Back when Microsoft was the biggest name in technology, CEO Bill Gates
leveled an attack on the auto industry: If carmakers were as innovative
as computer companies, he said, a car would cost just $27.
That was 16 years ago.
Today, PC sales are falling as consumers show a preference for mobile devices, and Microsoft is struggling. Meanwhile, U.S. car companies are resurgent. General Motors, the world's No. 2 carmaker, is gaining ground on No. 1 Toyota. Ford, after 16 quarters in the black, expects to see $8 billion-plus in profit this year. And Chrysler is preparing to go public again.
It's a testament to the changing times that Microsoft is reportedly considering Ford Motor Co. chief Alan Mulally as CEO Steve Ballmer's replacement when he steps down in less than a year.
Mulally says he's made no changes to his plan to stay at Ford through the end of 2014. But he hasn't denied rumors that Microsoft Corp. is courting him. Ford's board of directors will gather in Dearborn, Michigan, starting Wednesday. One of the items on the agenda will be a discussion of Mulally's future at the company.
Here are the pros and cons of Mulally taking the wheel at Microsoft, a company whose stock price has been stuck in neutral for more than a decade:
THE PROS:
He has fresh eyes: As an outsider, Mulally could correct problems that an insider might not even see, like Microsoft's culture of interdivisional competitiveness or the fragmentation of its businesses. While its lucrative enterprise-computing services rival its bread-and-butter Windows business in revenue, Microsoft is losing billions chasing Google with its own Bing search engine. The company has also booked hundreds of millions in losses on its Surface tablet computer.
In contrast, Mulally helped Ford become the only Detroit automaker to survive the recession without a government bailout. He forced engineers to start building global cars like the Focus instead of wasting billions making individual cars for each region. He sold or shuttered brands such as Volvo, Jaguar and Mercury, and plowed cash into cars with edgier designs _ such as the Fusion sedan _ even in the midst of the downturn.
He told feuding executives to embrace the new plan _or leave. Most stayed and learned to appreciate Mulally's weekly meetings and focus on cooperation and transparency.
James Schrager, a professor at the University of Chicago's Booth School of Business, says Mulally was a ``genius'' at ``working person-to-person on the management side.'' The CEO helped Ford figure out ``who we really are as a company, where we're going to spend all our time and money and what we really have to achieve to be special to our customers.''
ONIKA JAISWAL
That was 16 years ago.
Today, PC sales are falling as consumers show a preference for mobile devices, and Microsoft is struggling. Meanwhile, U.S. car companies are resurgent. General Motors, the world's No. 2 carmaker, is gaining ground on No. 1 Toyota. Ford, after 16 quarters in the black, expects to see $8 billion-plus in profit this year. And Chrysler is preparing to go public again.
It's a testament to the changing times that Microsoft is reportedly considering Ford Motor Co. chief Alan Mulally as CEO Steve Ballmer's replacement when he steps down in less than a year.
Mulally says he's made no changes to his plan to stay at Ford through the end of 2014. But he hasn't denied rumors that Microsoft Corp. is courting him. Ford's board of directors will gather in Dearborn, Michigan, starting Wednesday. One of the items on the agenda will be a discussion of Mulally's future at the company.
Here are the pros and cons of Mulally taking the wheel at Microsoft, a company whose stock price has been stuck in neutral for more than a decade:
THE PROS:
He has fresh eyes: As an outsider, Mulally could correct problems that an insider might not even see, like Microsoft's culture of interdivisional competitiveness or the fragmentation of its businesses. While its lucrative enterprise-computing services rival its bread-and-butter Windows business in revenue, Microsoft is losing billions chasing Google with its own Bing search engine. The company has also booked hundreds of millions in losses on its Surface tablet computer.
In contrast, Mulally helped Ford become the only Detroit automaker to survive the recession without a government bailout. He forced engineers to start building global cars like the Focus instead of wasting billions making individual cars for each region. He sold or shuttered brands such as Volvo, Jaguar and Mercury, and plowed cash into cars with edgier designs _ such as the Fusion sedan _ even in the midst of the downturn.
He told feuding executives to embrace the new plan _or leave. Most stayed and learned to appreciate Mulally's weekly meetings and focus on cooperation and transparency.
James Schrager, a professor at the University of Chicago's Booth School of Business, says Mulally was a ``genius'' at ``working person-to-person on the management side.'' The CEO helped Ford figure out ``who we really are as a company, where we're going to spend all our time and money and what we really have to achieve to be special to our customers.''
ONIKA JAISWAL
PGDM 1ST YEAR
2013-15 BATCH
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