this?) and then became head of the Americas division of Ford and they are still chalking up losses and haemorraging market share.
Mark Fields for CEO? He should have been sacked a long time ago!
The WSJ had an article that, to me at least, explained this in a somewhat less sensational way.
***
Mr. Laymon said he discussed the names of possible successors to Mr. Mulally after becoming aware that Automotive News was preparing a piece that focused on Mr. Farley, a former Toyota Motor Corp. executive, as the favorite to eventually succeed the current CEO.
“It was, I thought, opportunistic to acknowledge that Ford had a deep bench,” Mr. Laymon said, adding that his talk with the trade publication’s editors “wasn’t designed to make news; it was designed to clarify.”
***
The normal retirement age for Ford CEOs is 65. Mulally is 62. The reason Mulally got such a huge package from Ford for signing on is that Ford had no bench, and thus had to compensate him for what he’d lose if he left Boeing. This is just good management planning by Ford for a change.
If these guys are jocking for position as the next CEO, it’s going to be based on merit and success, not politics. If these guys don’t produce in the next 2 years, there won’t be a CEO position to ascend to!
I think they have done the best with what they have for the current generation of products, many many updates and improvements to old designs, but the real test will be the new products coming in the 2010-2012 model years, when we should see everything Ford sells being totally redesigned. Picture 2012 with the yet to be released Ford Flex and Lincoln MKS as Ford’s oldest designs….
I applaud Mr Laymon for being honest. In the business culture of today that is sorely lacking. He was actualy doing us that still hold stock in Ford a better service than the board of directors do. They couldn’t tell the stockholders the truth for fear that their tongues would catch fire.
Am I correct in thinking Chris Theodore didnt follow the “cookbook” correctly like his superiors wanted?
Frankly, with the same old same old infighting and back stabbing and incompetency, it’s a miracle that Ford Motor Company survived this far.
As someone else mentioned, this has been an endemic problem for this company since the original crazy, anti-semitic Henry Ford was in charge.
Not forgetting that Henry the 1st essentially killed his own (and only) son, Edsel, by mistreating him and not allowing him any leeway even when the title on Edsel’s door read “President of Ford Motor Company.” Edsel died of a stomach ulcer complicated by undulant fever, caused by another Henry idiocy – not allowing pasteurized milk from the family farm. Bacteria got through the ulcer and Edsel was dead.
Some say he died of a broken heart.
The more things change, the more they seem to stay the same, for Ford.
I avoid Ford products and have done so now for 15 years, after being let down so many times that I finally said “never again”. And I won’t go back. I “MIGHT” consider a Mazda, but that’d be as close as I get.
Of course, Ford only owns 1/3 of Mazda.
Relton:
Do you have a link to that old story?
Katie P. You and I have disagreed on a few things, but we violently agree on Fields talent or lack thereof.
on this topic, continual succession planning is a good thing…if done the right way.
menno,
Edsel Ford died of stomach cancer, though the family still blamed Henry for his death.
Edsel Ford is one of the people who invented automotive design and styling. When he tried to update the Model T, Henry physically attacked the prototype, ripping the doors of, kicking the roof.
Just to defend Michael’s editorial a bit:
While I think it is true that you could have written this article about any number of large corporations, Ford is rather unique in that it is so close to going out of business.
The message needs to be that if employees don’t start engineering, manufacturing and selling great cars, Ford will be gone, as will their jobs. Everything else is secondary.
The day that The Deuce (Henry Ford II) took over at Ford Motor Company, the first thing he did was fire Harry Bennett. He was gone that very same day.
Bennet wasn’t president of anything, he was head of FoMoCo’s Service Department, which meant he was head Ford’s in-house security force composed of a “goon squad” filled with ex-cons, and other charming gentlemen.
Bennett met Henry Ford I on the street one night, in the late 1920’s and saved him from a petty thief. He was Ford’s right hand man from then on, till canned by The Deuce.
Edsel was pushed into the background and was treated like shit by Henry, which caused his early death, the reason The Deuce took over at Ford.
It was Bennett’s goon squad that caused the famous “Battle of the Bridge” at the Rouge Plant, when Walter Reuther was attempting to organize the workers into the UAW. The goons beat Reuther and other union officials to a pulp, in full view of a news cameraman.
Did Laymon jump or was he pushed. Maybe he saw the knives were out for him and so he gave a glimpse into Ford’s front office politics before he left. Ford is no different from most large corporations where politics and bull is how people get ahead. All show and no go is what gets noticed and promoted. As an agent of change Mulally is making plenty of enemys so his days are numbered. Statements of confidence in Mulally remind me of a sports team front office praising a coach and saying his job is safe and then firing him the next day.
At first, you might think, who wants these jobs in a company sinking under the mire, about to float the bankruptcy beacon at any moment, then you remember the age-old truism…
The lower the stakes, the worse the politics.