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2 Executives at Ford to Retire; Inside Successors Named

February 10, 2012
4 min to read


DETROIT — Ford Motor Company on Thursday announced the retirement of two members of its management team who were integral to its financial recovery and product renaissance.


The retirements of Lewis Booth, the company’s chief financial officer, and Derrick M. Kuzak, its global product chief, had been expected. But their departures will test Ford’s ability to continue its revival through leadership team changes, according to The New York Times.

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There was no indication that Ford’s chief executive, Alan R. Mulally, would leave at any time soon. However, the retirements of Mr. Booth and Mr. Kuzak narrowed the field of potential successors to Mr. Mulally and indicated that Ford was beginning to reshape its executive team for the future.


“I have no plans to retire and am absolutely thrilled and honored to continue to serve Ford,” Mr. Mulally, 66, said in a conference call with reporters.


But, he added, Ford is concentrating on developing new senior executives to continue its comeback. “Our plan is to have a very strong succession plan for every position, including my own,” he said.


Mr. Booth, 63, will be succeeded by Robert L. Shanks, who is Ford’s controller and has also been closely involved in the turnaround of its North American operations.


Mr. Kuzak, 60, will be replaced by Raj Nair, who is vice president of engineering and global product development.

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Both changes will become effective April 1, the company said.


Mr. Booth, who once was considered a possible successor to Mr. Mulally, has led Ford’s financial team during a critical period in which it has paid down debt and restored its stock dividend.


He was viewed by analysts as more than a financial specialist, someone who advised Mr. Mulally on strategic moves such as selling the Volvo luxury division.


Mr. Kuzak’s influence as group vice president for global product development has been profound. He was hand-picked by Mr. Mulally, who joined the company in 2006, to oversee Ford’s transition from a truck-heavy product lineup to one that features smaller, more fuel-efficient passenger cars.


“Lewis Booth and Derrick Kuzak represent the very best of Ford and our culture, and built a legacy of leadership, integrity and commitment to excellence that will benefit us for years to come,” said William Clay Ford Jr., the company’s executive chairman.

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In an unrelated move, Ford also announced that Jon M. Huntsman Jr., the former Utah governor and Republican presidential candidate, was elected Wednesday to Ford’s board.


Mr. Mulally deflected questions about further personnel moves, including the possibility of Ford’s appointing a chief operating officer to be groomed to succeed him eventually.


“The entire team continues to get stronger and stronger,” Mr. Mulally said. “But nothing is changing about the way we operate.”


Brian Johnson, an analyst with Barclays Capital, said the moves put Ford in a better position for whenever Mr. Mulally does retire.


“Who knows when Alan’s going to retire? All we know is it’s happening at some point, and it would make sense that you have the go-forward team in place before the C.E.O. leaves,” Mr. Johnson said.

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He said product development and financial management are among the most important areas for an automaker to have strong leadership, and the ability of the new leaders to have a good working relationship with each other is critical to Ford’s success.


Unlike its Detroit rivals General Motors and Chrysler, Ford’s turnaround was accomplished without a government bailout or a deep restructuring in bankruptcy court.


Instead, Ford, which is based in Dearborn, Mich., has become financially stable and increased its United States market share to 16.8 percent by shedding brands, integrating global business units and producing fewer models, but ones that can be sold in every region of the world.


The company reported $8.8 billion in pre-tax operating profits in 2011, the third consecutive year it has posted improved earnings. At the end of the year, its cash reserves exceeded its debt by $9.8 billion, an $8.4 billion improvement from the previous year.


But industry analysts have expressed concern that Ford’s results may plateau because of increased competition from G.M. and Chrysler, more gains by Hyundai and Volkswagen, and the budding comebacks of Toyota and Honda.

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Much attention will be paid to how Ford introduces new versions of two top sellers, the Fusion midsize sedan and Escape sport utility vehicle. Mr. Kuzak, the architect of Ford’s product revival, said that globalized vehicle platforms will continue to generate a variety of fresh models.


“You will see an increase in the cadence from us on new products,” Mr. Kuzak said Thursday. He said Ford is focusing on delivering higher profit margins by adding features and technology consumers will pay more to get.


Mr. Nair has an operational background in Asia, where Ford is investing heavily in new factories and a broader range of product offerings. “It’s certainly a focus going forward,” he said.


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