Report: Alan Mulally In Lead For Microsoft’s Next CEO

Kara Swisher is reporting that Alan Mulally is currently the top pick to become Microsoft’s next CEO.  I have reached out myself to induviduals familiar with the situation who tell me that the board is no where near a final list of candidates and Mulally has indicated he is not interested in the job.  Now, Mrs. Swisher has significantly more credibility than I do, so you’ll have to independently come to your own conclusion here.  Considering Mulally is approaching the age of 70, I still have trouble believing he would become CEO since he would have to plan his own succession almost immediately.  Now, Ballmer and Mulally are friends and he has advised the Microsoft CEO in the past.  Certainly it is quite plausible that Mulally could be giving Microsoft some guidance on picking their next CEO.

I will repost an editorial I wrote regarding Mr. Mulally some weeks back:

Why Do Investors Want Alan Mulally? (Hint: He Sold Off Major Ford Assets)

Ford CEO Alan Mulally’s name continues to pop up as a possible replacement for retiring Microsoft CEO Steve Ballmer.  I like Mulally and there is certainly no arguing that Ford would have gone bankrupt without him.  However, I do not think he is the right person to replace Ballmer, but could be an asset to Microsoft in another capacity.  Making planes at Boeing and cars at Ford is quite different from running a premiere technology company.

We recently covered a report, in which investors have been pressuring Microsoft to name Mulally as CEO.  Why would investors want Mulally as CEO? He isn’t from Google, Apple, Amazon, Twitter or some other hot silicon valley startup.  He isn’t fawned upon by the Technorati (excluding the times he does large ad buys on their “respective” websites).  Mulally isn’t young or hip.  He isn’t a rich socialite or fashionista akin to Marissa Mayer.  He isn’t a bully like Steve Jobs.  He doesn’t flaunt his money with yachts and young girlfriends like Larry Elison.  Instead Mulally is approaching the age of 69 and is the retiring CEO of a blue chip company.  So why do investors want him running Microsoft?

One of the important lessons I learned from Lester Freamon in the critically acclaimed show “The Wire,” was to “…follow the money [...].”  Let’s take a look at what Mulally did when came to Ford in 2006.  First he mortgaged the entire company’s assets, almost ~24 billion.  He then proceeded to focus Ford’s brand and sold off major assets including:

  • Jaguar
  • Aston Martin
  • Volvo
  • Land Rover
  • Mercury

Mulally was able to make billions in each of these sales.  He also significantly reduced Ford’s stake in Mazda.  Mulally sold off much else including Ford’s corporate Jets, closed factories, and outsourced what he could.  He also fought hard with the auto workers unions, reducing their pay from $76 to $55 per hour.  In terms of logistics he significantly reduced Ford’s inventory of automobiles and streamlined car models, brands, and production.  This all in the backdrop of a financial crisis in 2008 with General Motors and Chrysler nearly going bankrupt and forced to take government bailouts.  It’s easy to look good when your major competitors are failing around you.

During his time at Ford, Mulally has taken the company’s stock price from $1.80 to $17.31.  I think it’s clear as to why investors want Mulally as Microsoft’s next CEO.  They want him to come in and have a fire sale on Microsoft’s non-enterprise assets (Bing, MSN, Skype, Xbox, etc) and return those billions to shareholders in a special stock dividend.  This will drive up the share price, so they can sell that off and make even more profit.  I think investors also believe Ballmer would be open to naming Mulally as CEO, since Ballmer’s father was also an executive at the Ford Motor Company.  Ballmer and Mulally are friends and have met many times in Michigan.

However, Ford has not been a leading technology.  They have not been a leader in electric cars.  Their ‘MyTouchFord’ software is a disaster, even if it is slightly better than their competitors. *If* you were hypothetically were considering a car company CEO, wouldn’t Elon Musk make a significantly better choice.  His company has been forward thinking into the future to say the least.

As a side note, Mike Lawrie was also named in the report with Alan Mulally.  Unsurprisingly, he was previously a general partner at ValueAct.  The activist investor hedge fund who has recently gained a seat on Microsoft’s board, encouraging them to get rid of Ballmer and sell off Xbox, Bing etc.

Among Microsoft observers, I’ve seen little support for Mulally aside from Kara Swisher and Paul Thurrott.  Thurrott has long advocated that Microsoft should split the company up. (any question as to why Thurrott is being cannibalized by Tom Warren, wmpoweruser, etc?)

Follow the money.  Follow the money.

About the author  ⁄ Suril Amin

Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin

  • Bryan

    In my book, Kara Swisher has no credibility…the only thing she has “significantly more” of is a cock she likes to stick up Walt Mossberg’s butt ahahahhaahaha

    I don’t know why she keeps pushing this narrative of Mulally becoming microsoft’s next ceo. She never had any good microsoft sources. Only Sinofsky would entertain her, b/c of wsj, for official announcements. She’s only ever right about yahoo, and google b/c her wife is an exec there.

    • Bugbog

      You comment would read a lot better without the explicit misogyny!

      • Bryan

        Misogyny = hating all women. I don’t hate women, I just hate Kara Swisher.

