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Mulally preaches routine in times of disruption

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“There are companies that sell you a $120,000 car, and it rides along on a $70,000 battery. So it makes no sense.” Alan Mulally, retired CEO of Ford

PHOENIX — Alan Mulally believes good routines make for good decisions. The man who, as CEO of Ford Motor Co., instituted weekly executive reviews of all operations said consistent analysis is the best way for leaders to assess disruptive technologies.

“In today’s world, with autonomous vehicles, and electric vehicles that don’t make any sense, and a lot of things that do kind of make sense, and the competitors — the most important thing is you know what’s going on and you look at your plan,” Mulally, 73, said at the National Auto Auction Association’s annual convention here, where he was the keynote speaker. “If you’re looking at this every week and every month and every quarter, you get a really good feeling for these winds of change. And so you’re not going to be caught off guard. You’re consciously dealing with it.”

Mulally, who retired in 2014 after using weekly business plan reviews to turn Ford around a decade ago, said the adoption of EVs and autonomous vehicles and transportation as a service are going to happen one way or another.

But he spoke critically at the auction conference about the economics of battery-powered autos.

“Electric vehicles are fun, and you can get great electric vehicles from Ford, but they make no sense,” Mulally said. “And they’re not going to make any sense until we get another chemistry besides lithium ion. There are companies that sell you a $120,000 car, and it rides along on a $70,000 battery. So it makes no sense.”

‘A long way to go’

He also knocked government policy around the shift, particularly requirements in some states for zero-emission vehicle sales and the tax credits provided to encourage consumers to buy such vehicles.

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“We actually have to increase the prices on the vehicles that people want — to subsidize the vehicles that people don’t want, to make those quotas,” Mulally said. “How do you think that’s going as an energy policy in the United States? I don’t think very well.”

But there’s hope, he said.

“You can see a world, if you can make a breakthrough in the batteries, we can move the electricity from the grid to our homes, to our cars,” he said. “And then if we create it clean, now we are actually going to save the world.”

Efforts to develop transportation as a service will continue, Mulally said, but moving to fully self-driving vehicles — that need no human supervision — is the only chance such services have of making money. And while progress has been made, “there’s a long way to go on autonomous vehicles,” said Mulally, who is on the board at Alphabet Inc., parent company of Google and Waymo.

Ford leaders ‘will figure it out’

Mulally weighed in briefly on Ford, saying company leaders “will figure it out.”

“Ford, like everybody, is trying to figure out what’s going on, and it’s going to be messy,” he said. “It’s going to look messy because it is messy.”

His Ford comments were limited to efforts around new mobility services and the future of transportation. Ford ousted Mulally’s successor, Mark Fields, in May 2017 and replaced him with current CEO Jim Hackett. In July, Hackett launched an $11 billion global restructuring of the company.

“What I do know is, at Ford, it has the most talented people in the world, and they care,” Mulally said. “They know they’re working on something really important. And we’re going to be there at the end, and we’re going to figure it out.”

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