That Mulally was seriously being considered says a great deal about Microsoft and Mulally.

It appears that the chatter about Ford CEO Alan Mulally possibly leaving early to take over as CEO of Microsoft is losing air pretty fast. What's pretty interesting is that it got any traction in the first place.

That Mulally was seriously being considered a solid candidate to takeover the software and digital giant – after running old industrial Ford for seven years after a career at old industrial Boeing – says a great deal about Microsoft, and Mulally.

Mulally told USA Today: "I love serving Ford and have nothing new to add to [My] plans to continue serving Ford."

Ford spokesman Jay Cooney gave Autoblog the following statement: "There is no change to what we announced last November. Alan is absolutely focused on continuing to make progress on the One Ford plan. We do not engage in speculation."

He drove Ford out on a limb with its SYNC and MyFord Touch systems.

After inheriting a train wreck from his chairman Bill Ford in 2006, Mulally has been able to lead the company to 16 consecutive profitable quarters. He also drove Ford out on a limb with its SYNC and MyFord Touch systems, the former being powered by a Microsoft software platform. It's been balky and glitchy, but Ford is staying with the strategy of being out front and taking chances with telematics tech, even if it means sometimes getting ahead of where its customers are comfortable.

Microsoft is no Ford. It is not a train wreck. It is very profitable. But let's face it, Microsoft's size and locked-in dominance of operating systems and software keeps it a giant, if complex, cash machine. But it is a company in some disarray, and sorting that out seems to be Mulally's talent.

Here are some telling issues with the company:
  • Reuters and The Wall Street Journal reported that three large angry shareholders representing five percent of the company are calling for the ouster of Bill Gates as chairman.
  • Microsoft has been a laggard in mobile technology and online software development, say many experts and analysts. I'd have to agree based on my use of mobile phones and talking to our tech developers about our online products.
  • It has distractions from its core business like smartphones and Xbox. The latter, it can be argued, would be better spun off, as it is not part of that core. And who can forget the iPod challenger Zune? How about everyone?
Even so, the performance of Microsoft shares has been okay. In the last 52 weeks, Microsoft shares are up 38 percent compared with 35 percent for the NASDAQ composite.

Microsoft has been trying to follow a "One Microsoft" mantra that sounds a lot like Mulally's "One Ford" strategy.

So where does Mulally come in? It's not lost on anyone that Microsoft has been trying to follow a "One Microsoft" mantra that sounds a lot like Mulally's "One Ford" strategy. Mullaly has done a lot of business with CEO Steve Ballmer and chairman Bill Gates. It seems to be a mutual admiration society.

Why do those guys have a lot of time for Mulally? Slogans with the word "One" can be written by everyone. Mulally got everyone at Ford to focus on building up the Ford-branded vehicle business worldwide. He jettisoned Aston Martin, Jaguar, Land Rover, Mercury, Volvo and Hertz. He might have sacked Lincoln too, and may still wish he had, but was sold on the idea of keeping one premium brand in the house. Ask anyone at Ford, and they will tell you Mulally brought zen-like focus to the company.

He got the organization focused on one plan, and he relentlessly drove it into the team. He replaced remarkably few executives. A few prominent outsiders have come into key posts – Jim Farley as head of global marketing and some folks in the sales organization. The executives who were killing Ford quickly self-selected themselves out, either in the months before Mulally arrived or just after. It was remarkable to see dullards and dolts of the previous regime leave like roaches when the lights go on. Those that stayed signed up for the plan, and stuck to it. If they strayed, they'd be gone.

Mulally is a design engineer by training, and has logged his decades working for two companies – Boeing and Ford – that utterly rely on the integration of complex technology and the ability of the workforce to focus on the right things.

Having reported on and observed companies and CEOs for 25 years, I see that the ability to focus a workforce around a single idea may be the most under-rated skill in business. The idea that Microsoft understands that it needs someone with that extremely hard-to-find talent may be the first indication that the company is ready to move into a post-Bill Gates era.

