Chris Woodyard

USA TODAY

Ford CEO Alan Mulally puts rumors to rest

He says he won%27t leave Ford in an interview with the Associated Press

But he won%27t say how far talks went to replace Steve Ballmer at Microsoft

Ford Motor shares rose while Microsoft stock fell Wednesday morning after Ford Motor CEO Alan Mulally said late Tuesday that he will not leave his job at the automaker this year.

Numerous reports have speculated he was in the running to succeed retiring CEO Steve Ballmer at Microsoft. But in an interview with the Associated Press, Mulally said firmly that has no plans to leave. And Ford officials confirmed the AP report to USA TODAY. "Alan made it perfectly clear that he wanted to end all speculation. He has no plans to do anything else other than continue serving Ford," says spokesman Jay Cooney

Mulally would not disclose to the AP whether he had talked about the CEO job with Microsoft, but did say that the speculation had become distracting for Ford.

Ford shares were up 1.5% to $15.61 in morning trading and Microsoft slipped 1.3% to $35.94.

Mulally, 68, had said previously that he would stay at Ford through 2014. The company has a transition plan in place that created a new chief operating officer position for Mark Fields, the former president of the Americas, making him the heir apparent. As COO, Fields is overseeing day-to-day operations.

Mulally came to Ford in 2006 at the behest of then CEO and now Executive Chairman Bill Ford. He is credited with turning Ford around and saving it from the bankruptcy reorganizations undergone in the financial crisis by the other U.S. automakers. He has reorganized operations worldwide, streamlined the product line and dramatically increased its profitability.

Adding to the Microsoft speculation was that his revival of Ford had some analysts talking about his chances of leading the tech giant. "We think it likely that Ford Motor CEO Alan Mulally is Microsoft's top pick based on the merits of his candidacy and will be named Microsoft's new CEO in a month or so," wrote Nomura Equity Research's Rick Sherlund in a note to investors in November.

Also, Mulally has a ties to Seattle, where he ran Boeing's commercial aircraft business before coming to Ford in 2006. Microsoft is based outside Seattle.

But the speculation dragged on for months without a definitive statement from Mulally. The Ford board, which had said it would let him decide, reportedly had become impatient.

Mulally's announcement was a step he had to take, especially against a backdrop of General Motors last month naming Mary Barra to succeed CEO Dan Akerson and Fiat last week announcing a deal to acquire all remaining shares of Chrysler, says Karl Brauer, senior analyst for Kelley Blue Book.

"We see the other players in the space settling down for an important year," Brauer says. "If Mulally hadn't done it, they would have continued (with) misdirection and questions about who is running Ford."