American Icon

by Bryce G. Hoffman

  At the end of the 1990s, the chairman the family had in mind was William Clay Ford Jr. Known as Billy to the rest of the family and Bill to most of Detroit, his roots in the automobile industry ran deep, even for a Ford. His father, William Clay Ford Sr., was the youngest of Edsel Ford’s four children. His mother, Martha Firestone, was the granddaughter of Harvey Firestone, the founder of Firestone Tire & Rubber Company, which had pioneered the mass production of tires and supplied them for Ford’s Model T.

  The dimple-chinned Bill Ford looked nothing like his gaunt great-grandfather, Henry. He more resembled his softer and better-fed uncle, Hank the Deuce. The first thing most people noticed about the young Ford, besides his bright blue eyes, was his quick intellect and easygoing demeanor. He was personable, quick to smile, and possessed a self-deprecating sense of humor that was entirely unexpected in a man of such means.

  Born in Detroit in 1957, Bill grew up in the posh enclave of Grosse Pointe Shores alongside Lake St. Clair. His father was a member of Ford’s board of directors and served as vice president and general manager of the company’s Continental Division. Bill grew up listening to discussions around the breakfast table about the company and the car business. But by the time he was in grade school, his father’s real passion had become football. William Clay Ford Sr. purchased the local National Football League franchise, the Detroit Lions, in 1963. The team rarely won, but it was not for want of trying. The elder Ford was fiercely competitive, and he tried to instill that same spirit in Bill and his three sisters.

  “Everything we did in our house was hypercompetitive,” Bill Ford would later recall, describing how cards and trivia games became contact sports in the Ford household. “The most innocent after-dinner game became cutthroat. There were no gracious winners and no good losers.”

  Bill grew up surrounded by wealth and power. The family would winter at their home at Smoke Tree Ranch in Palm Springs, California. There the young Ford would wave at Walt Disney, who had a place down the street, and wait for his father to return from a round of golf with Uncle Frank—Sinatra, that is. But Ford pushed beyond the comfortable confines of his privileged childhood. He played hockey in a youth league in the blue-collar community of St. Clair Shores—often facing off against kids whose fathers toiled in Ford’s factories. He inherited his great-grandfather’s love of the great outdoors. Ford’s fondest childhood memories were of summers spent at Fontinalis, a private fishing club in northern Michigan where he spent his days casting for trout along the banks of the Sturgeon River.

  Like his father and grandfather, Bill Ford attended the prestigious Hotchkiss School in Connecticut, where he could study in the Edsel B. Ford Library or rush the net on the William Clay Ford Tennis Courts. Bill preferred football and hockey, but his sense of family history was strong. It was hard to miss growing up in southeast Michigan, where the Fords were regarded as American royalty. In Detroit, the names of Bill’s ancestors adorned not just tennis courts and libraries, but also hospitals, freeways, and, of course, automobiles.

  After graduation, his father handed him the keys to a one-of-a-kind metallic green Ford Mustang and sent him to Princeton, where Bill Ford wrote his senior thesis on Henry Ford’s relations with the UAW. In college, Ford threw himself into the even tougher sport of rugby with a fearlessness some found almost frightening. By the time he graduated, he had broken several bones. Ford slapped a bumper sticker on his Mustang that read, “In rugby there are no winners, only survivors.” But he also studied Eastern mysticism and philosophy, while at the same time managing to get himself elected president of the Ivy Club.

  After earning a degree in history from Princeton in 1979, Ford decided to go to work for his great-grandfather’s company—the one that made cars, not tires. He wanted to prove himself and was eager to be judged on his own merits, so he showed up for his first day as a product planning analyst with the name William Clay printed on his identification badge. He fooled no one. When 5 P.M. rolled around, Ford looked up from his work and waited for the rest of the employees to leave. He was determined to be the last one out the door. But nobody budged. By 6 P.M., a few of his coworkers were reading magazines. By 7 P.M., one of them decided to order pizza. At 9 P.M., Ford finally pushed back his chair and headed for the door. So did everybody else.

  Bill Ford’s dedication to Ford Motor Company was evidenced by the simple fact that he showed up for work each day. He certainly did not have to. If he had chosen to spend his days sitting on the beach of a small private island, few would have faulted him for it. By the fourth generation, the heirs of most other industrial fortunes had long since devoted themselves to a life of leisure. After putting in a few years at the company, Ford resumed his education, earning his master’s from the Massachusetts Institute of Technology’s Sloan School of Management in 1984. Then it was back to work. Bill was named head of Ford of Switzerland in 1987. The alpine nation was not exactly a major market, but the skiing was excellent. A year later, he and cousin Edsel Ford II were elected to Ford’s board of directors, where they soon locked horns with Petersen. They won their fight for greater responsibility, and Bill was promoted to head of business strategy for the Ford Automotive Group in 1990. Ten years later, Ford won a different sort of battle with his cousin to become the next head of the Ford family.

