How GM, Ford Flipped Positions In Less Than 5 Months

May 15 2014, 5:24am CDT | by

Here’s why the auto industry never gets boring.

At the end of 2013, General Motors and Ford Motor seemed to be at opposite ends of the spectrum. Detroit-based GM was basking in the glow of a historic transition. Mary Barra had been named the first woman to head a U.S.-based automaker. The company was applauded.

Dearborn, Mich.-based Ford had questions whether its executive handover would go smoothly as Alan Mulally seemed to be going through his version of “The Long Goodbye.” An heir apparent, Chief Operating Officer Mark Fields, was in place. But there were questions just when and how Mulally would leave. Mulally was reported to be courted by Microsoft as a possible CEO and the Ford boss never quite put that to rest.

Now, GM has the uncertainty because of a continuing recall controversy while Ford’s executive lineup has been resolved. One got caught up in a crisis years in the making. One defied decades of its own history. Things change.

Barra, figuratively, didn’t have enough time to get the GM CEO seat warm when the automaker recalled ignition switches associated with accidents, injuries and deaths. Worse, the bad news came out in dribs and drabs. The problem had surfaced years earlier but GM didn’t do a formal recall until this year. The number of deaths was first put at six, then it went up to 13. The amount of first-quarter expenses for the recalls expanded.

The CEO testified before Congress and faced many press questions when she was made available to reporters. A bad sign:  Saturday Night Live did a parody of her congressional testimony. Management Rule No. 1: Having comics pretend to be be you on Saturday Night Live is almost never a good thing.

The latest news occurred May 14 when The Wall Street Journal reported GM’s board hired a law firm to review the flow of information to directors concerning product defects. The Journal also reported that the board meeting “at least weekly” with Barra to “monitor her overhaul of the company’s operations.” GM declined to comment to the Journal about its story.

The GM recall story is a long way from being resolved. In turn, that ensures GM’s uncertainty will continue — a much different story line for the company compared with the end of last year.

At Ford, executive transition was supposed to be ongoing story throughout 2014. But it didn’t work out that way.

First, Mulally finally, definitively said he wasn’t going to Microsoft in a January interview with The Associated Press.

On May 1, Ford announced Mulally’s retirement with a firm end date, July 1. Thus, the CEO is leaving before the end of 2014 (which was the previous plan). He won’t remain on the board as new boss Fields takes the helm. At other companies, CEOs have run into turbulence when their predecessors stayed on as directors.

Whatever happened behind the scenes, Ford did something very un-Ford like. Executive intrigue at Ford has filled books and countless news stories over the decades: Henry Ford II firing Lee Iacocca because he didn’t like him (1970s version); Donald Petersen alienating the Ford family, leading to him being forced out early (1980s and 1990s version); outgoing Alex Trotman calling Bill Ford Jr. “Prince William,” which wasn’t intended as a compliment (1990s); and Bill Ford deposing Jacques Nasser as CEO before hiring Mulally from Boeing to rescue the company (2000s).

In the end, whatever it took, Ford pulled off a smooth transfer. When a company goes against its historic grain in a positive way, goodwill usually increases.

But this isn’t the final word for either company. Automakers deal with issues that are often years in the making, which GM knows all too well with its faulty ignition switches. GM and Ford could well switch positions yet again. Who knows what the story lines will be five months from now?

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

IPad Air Giveaway 2014 is Online
IPad Air Giveaway 2014 is Online
Our sister site I4U News is giving away a brand new iPad Air or if you can wait an iPad Air 2. This is an $499 value.
 
 
Your Parent Or Kid Moved In: Are You Covered?
A record 57 million Americans now live in multigenerational family households — double the number in 1980, according to a new Pew Research Center study. And I bet many of them have the wrong homeowner’s or renters...
 
 
Pandora Looks to Challenge Terrestrial Radio's Dominance in Cars
Pandora Media is one of the largest Internet radio providers in the U.S. with more than 75 million active users. While the company’s active user count has increased at a robust pace historically, it is likely to slow...
 
 
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
Are General Manager Salaries About To Skyrocket? Will There Be A Front Office Salary Cap?
It’s January 2026. New York Yankees owner Hal Steinbrenner gets out of his driverless car and triumphantly marches before the gathered press to introduce his prized new free agent. It’s a record-breaking contract—over...
 
 
 

Latest from the Network

Whale tourism affecting marine animals' behaviour
London, Aug 27 (IANS) Boat trips to watch whales and dolphins may increasingly put the survival of marine mammals at risk, conservationists have warned. The jaunts can affect cetacean behaviour and stress levels in...
Read more on Apple Balla
 
OPEC daily basket closes higher
Vienna, Aug 27 (IANS/WAM) The basket of 12 crude oils of the Organisation of Petroleum Exporting Countries (OPEC) stood at $99.82 a barrel Tuesday, compared to $99.09 Monday, according to the OPEC Secretariat. The new...
Read more on Business Balla
 
Hamas lauds Egypt's support for Palestine
Gaza, Aug 27 (IANS) A day after Egypt brokered truce between Hamas and Israel, the Gaza-based militant group Hamas appreciated Cairo's historical role in supporting the Palestinian cause. Hamas's spokesperson Sami...
Read more on Politics Balla
 
Eight arrested for inciting youth to join IS in Saudi Arabia
Riyadh, Aug 27 (IANS) As many as eight people have been arrested for luring youth in Saudi Arabia into joining the Islamic State (IS) militant group, the country's interior ministry said here Wednesday. Interior...
Read more on Politics Balla
 
Jwala-Ashwini ousted from World Championships
Copenhagen, Aug 27 (IANS) Top Indian women's doubles pair Jwala Gutta and Ashwini Ponnappa were ousted in the second round of the World Badminton Championships, losing to Chinese fifth seeds Qing Tian and Yunlei Zhao...
Read more on Sport Balla
 
Pakistan's Air Force chief visits Sri Lanka
Colombo, Aug 27 (IANS) Pakistan Air Force chief Tahir Rafique Butt arrived in Sri Lanka Wednesday on a three-day visit at the invitation of his Sri Lankan counterpart Air Marshal Kolitha Gunatilleke. Air Chief Marshal...
Read more on Politics Balla
 
Clint Eastwood advised Styles to learn self-defence?
London, Aug 27 (IANS) Harry Styles has reportedly taken up training in the self-defence art of Krav Maga after actor Clint Eastwood advised the singer to improve his physique for a film career. The 84-year-old is said...
Read more on Celebrity Balla
 
Earth can sustain more terrestrial plant growth
Washington, Aug 27 (IANS) Our planet can produce much more land-plant biomass -- the total material in leaves, stems, roots, fruits, grains and other terrestrial plant parts -- than previously thought, says new...
Read more on Apple Balla
 
What brightens up the universe?
London, Aug 27 (IANS) Does ultraviolet light, that bathes the cosmos, come from numerous but faint galaxies or from a smaller number of quasars? The answer may not be too far in the future. A new method developed by...
Read more on Apple Balla