Boeing Co. executive Alan Mulally was unexpectedly chosen to become Chief Executive Officer of Ford Motor Co. , Bloomberg News reported on Tuesday.

Mulally will replace Ford's outgoing CEO Bill Ford, great- grandson of the struggling automaker's founder, said the report.

Bill Ford will become Ford's executive chairman.

Market analysts viewed the move as an indication that the business model that has worked for decades for Ford is clearly broken.

Bill Ford, 49, has been battling losses of 1.44 billion U.S. dollars in the first half of this year. Ford relies on sales of pickup trucks and sport-utility vehicles for profits. Sales of those vehicles have been falling, leading to losses in North America in seven of the past eight quarters.

Bill Ford, who took over as CEO in 2001, had said over the past year he wasn't necessarily going to have a long run as chief.

In an interview with Newsweek magazine this week, Bill Ford said he was willing to recruit people to fill jobs "regardless of the position". Asked by Newsweek if that meant "all the way up to your own job," Ford replied, "Absolutely."

In September 2005, he confirmed that he had approached Dieter Zetsche, now chief executive officer of DaimlerChrysler AG, and Carlos Ghosn, chief of Japan's Nissan Motor Co. and France's Renault SA.

Ford's decision to step down is a reflection of the magnitude of the reorganization that's now facing the company, David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan, was quoted as saying.

"They have to turn the company upside down," Cole said.

Editor: Yan