  Bill Ford was now ready to assume what he and many of his relatives considered his rightful place at the head of Ford Motor Company. However, he bore little resemblance to Detroit’s ideal of an automotive executive. Bill dabbled in Buddhism. He played folk guitar. He also had become an ardent environmentalist. Bill believed in global warming and thought his company’s cars and trucks were contributing to it. The biggest management challenges he had faced involved his father’s football team, and it had one of the worst records in the NFL. Alex Trotman, the wiry Scotsman who had presided over much of the automaker’s recent success, considered Bill and Edsel “rich dilettantes ill equipped to meddle with one of the world’s largest companies, even if their name was on the building.” Trotman seemed to forget that his was not. When the board of directors pushed him to choose Bill Ford as his successor, Trotman resisted. The directors overruled him. Trotman shook his head and left the boardroom, pausing as he passed the young Ford.

  “So now you have your monarchy back, Prince William.”

  But Ford’s rising son would not rule alone.

  While Ford’s board was willing to give Bill Ford a chance, many of the outside directors had their own reservations about his ability to run the company. If nothing else, he was very young—just forty-one when he officially took over on January 1, 1999. Their solution was to divide the office of chairman and CEO into two positions and pair Ford with an experienced chief executive.

  The man they chose was Jacques Nasser, a suave and swaggering Arab who had been born in Lebanon and raised in Australia. He was ten years older than Bill Ford and considered one of the company’s most talented executives.

  The two men could not have been more different. Ford had been born into a world of wealth and power, but had grown into a relatively down-to-earth adult who went out of his way to rub elbows with the common man. Even after becoming chairman, he continued to play hockey on a team that included Ford factory workers. After Princeton, Ford had switched to a particularly brutal variant played outdoors on ponds that added freezing rain and snow to the usual fare of flying pucks and body checks. He tired of stuffy Grosse Pointe and moved his family to a seventeen-acre wooded estate on the Huron River in Ann Arbor, a college town with a slightly bohemian bent about forty-five minutes west of Ford World Headquarters. On weekdays, Bill Ford drove himself to work—in either a new Mustang or an F-150 pickup. On weekends, he Rollerbladed to the local Starbucks. And he remained an outspoken environmentalist, even though his company had become a lightning rod for green anger. Ford’s office was decorated with hemp wall covering and undyed cotton curtains woven on a solar-powered loom.

  As a poor, dark-skinned immigrant boy in rough-and-t
umble Australia, Nasser had grown up battling bullies and scrounging for cash. As an adult, he worked like a man possessed to distance himself from that past, surrounding himself with the trappings of power and wealth. He preferred to travel in limousines, worked seven days a week in an office decorated with polished steel and black leather, and even had his desk placed on a raised dais to compensate for his short stature. After earning a degree in international business from the Royal Melbourne Institute of Technology, Nasser had joined Ford of Australia as an analyst in 1968. Over the next thirty years, he bounced around the world and made his way up Ford’s corporate ladder, ultimately becoming head of all automotive operations in 1996. During his ascent, Nasser developed a reputation as an aggressive cost-cutter, earning the sobriquet “Jac the Knife.” The board saw him as a fiscal disciplinarian who could make hard decisions without flinching, the perfect counterweight to Bill Ford’s youthful idealism.

  It all seemed perfectly logical, except for two problems. First, neither man really wanted to share power with anyone. Second, once Nasser became CEO, his fiscal discipline seemed to vanish overnight. Eager to inscribe his name alongside the greats of American capitalism, Nasser succumbed to the irrational exuberance that was spreading like a pandemic through the business world in the go-go days of 1999. He saw what was going on in places like Silicon Valley and wanted a piece of it. He idolized General Electric’s Jack Welch, who had become the darling of Wall Street by shifting GE’s focus from microwave ovens to financial services, and figured he could do something similar with Ford.

  Soon after being promoted to CEO, Nasser received an internal analysis that showed the majority of Ford’s profits came from a few truck and SUV plants in the United States. That terrified him, particularly since the Japanese had finally figured out how much money there was to be made in those segments and were getting ready to introduce some gas-guzzlers of their own. But rather than figure out how to diversify Ford’s product lineup, he decided to diversify Ford.

  Nasser broke open the piggy bank Ford had filled over the past decade and went on a shopping spree. He bought a chain of car repair shops in Britain and a junkyard company in Florida. He invested in dot-coms and inked deals with Microsoft, Hewlett-Packard, and Yahoo! At the same time, he began unwinding Ford’s core automotive business. Nasser had the Blue Oval removed from World Headquarters and began replacing seasoned executives with young guns from other industries. He spun off Ford’s parts subsidiary, which he renamed Visteon Corporation, and seriously considered getting out of the U.S. car business entirely so that Ford could focus exclusively on the more profitable truck and SUV segments. The only part of the automobile business he thought had potential was the luxury segment. Ford already owned two of the most celebrated brands in the world, Aston Martin and Jaguar. Nasser decided to purchase Land Rover and Volvo, too. He added Ford’s own luxury marque, Lincoln, to the mix and created an international house of brands he called the Premier Automotive Group. He even set up a new headquarters for the division in California to put as much distance between it and Detroit as possible.