        If someone were to criticize President Obama, that doesn’t make them a racist b/c he is black. They simply may disagree with some of his policies.

        • Bugbog

          Misogyny can be manifested in numerous ways, including sexual discrimination, denigration of women, violence against women, and sexual objectification of women

          Your comment would be discriminative regardless. As it is directed at a woman, the ‘misogynist’ appellative applies.

          With regard to your example, consider the following:

          - “President Obama is a bastard!”
          - “President Obama is a Black bastard!”

          One of the comments is ordinary criticism, the other is racist criticism. I’m sure you can figure out which is which.

          You may not hate women, per se, but that doesn’t give you a pass when you make a misogynistic comment either.

  • MMNME

    I hope not, but if he does, I hope he keeps the path with the new strategy. I like Elop myself, but there are other good choices out there too.

    • Yuan Taizong

      ¡¡¡¿¿¿E(f)lop???!!! :-
      Well, maybe he would be a good C.E.O. but I’m afraid he’d do
      to some Microsoft components what he did to Symbian…

    • donzebe

      I really think a younger person that is devoted and can energize the employees is needed. Elop can easily unite the employees ( Microsoft – Nokia ) since he’s been working with both for sometime now.

  • jaylyric

    Please excuse my ignorance.. But why would Microsoft want to sell off Xbox?? It’s really successful.

    • Asgard

      It is successful in the console war but both Sony and MS have made losses with current gen consoles. And they probably will make losses with the next gen too. It is insanely expensive business to be part of and there are only tens of millions gamers, compared to over a billion PC and smart phone users.
      Anyway I feel that MS has to be everywhere to be successful and do much better work in bringing all stuff it offers together.
      The next CEO should be some young geek, not an oldie.

      • Yuan Taizong

        (s)he should be a geek, but skills are more important than age, we shouldn’t look at demographics, there are plenty of young people who aren’t intereseted in tech and oldies that know more about tech than most youngsters do, let’s not discriminate on age against the next C.E.O. but 70 is indeed practically retiring…

      • Bugbog

        I read somewhere, if I correctly, that MS is looking to make a profit on every box it sells. This won’t be like the OG/360 days of loss-leading!

  • Kruegerman

    What does this dude know about technology? Microsoft is not a turnaround situation like Ford was. His experience in this area is not nearly as important as simply knowing about technology.

  • Orc

    I can’t see what this guy can bring to the table in a so different environment. In a war of ecosystems, you can’t sell assets and think you can gain ground.

    • Yuan Taizong

      Shareholders don’t care, they only see short term profits and then will sell their Microsoft assets and buy Apple assets or something, that’s how stock markets work.

      • Orc

        Long term investors do care.

  • Joe_HTH

    Well, if Mulally does become the next Microsoft CEO, get ready for Microsoft to be gutted and turned into another IBM. Mulally has no technology experience. He was a transportation engineer. I don’t know how that translates to being a great choice for CEO.

  • NegLewis

    He doesn’t even use the email.
    He has an old school feature phone.
    In his car it’s the most powerful MCU that he owns.
    BUT… Even if he will be elected he will not be able to sell one piece from MS
    After the first piece sold… MS stocks will implode.
    They just bought 30000 employees.
    They need to do something… reorganization.
    BG still has the only loaded gun (billions $). He will not allow it.

  • Eli_Vance

    Bringing Mulally in at MS would be terrible news. As stated his only ambition is to streamline business and make as much profit as possible for shareholders.

    This is another reason why the stock market can be terrible and ruins too many good things.

    • Yuan Taizong

      Yep, stock markets have little influence on the real life if you don’t take them too serious, even the largest crash in the NASDAQ’s history, which was the Dot-Com Bubble’s burst due to sloppy businessplans and over-speculations based on those plans lead to a 90% rate of those companies… staying afloat, yep 90% of those companies stayed afloat, this is one of the many reasons why I don’t trust the stock market, it’s not a realistic projection of the economy, those people are only interested in short term profits.

  • donzebe

    if the rumor is true…….
    Apple will be happy
    Google will be happy
    Microsoft might be shrink to an atom.

  • Yuan Taizong

    I’m still hoping that someone familiar with Bing, M.S.N. & Xbox will take over the company and will know how important those services are to Microsoft.

    • Orc

      I think Elop is the one that knows the importance of an ecosystem.

  • guest

    I fear the worst from this guy. I can see him doing away with the current direction of the company and further souring the MS brand (not what they need now) and that’s not needed especially after the Nokia acquisition.

    • NGM123

      Agreed. He’s a slash and burn merchant, he’s reactive, saving troubled companies from themselves & only concerned with the bottom line. That doesn’t bode well for a healthy innovative pro active company.

  • Tips_y

    One word only: YUCK!

  • WebUser

    70 years old, who probably never touch a computer in last 5 years. Why people make up things like this.

  • wp77

    What about Bill Gates. He’d make a great CEO and bring some pizazz back to the company, even in a figurehead kinda way.

  • krayziehustler

    Non techies should NOT be allowed to run technology firms.

  • krayziehustler

    The only ones who want Alan as CEO are those who want MS to collapse.