Bill Ford has stepped down as chief executive of the Ford Motor group in favour of Alan Mulally, formerly of Boeing.
Mr Mulally becomes the president and chief executive of Ford while Mr Ford takes over as executive chairman. Mr Ford's relinquishing of the helm ends his five-year reign at the top, during which time two restructuring plans have been introduced to halt widespread decline.
The unexpected announcement is as much an important news story in the aviation industry as it is in the car industry, for Mr Mulally has been a key factor in driving the recovery of Boeing's commercial airplanes division during the last two years.
"Our turnaround effort required the additional skills of an executive who has led a major manufacturing enterprise through such challenges before," Mr Ford explained in an internal memo.
"That's why I'm very pleased to announce that Alan Mulally… will become our president and chief executive effective immediately."
Mr Mulally, looking back upon his time at Boeing, said: "I think the opportunity to work with Bill Ford and Ford Motor Company is the only thing that could have attracted me to a job other than Boeing, where I have so many great friends and memories.
"I'm looking forward to working closely with Bill in the ongoing turnaround of this great company. I'm also eager to begin engagement with the leadership team. I believe strongly in teamwork and I fully expect that our efforts will be a productive collaboration."
The 61-year-old had been in the running for the chief executive role at Boeing but the company spurned him in favour of Jim McNerney last year.
Now he faces a considerable challenge in attempting to put an end to Ford's dramatic decline in recent years.
The US carmaking giant has been forced into a second radical downsizing programme because of falling demand and poor product development, which saw it lose $1.3 billion (£686,000) in its first half results this year.