FOR a split second, Alan Mulally, chief executive-designate of the Ford Motor Company, struggled for the right word at his baptismal press conference.
“We’ll continue to work on making the best airpla-cars, in the world that people want to buy,” said the man who until this week had led Boeing’s civil aircraft division.
The American press ribbed him for hesitating, for being the new boy in the Motor City and for his later admission that he lacked experience: “I can’t wait to be a car guy.”
The car guy was sitting next to him — William Clay Ford Jr. — great-grandson of Henry Ford, the founder of the world’s best-known automobile brand. Ford is in deep trouble, its sales are plummeting, it is haemorrhaging cash and its debt has been relegated to junk status. Billy Jr spent five disastrous years struggling to put right his family firm. Not a few reckon that Ford could be headed for the great car park in the sky and on Tuesday, the scion of the Ford dynasty handed over control to an airplane guy.
Mr Mulally was hired because he put right Boeing when it was losing ground to a resurgent Airbus. He fired thousands and forced the Seattle factory workers to adopt new ways of making jets more cheaply, a trick that Ford desperately needs to emulate at its Dearborn, Michigan, plant. Ford, like its bigger sister, General Motors, has too many workers in too many places making too many models and it carries the huge burden of financing the healthcare of a ballooning population of pensioners.
Still, this business is not just about manufacturing, it’s about consumers. Last year Toyota pulled ahead of Ford for the first time in US sales. Ford’s line-up of gas-guzzling SUVs and dull compacts is unremarkable and each sale costs it thousands of dollars in incentives. Some are wondering whether a technician such as Mr Mulally can dream up a new vehicle to win over the American motorist, jaded by too much choice and disgruntled by high fuel bills.
If Mr Mulally is the man for the job, it may be because he is not a Ford and not from Detroit and the ship is sinking.
With 40 per cent of the voting rights in the firm owned by descendants of the founder, this is as good as a family business, but it is not the first time that an outsider has been given a chance at the helm. The family owners have a strange habit of loving and then loathing professional managers.
Henry Ford II, the previous family chief executive, sacked Lee Iacocca, who went on to run Chrysler. The company looked for new blood in the early 1980s, a period that coincided with another oil crisis.
A series of Ford executives led the group, including a Briton, Alex Trotman, a Dagenham trainee who rose to the top but had a cool relationship with the heir. When Billy Jr was made chairman, the Briton is said to have remarked: “So, you have your monarchy back, Prince William.”
Hired in to do a repair job, they don’t seem to last the course, these chief executives with the wrong surname. The last outsider was Jacques Nasser, the Lebanese-born son of an Australian immigrant who, when he finally reached the top of the Ford corporate tree, found himself facing his nemesis, the polite, Ivy League boy from the posh Detroit suburb of Grosse Pointe.
Billy Jr bided his time as chairman, allowing Mr Nasser to wade through the trenches, sacking 10 per cent of the workforce, cutting the dividend (an initiative that didn’t endear him to the family) and expanding into new businesses. He bought Volvo and Land Rover. More bizarrely, he diversified, acquiring the Hertz rental business, Britain’s Kwik-Fit and even car dealerships, a controversial move in the US, where selling cars is a mom and pop business.
Mr Nasser lacked the gentle touch, asserting his own origins on the wrong side of the tracks by dispatching less effective and less energetic middle managers. “The days of entitlement at Ford are gone forever,” he assured aspiring juniors.
Meanwhile, the man who was entitled waited for his opportunity. The Ford heir and the chippy immigrant’s son were remarkably ill-matched. Mr Nasser learnt to be a fighter when he moved, aged 4, to Australia, he said. “It taught me to read people very quickly. You’re on my team or you’re not on my team.”
Billy Jr must have seemed puzzling: a vegetarian who reads Buddhist texts and once caused alarm in Dearborn when he predicted the demise of the internal combustion engine. Still, the Ford boy did his stint in the trenches, using his patrician paternalism to good effect. When an explosion ripped through the Rouge plant, he ignored public relations advice and rushed to the site, where he was captured on television consoling bereaved families. He charmed union leaders, arriving at a pay negotiation sporting a United Auto Workers lapel badge: Bargaining for Families.
The Firestone tyre disaster may have put paid to Mr Nasser. Billy Jr allowed the chief executive to testify to Congress about the 200 road deaths linked to Firestone tyres on Ford Explorer vehicles. His performance drew little applause and he was pushed out in 2001.
Finally given the reins, Billy Jr struggled to inject his environmental passion into a business that was making money only by selling overpowered family shopping trolleys. With the sense of responsibility of a man inheriting a dynastic empire and more than a little business school jargon, Billy Jr tried to position Ford as a “green” car company. “A great company goes beyond profits and makes the world a better place,” he once said.
Neither the market nor the shareholders were in the mood for such experiments. Failing to produce a distinctive model — or even one that is tellingly green — Ford has been savaged by the competition, the oil price and growing disaffection with SUVs. Its mountainous debt and deteriorating profitability caused the rating agencies last year to eject Ford from the club of acceptable credits. Ford became junk.
Faced with turning round a juggernaut, Mr Mulally may feel it necessary to jettison the paternalistic Ford legacy, but some things are worth keeping. Ford’s founder had a nasty streak, he was a virulent anti-Semite, but he knew something about getting things made efficiently. He was a union-buster who bribed his men with double pay in return for higher productivity. If Mr Mulally can achieve the latter, he could change his name to Ford.
