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Ford names new chief executive Ford names new chief executive
(about 1 hour later)
Ailing US car firm Ford has announced that former Boeing boss Alan Mulally will replace Bill Ford as chief executive.Ailing US car firm Ford has announced that former Boeing boss Alan Mulally will replace Bill Ford as chief executive.
Bill Ford, the grandson of the firm's founder, will however maintain his post as executive chairman.Bill Ford, the grandson of the firm's founder, will however maintain his post as executive chairman.
The news comes after the firm revealed a $1.3bn (£680m) loss in the first six months of 2006.The news comes after the firm revealed a $1.3bn (£680m) loss in the first six months of 2006.
Mr Ford recently said the firm needed a completely new business model to return to profitability.Mr Ford recently said the firm needed a completely new business model to return to profitability.
At the same time Mr Ford said the firm needed to look into tie-ups with other car firms. Competition
"Mr Mulally brings a lot of skills in cutting structural costs, where Ford needs to make progress" said analyst Mark Oline of Fitch ratings. Mr Mulally brings a lot of skills in cutting structural costs, where Ford needs to make progress Mark Oline Analyst, Fitch ratings
But he added that "Ford remains challenged to stabilise market share losses and revenue declines." At the same time Mr Ford said the firm needed to look into tie-ups with other car firms as well as make more profits from its cars and smaller sports utility vehicles (SUVs).
The move is striking because it marks someone from outside the car industry as well as someone from outside the Ford family. "Mr Mulally brings a lot of skills in cutting structural costs, where Ford needs to make progress," said analyst Mark Oline of Fitch ratings after the announcement.
The firm has faced stiff competition from Japanese car firms in recent years as consumers have switched to more efficient cars away from gas guzzlers. But Mr Oline added that "Ford remains challenged to stabilise market share losses and revenue declines."
Like General Motors, Ford has faced stiff competition from Japanese car firms in recent years, as consumers have switched to more efficient cars away from gas-guzzlers.
"Ford wouldn't be in this position [of declining share] if it didn't have these problems on the product side, said Erich Merkle, analyst with Irn.
"What Ford has to do on the product side is to get back to an understanding of why people purchase cars and take more risks in terms of design," he said.
Restructuring
In an email to Ford employees, Bill Ford said that the firm's turnaround scheme "required the additional skills of an executive who has led a major manufacturing enterprise through such challenges before".
Mr Mulally, who leaves Boeing after 37 years, has been credited with "making an old manufacturing company revive and thrive" said the BBC's North American business correspondent Guto Harri.
Bill Ford oversaw two restructuring plans, the most recent which started seven months ago, but this failed to improve the firm's financial position.
Under this latest plan, the firm said in January that it would cut 30,000 jobs and shut 14 operations by 2012.
The Ford family still retains a 40% voting stake in the eponymous car firm.
Shares in the firm closed 30 cents higher to $8.69 after the bell.