UPDATE: An earlier version of this column described Microsoft's smartphone and Xbox businesses as "unprofitable." While some reports have cited Xbox as losing money, Microsoft chief marketing officer Yusuf Mehdi recently told GamesIndustry that Xbox 360 is profitable in the "tail" of its lifecycle, which has three more years to go. According to MotleyFool, Microsoft makes $10 on each smartphone it sells, well below comparable margins of competitors, but a profit nonetheless.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 42 Comments
      Jake
      • 1 Year Ago
      XBOX is unprofitable? Since when? Seems like so many in the media get iphone blinders where mobile is concerned. Windows phone has overtaken iOS in many places around the world and continues to grow thanks in no small part to the deals with Nokia. It is very trendy to knee-jerk to hate on Microsoft without any real analysis.
        SquareFour
        • 1 Year Ago
        @Jake
        Yep. Fans of brands/companies are funny. In actuality, Apple is a purveyor of overpriced tech, some of which is done better by competitors for less money, as brilliantly pointed out in those iPad vs Surface commercials. My guess why there's this knee-jerk hate is two fold: 1). the stories of buggy Windows programs from 2 decades ago has grown into irrational hate, and is still hanging around influencing the opinions of even those who didn't actually ever use these programs; and 2). many don't want to admit they paid a premium for their iPhone/Pad for no good reason.
          Jake
          • 1 Year Ago
          @SquareFour
          I suffered through a lot of Windows 98 blue screens and was as aggravated by internet explorer as the next guy. I have also had an 4th gen ipod that would freeze/hang at least twice a month and have to be fully restored by tethering it to a computer with itunes in order for it to work again. I currently use Windows 7 at home and at work and it has been flawless. I have a 6 year old XBOX that has been flawless. MS Office products are superior to any of the freeware stuff out there. I haven't returned to internet explorer yet as I love firefox too much.
        funguy6713
        • 1 Year Ago
        @Jake
        Exactly! The writer should stick to writing about autos and not tech...and even as an auto writer he didn't mention Mulally's huge misstep with Lincoln costing FORD billions in annual profits...
          GFB
          • 1 Year Ago
          @funguy6713
          Huge misstep with Lincoln indeed!
      Benjamin Roethig
      • 1 Year Ago
      Mulally is an aerospace engineer. A lot of that is transferrable to auto manufacturing. Not much of it is transferrable to software engineering or consumer electronics. Name one success story of a tech company being profitable under an outsider? You'd end up with the c-level team fighting for the real control.
        oRenj9
        • 1 Year Ago
        @Benjamin Roethig
        The key reason that Mulally was able to turn around Ford was because he was able to get everybody to either tow the line, or to leave. Ford was riddled with executives engaging in turf wars, sabotaging each other, and sweeping critical issues under the rug. Mulally's approach to leadership is very data-driven and focuses on identifying issues, getting the right people involved to tackle those issues, and then following up to ensure that the issues actually get resolved. This approach is general enough to work at any large business, it's not just limited to manufacturing. It's funny that you mention how none of his skills are transferable into software engineering; that was exactly what everybody was saying when they learned he was going to take over Ford. People just kept saying how different Ford was because they had to deal with labor unions and thousands of parts suppliers, etc. He managed to prove all of those nay-sayers wrong, I'm sure he can do so again.
      • 1 Year Ago
      [blocked]
      Seal Rchin
      • 1 Year Ago
      David Kiley writer of this articles seems to know what he is talking about. I know let's check out his Twitter Feed. https://twitter.com/davidkiley @JimDeMint @Heritage America deserves affordable healthcare available to everyone, and to have it decoupled from employment. Think boycotting @BarillaUS doesn't matter? Quite the contrary, and here's why you need a different pasta: http://ht.ly/piDtz (looks like this guy does not boycott any food at all) It takes two presidents to pitch Obamacare. WATCH video of Clinton and Obama: http://on.msnbc.com/16GXkIw @SenBobCorker @CNN Obama is going to get rid of chem weapons without bombing. Learn from him GOP if you dare. HMMMMM, should we even care about what this guy thinks?
