The Motley Fool’s readers have spoken, and I have heeded their cries. After months of pointing out CEO gaffes and faux pas, I’ve decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here’s my previous selection.
This week, we’ll turn our attention to the automotive sector and focus on Ford Motor Company (NYSE:F)‘s CEO, Alan Mulally, who has done a phenomenal job of turning around the once-aching car company.
Kudos to you, Mr. Mulally
Based on Ford’s rising share price you’d just assume that things are peaches and cream in the automotive industry… but that couldn’t be further from the truth.
General Motors Company (NYSE:GM) is still struggling with the stigma of having declared bankruptcy in 2009 and utilizing government loans to finance its operations during its restructuring. Also, what Japanese automakers Honda Motor Co Ltd (NYSE:HMC) and Toyota Motor Corporation (ADR) (NYSE:TM) have gained in terms of U.S. market share they’re ceding in rapidly growing China because of ongoing distrust between the two nations. On top of this, global growth in many developed markets isn’t very conducive to strengthening sales. Both the U.S. and China’s GDPs are growing well below their historical average, while Europe has been a disaster for nearly all automakers due to region-wide austerity measures.
Despite these concerns, Alan Mulally has masterfully positioned Ford Motor Company (NYSE:F) to succeed by steering the company toward sleek, fuel-efficient designs, and driving over the competition in China.
One primary key to Mulally’s success as CEO has been the introduction of the EcoBoost engine. Built with turbochargers that are meant to add serious power when needed, EcoBoost engines run leaner the remainder of the time which makes them considerably more fuel-efficient. Better fuel-efficiency means fewer out-of-pocket costs for consumers, ultimately leading to a happy customer.
Perhaps Mulally doesn’t get nearly as much credit for his innovation when you have geniuses like Elon Musk, CEO of Tesla Motors Inc (NASDAQ:TSLA) , forecasting the rollout of 21,000 all-electric Model S sedans this year. However, Tesla is also crippled by its own production capacity and the fact that little electric-vehicle infrastructure currently exists. Make no mistake about it: This is still a combustion-engine-dominated auto market, and Mulally isn’t getting nearly his fair share of accolades with regard to his innovative skill set.