DETROIT -- Ford Chief Executive Alan Mulally has made it his mission to change the way the automaker does business, cutting stifling bureaucracy and knocking down fiefdoms in a sprawling enterprise he has criticized for lacking a unifying strategy for too long.
Analysts say the task is urgent and the clock is ticking for Ford as Mulally attempts to engineer a turnaround from last year's record $12.7 billion loss and reinvent the iconic American automaker as a leaner and more flexible competitor.
Now, nine months into the job, Mulally, who declined to be interviewed for this story, will face a skeptical audience of Ford shareholders at the company's annual meeting Thursday in Delaware.
Enticed to Ford in September from Boeing with a $39 million pay package, Mulally and his predecessor, Ford Executive Chairman Bill Ford Jr., are expected to face tough questions on reform efforts and the role of the Ford family.
Story Continues Below
Two restructuring plans under Bill Ford sputtered out, leaving Ford's stock down 70 percent over the six years since he stepped in to run the automaker founded by his great grandfather.
The Ford family's influence at the automaker, and its control of 40 percent of voting power through a separate class of shares, have been cited as contributing to a corporate culture critics call inward-looking, politically charged and risk averse.
"There are some individuals who still say they work for the Fords and that is a hangover from a long time ago and one of the problems," said Kim Cameron, professor at University of Michigan and an expert on corporate culture. "It's a legacy of 100 years. It's going to be very difficult to alter."
Whether Ford can change the way it works could determine whether the 103-year-old automaker survives, said Erich Merkle, director of forecasting for consulting firm IRN Inc.
Ford, Merkle said, needs to "inject a level of passion" in vehicle designs and avoid the "constant internal fighting" that has marred the company's recent history.
"The long-term viability of Ford depends on changing the corporate culture," he said.
ONE FORD OR MANY?
Ford has long been under the influence of strong personalities, such as Henry Ford II and former CEO Jacques Nasser.
Family scion Bill Ford Jr., who succeeded Nasser in 2001, recently told Portfolio magazine that the bureaucracy at the company stymied his efforts to turn it around.
"When I gave a directive, the system would slow-walk it... You know, if you have enough meetings...if you slow the train down long enough, people will lose interest," Ford said.
Ford told the magazine that he "literally didn't want to get out of bed some mornings" when he was working as CEO.
Many analysts say hiring Mulally, a Boeing aerospace engineer, was the best decision of Ford's tenure.
But after his appointment, Mulally told reporters that the lack of a common purpose at Ford was striking. "I have never seen a company with the lack of consistency of purpose as Ford," Mulally said in January.
Mulally, speaking to reporters at a dinner before the Detroit Auto Show in January, said he was surprised that various Ford business units presented sets of data and financial numbers that did not add up.
"There was no accountability," he said at the time.
One of Mulally's major campaigns has been the idea of "one Ford," a bid to leverage the automaker's global scale by reducing vehicle platforms and maximizing purchasing savings.
The move represents the biggest opportunity for growth at Ford as it catches up to work already underway at rivals like Toyota Motor Co, he has said.
Some credit Mulally with already making a difference.
"Everything I hear is positive, in terms of connection with the people of the company," industry observer Dave Cole, chairman of the Center for Automotive Research, said.
Still skeptics abound, including Ford investor Daniel Karpen, who is trying to sell Ford a headlight product for a decade. He said Ford appears to be paralyzed by bureaucracy.
"How many CEOs does it take to change a light bulb?" he asked.
© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.
Editor's note:
Buffett, Soros, Templeton, Rogers: Learn Their Money-Making Secrets
The 3 Best Income Stocks in the World
Learn the Money-Making Secrets of the World`s Four Most Successful Investors
