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Alan Mulally Driven to Serve

Carnegie Mellon University Provost and Executive Vice President Mark Kamlet opened the hour with thanks to Mulally and Ford for a long partnership with the university and the Tepper School, including sponsorship of Tepper’s Ford Distinguished Research Chair, now held by Sridhar Tayur, and the Henry Ford II Scholarship, established 40 years ago to recognize the top academic MBA student, currently Richard Huang.

“We greatly appreciate our long and rich heritage with Ford,” noted Kamlet, adding, “As CEO, Alan Mulally led the epic comeback of Ford from near failure to profitability and sustainability, avoiding the bankruptcies, restructurings and federal bailouts of rivals. He has been widely praised for managing by principle, attacking problems with data and building Ford’s culture of collaboration.”

Kamlet brought Mulally to the podium with additional recognition of Mulally’s long and successful career at Boeing, as well as his election to the U.S. National Academy of Engineering and England’s Royal Academy of Engineering.

Mulally began with his decision to take the helm at Ford after 37 years at Boeing, where to that point, he’d contributed to the 727, 737, 747, 757 and 767 airplanes and served as vice president and general manager of the 777 program.

“The automotive industry is so important,” Mulally emphasized. “It is a source of economic development, energy independence and security, as well as environmental sustainability.”

Mulally elaborated on his view of future technologies facilitating such independence and sustainability, notably improvements to the internal combustion engine, the greater development of alternative fuels and the electrification of vehicles.

“Electric vehicles will be the real enabling technology,” he observed, quipping, “Interestingly, Henry Ford was a friend of Thomas Edison.”

Ford was the chief engineer at Detroit Edison and embodied Edison’s spirit of innovation in his experiments with electric cars 100 years ago.

Mulally described how Ford provides a showroom with a full variety of powertrains and the ability to choose based on lifestyle, and described the future role of alternative energy sources like hydrogen.

After his short introduction, he turned the floor over to student questions, eager to “talk about what you want to talk about.”

Not surprisingly, the first topic raised referred to Mulally’s strategies enabling Ford’s success.

“You must deal with reality in every decision and make sure you are creating a viable, growing business going forward,” he maintained. He stressed the critical importance of brand clarity and bringing the company together as one team, worldwide, as well as commitment to a complete family of vehicles, with each being “best in class.”

“The most important thing is relentless implementation,” Mulally said. “Include everybody. All the stakeholders, the suppliers, dealers, investors, unions, everybody. Then come together around the vision and the strategy. It will spur innovation.”

To a question regarding leadership style, Mulally stressed the importance of uniting the team from a strategic point of view. “What is the vision for the organization? What are we here for? We found our vision with Henry Ford. What is the specific strategy for getting there? Make sure everybody knows it.”

On the topic of emerging markets, Mulally pointed out, “Henry Ford’s vision was to serve all markets around the world. Our international vision is even more powerful today,” adding the importance of “being very clear on what your brand is.”

When asked about the ‘mortgaging’ of the company, Mulally didn’t mince words.

“We had to aggressively restructure to get back to profitability.” He expressed the need to borrow enough and have a cushion, as well as the company’s later success in paying it all back, reinstating then doubling the dividend, and increasing the stock price from approximately $1 to over $17. “A plan is so important,” he stated. “Have a solid plan.”

Mulally discussed the global consolidation of Ford’s product portfolio, noting the company’s movement from 97 vehicle nameplates in 2006 to fewer than 35 today, with more than 85 percent of vehicles built on the same nine global core platforms.

Mulally also shared his views on technology replacing the driver.

“We are working to make drivers more aware and the best they can be in dealing with a situation,” he said.

“The improvement in safety is fantastic and we are proud to be working on that together with CMU.”

In commenting on his own career strategy and trajectory, he noted, “People will keep asking you to serve. Look in the eyes of the people you deal with. Do they like being around you? If it is all about you, they are going to know it.”

As the hour drew to a close, Mulally concluded, declaring, “Carnegie Mellon is a fantastic school. We have a great relationship,” as he grabbed Huang and shook his hand to ringing applause.