CHICAGO, Jan. 5, 2011 /PRNewswire/ -- Morningstar, Inc.
(Nasdaq: MORN), a leading provider of independent investment
research, today named Alan Mulally,
president and CEO of Ford, as its 2010 CEO of the Year.
Morningstar's annual award recognizes a chief executive who
exhibits exemplary corporate stewardship, demonstrates independent
thinking, creates lasting value for shareholders, and has put his
or her stamp on an industry.
"All three of our nominees this year are skilled leaders," said
Paul Larson, equities strategist and
editor of Morningstar StockInvestor. "Alan Mulally has implemented various measures
since he took the reigns of Ford in 2006 to position the automaker
to compete better. We believe that consumer psychology, vehicle
pricing dynamics, the growth in the pool of licensed drivers, and
the physics of vehicle wear and tear have contributed to millions
of units of pent-up demand in the U.S. auto industry since 2007.
Ford has prospered under Mulally's leadership, and we expect the
company's earnings growth to rise over the next few years as the
industry absorbs this latent demand."
Although he was an outsider to the automotive industry before
taking over at Ford, Mulally has proved himself through his
execution of several significant changes at the firm:
- Recognizing that rising fuel prices will continue to drive
consumers to buy cars rather than trucks, which Ford and other
Detroit automakers have long
depended on for profit, Ford has shifted more of its focus to the
production of high-quality cars. The Ford brand was fifth
overall in the 2010 J.D. Power and Associates Initial Quality
Study, ahead of Toyota and Honda.
- Ford is now building and manufacturing its automobiles on
common, global platforms, which will improve economies of scale and
allow the company to switch production faster to meet changing
demand.
- Beginning in 2010, the Voluntary Employee Beneficiary
Association (VEBA) took over United Auto Worker (UAW) health-care
costs from Ford, an agreement that puts Ford's U.S. labor costs
nearly on par with its non-U.S. rivals'.
"Morningstar holds Ford in high regard although the company
lacks an economic moat—a set of sustainable competitive
advantages—and scores poorly on Morningstar's stewardship scale.
However, the reasons behind these ratings are not tied to Mulally's
performance," Larson added. "Ford has dual share classes and a high
degree of family ownership. While we'd prefer to see a single share
class so outside shareholders can exercise greater influence over
the direction of the company, we put more weight on factors like
Mulally's efforts to procure as much cash as possible when he
became CEO by opening new lines of credit and selling off non-core
assets. When the recession and the credit crisis hit in late 2008,
the company's abundance of cash prevented Ford from having to rely
on government aid like some of its competitors. Also, we expect
Ford will use its free cash flow over the next few years to pay off
its debts."
The two other nominees for Morningstar's 2010 CEO of the Year
award were Jim Sinegal of Costco and
Richard Adams of United
Bankshares.
The Morningstar CEO of the Year award was introduced in
January 2000. Winners are chosen by
Morningstar equity analysts based on Morningstar's independent
research.
For Morningstar's article about the winner, go to:
http://www.morningstar.com/goto/ceo2010.
For the complete list of past winners, go to:
http://corporate.morningstar.com/CEOhalloffame.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent
investment research in North
America, Europe,
Australia, and Asia. The company offers an extensive line of
Internet, software, and print-based products and services for
individuals, financial advisors, and institutions. Morningstar
provides data on more than 370,000 investment offerings, including
stocks, mutual funds, and similar vehicles, along with real-time
global market data on more than 4 million equities, indexes,
futures, options, commodities, and precious metals, in addition to
foreign exchange and Treasury markets. The company has operations
in 26 countries.
©2011 Morningstar, Inc. All rights reserved.
MORN-C
Media Contact:
Carling Spelhaug, 312-696-6150 or
carling.spelhaug@morningstar.com
SOURCE Morningstar, Inc.