Long before he was hired last September, the struggling company had decided to stop making what once was the most popular car in the United States, a decision that had him perplexed.
"How can it go away?" he remembered asking. "It's the best-selling car in America."
On Wednesday, at Mulally's insistence, the company announced that it was reviving the Taurus name.
The Dearborn, Mich.-based automaker made the official announcement at the Chicago Auto Show that it would place the storied moniker on the 2008 version of the Five Hundred.
Ford is simply slapping a new nameplate on the slow-selling Five Hundred sedan, reports CBS News correspondent Kelly Wallace, banking on the idea that familiarity breeds sales.
In addition, an upgraded version of the Freestyle crossover vehicle will be re-badged as the Taurus X, and the Mercury Montego, the Five Hundred's cousin, will be renamed the Sable in the coming model year. The Sable was the Taurus' nearly identical cousin, with 2 million sold under the Mercury name.
Mulally, in an interview with The Associated Press, said the Taurus' demise was one of the biggest disappointments he discovered as he started work. He still hasn't found out why the company gave up on the name of a car purchased by 7 million buyers during its 21-year history. All he knows is the decision was wrong and needed to be fixed.
"The Taurus, of course, has been an icon for Ford and its customers," Mulally told the AP. "The customers want it back. They didn't want it to go away. They wanted us to keep improving it."
The Five Hundred, which Mulally used for a time as his personal car, should have been named the Taurus all along rather than starting with a new name, he said.
"Think of how much time and attention and money it takes to establish a brand," Mulally said. "It's going to take unlimited effort and time to try to build up the brand that we have with the Taurus."
The Five Hundred, built on a Volvo frame and considered a capable but dull car by industry analysts, never took hold in the marketplace. It sold moderately well in 2005, its first full year on the market, but sales nose-dived last year from almost 108,000 to about 84,000.