      NewTexian Brewery
      • 1 Year Ago
      Seriously, enough with the love fest of Mulally, already.
      Brodz
      • 1 Year Ago
      Go fix Microsoft, I hate Apple.
      mopyouup
      • 1 Year Ago
      Mulally is was big part of why Boeing has had a disasterous time with the 787. I say let him go to Microsoft, I'd love to see MS go away since Bill Gates is the father of the MEDIOCRITY in the product/service world today. Never before had a product been so short on substance and so long on problems ever been so succesful. It all went severely down hill from there in almost all industries. Product a half baked product, offer no support and let the users find and solve the problems themselves. All in the name of short term profits.
        Jake
        • 1 Year Ago
        @mopyouup
        I am impressed that you were about to pack that much nonsense in to one comment.
          Jake
          • 1 Year Ago
          @Jake
          Comprehend what? Your baseless hate-filled rant about Bill Gates and Microsoft products? So, short on substance and long on problems? Which product is that? The company has a wide variety of leading products. The most successful desktop operating system ever? The best office tools available? The top enterprise network and server products and tools? Leading cloud drive tools? Leading database tools? Their leading gaming system? No support? Ever been to their websites? They have miles of tutorials, message forums, answer boards, free development tools? You have no idea what you're talking about.
          mopyouup
          • 1 Year Ago
          @Jake
          Freedom of speech :) Although that seems to be going away not to mention that most people can't handle the truth they created. Did you comprehend it though? I would think not since you've got no substantive response.
          mopyouup
          • 1 Year Ago
          @Jake
          Baseless hate filled rant about Microsoft? You are clearly a paid spinster for Microsoft! Blue screen of death, useless software offerings, freezing, the need for ctrl/alt/del. A monopoly on operating systems that not even the FEDS could quash. Great operating system versions like Windows ME, Vista, and now Windows 8. Taking 20+ years to have useful office tools to work properly, the crash prone server operating systems (IBM 20 year old AS400 systems make MS server sofware look like worse than a childs attempt to make software). Leading cloud tools bah! Google kills them! I'm not in the gaming generation so thats subjective. I talk to people when I have a problem but they bend you over for that with support fees for fixing their incompetence. You children are ok with wasting endless time searching, reading and developing fixes for problems that should have been resolved before the products were released. The facts go on and on and on! Wow you are clueless! Not to mention too young to know all the facts not just the recent history of improvements. XP was the first decent version and I love 7 but other than that the rest is junk!
        Cruising
        • 1 Year Ago
        @mopyouup
        "Mulally is was big part of why Boeing has had a disasterous time with the 787" The 787 is more pivotal aircraft to Boeing compared to what people think, what they are learning from this plane is slowly infusing that technology into other models like the 747-8, eventual next gen or replacement 777 and updated or replacement 737. The 787 is providing the technological framework for Boeing passenger jets for the next 20-25 years, not to mention a excellent replacement for the 767 which has a huge market. Did Airbus have smooth sailing with the A380? No. Cracked wings, delays, the Qantas engine failure to name a few. Now they are fixed and working.
          mopyouup
          • 1 Year Ago
          @Cruising
          I am a die-hard Boeing fan but you are missing the point. Launched to the public on 7.8.07, what year is it? The second major grounding of commercial in modern history (not including the comet from the 50's). I agree they had to move in the modern materials direction but the outsourcing was a huge mistake but the reality is it looks go to the stockholders because the bulk of the development costs were born by the hundreds of suppliers rather than Boeing. Makes the balance sheet look really good.
      d
      • 1 Year Ago
