Back when Microsoft was the biggest name in technology, CEO Bill Gates levelled an attack on the auto industry — if carmakers were as innovative as computer companies, he said, a car would cost just $27.
That was 16 years ago. Today, PC sales are falling as consumers show a preference for mobile devices, and Microsoft is struggling. Meanwhile, U.S. car companies are resurgent. General Motors, the world’s No. 2 carmaker, is gaining ground on No. 1 Toyota. And Ford, after 16 quarters in the black, expects to see $8 billion—plus in profit this year.
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It’s a testament to the changing times that Microsoft is reportedly considering Ford Motor Co. chief Alan Mulally as CEO Steve Ballmer’s replacement when he steps down in less than a year.
Mr. Mulally says he’s made no changes to his plan to stay at Ford through the end of 2014. But he hasn’t denied rumours that Microsoft Corp. is courting him. Ford’s board of directors will gather in Dearborn, Michigan, starting Wednesday. One of the items on the agenda will be a discussion of Mr. Mulally’s future at the company.
In contrast, Mr. Mulally helped Ford become the only Detroit automaker to survive the recession without a government bailout. He forced engineers to start building global cars such as the Focus instead of wasting billions making individual cars for each region. He sold or shuttered brands such as Volvo, Jaguar and Mercury, and ploughed cash into cars with edgier designs such as the Fusion sedan even in the midst of the downturn.
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Mr. Mulally is already being compared to Lou Gerstner, the former RJR Nabisco CEO who took over as IBM’s chief executive in 1993 and despite his lack of industry experience helped transform IBM from a money-losing personal computer maker to a profitable technology services company.
Mr. Mulally spent most of his career at Boeing in Seattle, not far from Microsoft’s headquarters in Redmond, Washington.
Mr. Ballmer, 57, has said his father worked for Ford for more than 30 years. And, Mr. Mulally and Mr. Ballmer are friends. Mr. Ballmer even spoke with Mr. Mulally over coffee about a wide-ranging re-organisation that Microsoft announced in July.
As a Top 5 holder of Microsoft’s shares, Mr. Ballmer’s support is essential, and Mr. Mulally would clearly have it.
Yahoo Inc., for example, regained some of its cool, and saw its stock price double after hiring as CEO Marissa Mayer, who’s 38. After arriving more than a year ago, she quickly moved to boost morale and improve Yahoo’s recruiting and retention of talented workers, the lifeblood of any tech company.
While Mr. Mulally is fit and enthusiastic, a turnaround of Microsoft could take five years or more. He would have to decide if he wants to be a CEO into his mid-70s.
“Unless Ford completely collapses, Alan’s tenure at Ford is going to be regarded as one of the greatest CEO stints in corporate history,” says Morningstar analyst David Whiston. “If he goes to Microsoft in a totally new industry and it doesn’t work out, that could tarnish his legacy a little bit.”