  As Nasser tried to pull the company into the new economy, Bill Ford was pulling it out of the Global Climate Coalition, an industry organization dedicated to lobbying against green initiatives and debunking global warming. Environmentalists applauded the move. Ford was just getting started. In May 2000, he published the company’s first “Corporate Citizenship Report,” which featured frank assessments of controversial issues like the impact of tailpipe emissions on the climate and the dangers posed to smaller cars by the automaker’s big SUVs. Greenpeace invited Bill Ford to deliver the keynote at a green business conference in London. Car and Driver editor Brock Yates dismissed the young chairman as “a guilt-ridden rich kid, not a proud tycoon like those who preceded him.”

  But Nasser had the whole tycoon thing covered. He created a new cult of personality around himself, traveling with a large entourage and constantly upstaging lesser executives at public events. He made sweeping proclamations, ordering all cars to be equipped with analog clocks to give them a touch of class and even changing the hue of blue on the Ford badge on a whim. Nasser once called a meeting of his senior leadership team to outline a new marketing plan. When some of his subordinates began to poke holes in it, he raised his hand to silence the debate.

  “This is our new marketing strategy,” he said sharply. “If you don’t agree with it, I’ve got somebody from HR who will work out your retirement.”

  Morale suffered as employees struggled to keep up with the dizzying pace of change at Nasser’s Ford and cope with his abrasive personality. It got even worse when he introduced new performance evaluations that assigned letter grades to salaried employees based on a complex set of criteria that gave little weight to experience and favored younger workers. Ford was soon defending itself against a raft of age discrimination lawsuits. Worse, it began to lose the veteran employees who had always been the backbone of the company. These were the men and women whose skills and institutional memory allowed the automaker to bounce back every time it lost its way. They remembered how Ford dealt with past adversities and knew it could again. Now, thanks to Nasser, they were fleeing in droves.

  Nasser also alienated Ford’s dealers. He came up with a plan to consolidate dealerships in major metropolitan areas into company-controlled superstores. In exchange for giving up their franchises, these dealers would become part owners of these new retail operations. Most felt like Ford was trying force them out of business so it could claim their profits for itself. Some wrote open letters to the company, decrying Nasser’s strategy and vowing to fight in the courts if necessary.

  Ford began to lose sight of the fundamentals. Quality began to suffer. Corners were cut. Launch dates were missed. Vehicle designs began to slip. However, as long as the company was making record profits, few were willing to challenge the pugnacious Nasser.

  But it had all become too much for Bill Ford.

  Like most members of the Ford family, he had intense pride in the company that bore his name. The Fords were keenly aware that theirs was the last great industrial dynasty in the United States. They were the custodians of Old Henry’s vision. Like him, they had genuine concern for the people who depended on the company for their livelihoods. A month after Bill Ford took over as chairman, a massive explosion ripped through the powerhouse at the Rouge, killing seven workers and injuring many more. Ford rushed to the scene before the fires were even out, followed the wounded to area hospitals, and spent hours consoling grieving family members. He spent the next several days attending the funerals. This was what made Ford different from all the other automakers. It was why many workers still said they worked at Ford’s, not Ford.

  The idea of Ford employees suing the company hurt Bill Ford deeply. So did the angry letters he was getting from dealers, many of whom he knew personally. He feared that the rapid-fire changes Nasser was making were beginning to do real damage—not only to the company, but to the Ford name as well. He decided to do something to stop it before it was too late.

  In 2000, Irv Hockaday was nearing the end of his distinguished career as the president and CEO of another family-owned company, Hallmark Cards. The bespectacled, white-haired executive with a thick midwestern accent was elected to the automaker’s board in 1987 and had been mentoring Bill Ford ever since he joined a year later. Now he listened quietly as his young protégé outlined his concerns about Nasser. Hockaday agreed that the flamboyant CEO was moving faster than many of the directors would have liked, but Hockaday had rarely worried about how the company was being run under the buttoned-down leadership of men like Petersen and Trotman. He was not sure he should begin to now.

  “Well, Bill, you know Jac has a world of experience. He’s an aggressive guy. He’s kind of thinking out of the box,” Hockaday said after hearing Ford out. “Relative to his level of experience, you’re still kind of wet behind the ears. I wouldn’t make a big deal out of it now.”

  He suggested t
hat they watch and wait. Reluctantly, Ford agreed.

  Then the wheels came off. Literally.

  In early 2000, the National Highway Traffic Safety Administration began investigating reports of fatal accidents involving Ford Explorers equipped with Firestone tires. The tires were prone to suffering catastrophic failures when driven at high speed in hot weather, causing the vehicle to roll over. That was Ford’s take at least. Japan’s Bridgestone, which had purchased Firestone in 1988, claimed Ford’s SUV was the real culprit. Consumer advocates blamed both companies and also accused them of covering up the problem.

  The U.S. government ordered Firestone to recall 6.5 million tires. In an effort to restore consumer confidence, Ford decided to recall 13 million more at a cost of $2.1 billion. As the number of deaths blamed on the problem climbed past 140, both companies became the targets of major class-action lawsuits. They severed their century-long relationship, at least in the United States, and began tearing each other apart in court. All of this litigation would ultimately cost Ford hundreds of millions of dollars. But it would do far greater damage to its brand image.