      Mullaly increased profit for Ford by cutting costs. It is a short term measure and can not guarantee profitability over the long run. He also borrowed billions from the US government DOE advanced vehicles program. Close to the direct bailout of GM and more than what Chrysler received. This money went directly into Ford's books to bolster the balance sheet. Any company can look good if you inject billions of dollars of capital into it. The loan rates were below 1% for most of the money. Go to your bank and see if they will give you money below 1% interest. Because the money was given out through the DOE program run through the Treasury, it didn't count as a bailout. But it amounted to the exact same thing. Treasury lending also is counted off the books and not counted in the government budget. Mark to fantasy accounting also benefited Ford over the past few years just like the rest of the Wall Street garbage pit. Mullaly is a crony capitalist of the worst kind. But seems to be good for shareholders, so that is all that matters.
        oRenj9
        • 1 Year Ago
        @d
        You seem to be implying that Ford is only profitable because of DoE loans; that is blatantly false. Ford is profitable because they spent the better part of three years improving quality, trimming labor costs and matching production to demand. Ford's model is absolutely going to be profitable in the long run; the only reason you believe the contrary is because you don't understand what is really going on. If you want to really understand what happened to Ford under Mulally, I suggest reading An American Icon. It goes into great detail about what Mulally and his team had to do to restore Ford to profitability, including putting up the Ford name itself as collateral to secure enough loans from private banks. It also details meetings between Rick Wagoner and Mulally during the period of the bailout.
        merlot066
        • 1 Year Ago
        @d
        Mulally restructured the company and cut costs while at the same time modernizing every single product in Ford's lineup. Imagine what he could do at Microsoft with the stacks of cash they have laying around. Also, DOE loans didn't bolster Ford's balance sheet or save the company. A *balance* sheet must *balance*. Whatever cash was added through DOE loans was reciprocated by the increased liabilities. Further, the DOE loans allowed Ford to accelerate development of their second-gen hybrid system and retool their assembly plant for flexible Focus/Electric Focus production.
        ckm
        • 1 Year Ago
        @d
        Actually, the money that saved Ford came from Bill Ford leveraging every single asset at Ford, including the logo. That resulted in a $20 billion pot that he then handed to Mullaly. All of this occurred well before the financial meltdown and it's mostly what carried Ford through rough times. Because of this, Ford did not have to borrow money or declare bankruptcy. By the time the crisis happened, they were in much better shape than the other two. As far as DOE loans, any business would be stupid to turn down free money from the government, but it was only a small amount compared to what they raised privately (about 20%) and it was in the form of a loan, like all the private capital they raised. It was not cash for equity and is being repaid. And, BTW, Nissan also got an ATVM (aka DOE) loan...
      Cruising
      • 1 Year Ago
      What's interesting is top investors of Microsoft are asking Bill Gates to step down.
        sumduud
        • 1 Year Ago
        @Cruising
        Bill Gates doesn't run the company anymore and hasn't for years. Do some research before you post.
          sumduud
          • 1 Year Ago
          @sumduud
          Scratch my last comment. I thought you were referring to Bill Gates as CEO which he is not. He does however still hold about 5% of the company's stock alone.
          Daniel D
          • 1 Year Ago
          @sumduud
          Being the founder of the company and on the board he does have quite a lot of influence.
        Cruising
        • 1 Year Ago
        @Cruising
        Bill Gates is still a chairman and advisor to Microsoft: http://www.microsoft.com/en-us/news/exec/billg/ Article about the investors wanting him to step down: http://www.businessinsider.com/investors-call-bill-gates-resignation-2013-10
      protovici
      • 1 Year Ago
      ROCK CHALK JAYHAWK, Mr. Mulally for Prez!!
      Jarda
      • 1 Year Ago
      after reviving Ford Alan is my hero should he sink Microsoft i would consider him a god
        • 1 Year Ago
        @Jarda
        [blocked]
      • 1 Year Ago
      [blocked]
    • Load More Comments