At 2:20 P.M., Laymon finally pulled into the garage beneath World Headquarters like a smuggler, his eyes darting down the rows of washed and waxed Jaguars and Land Rovers that were the preferred rides of Ford’s executives to make sure none of them was around. Mulally noted the lack of Fords and Lincolns.
Bill Ford was waiting when they pulled up to the entranceway. He was a little surprised to see his new CEO emerge from the Land Rover wearing a blue blazer, olive slacks, a blue button-down shirt, and a yellow tie. This was Dearborn, Michigan, not Silicon Valley. Men still wore suits to work here, as Ford’s own bespoke gray one ably demonstrated. But Mulally was about to establish a new normal. He was wearing what would soon be recognized as his customary uniform. In the days to come he might mix it up a bit with a white shirt and red tie—maybe even gray trousers—but Mulally would not put on a suit, even when he visited the White House.
Waiting next to Bill Ford was Karen Hampton, a young communications executive who would become Mulally’s media handler and minder. She slapped a Blue Oval pin on his lapel and led the two men upstairs for a photo shoot in the company lobby. Once again Mulally was overcome by a sense of history and felt a lump in his throat as he surveyed the Model Ts, Mustangs, and other vintage Fords that filled the marbled main floor. He smiled at a portrait of Henry Ford. Curious employees walked by wondering who the grinning guy was posing with Bill Ford. Holleran knew it was a risk for them to be seen together before the news was announced, but he needed to get pictures for the press packets his team was putting together upstairs. Mulally, however, had little tolerance for secrets. He wanted to shake hands with everybody who walked by, introduce himself, and ask them what they thought he should do to fix the company.
When they were done, the group hurried into the executive elevator and rode it to the twelfth floor. Mulally followed Ford to his office, which occupied the southeast corner. He pointed to Mulally’s own office just a few steps away in the northeast corner. The two suites were separated only by a waiting room.
“I’ll be right here when you need me,” Ford promised.
The company’s senior executives were crammed into Bill Ford’s private conference room. The overseas chiefs were listening in on speakerphone. At 3:30 P.M., Ford and Mulally walked in and the room fell silent. Ford explained that he was resigning as CEO and introduced Mulally as Ford’s new chief executive. As he talked, all eyes were on the Boeing executive. Mulally did his best to smile back, despite the growing intensity of their stares. He had never felt so scrutinized. Mulally thought about shouting, “Boo!” and then telling the serious-looking executives, “Don’t worry—it’s going to be okay.” But he restrained himself.
Fields eyed Mulally’s outfit.
He’s here to meet the press and he’s wearing a sport coat, the dapper executive thought acidly. Well, this is sure going to be different. Fields’ first impression of Mulally was that he was a bit corny. And he was not the only one who felt that way. Mulally’s farm-boy demeanor surprised many in the room.
He doesn’t look like he’ll be a hammer, thought Ford Credit CEO Mike Bannister. He had gotten the news that morning and Googled Mulally before heading over to Bill Ford’s conference room. Bannister was hoping for somebody with a bit more gravitas. He was fed up with the infighting in Dearborn and thinking about quitting. He liked Mulally but wondered if he was tough enough to do what needed to be done.
Mulally seemed more like a politician to Mark Schulz, who was put off by his backslapping and arm squeezing.
“Why did you leave Boeing?” he asked.
“This is an opportunity for me to help another American and global icon,” Mulally replied.
At least one person rolled his eyes.
It was not a warm reception. Ford’s senior executives were products of a cutthroat corporate culture. Like courtiers of old, they were accustomed to smiling at the new king even as they plotted his demise. Mulally was an outsider whose very presence testified to the fact that Bill Ford had lost all confidence in his management team. It did not take long for someone to note that Mulally knew nothing about the automobile industry.
“We appreciate you coming here from a company like Boeing, but you’ve got to realize that this a very, very capital-intensive business with long product development lead times,” quipped Ford’s chief technical officer, Richard Parry-Jones. “The average car is made up of thousands of different parts, and they all have to work together flawlessly.”
“That’s really interesting,” Mulally replied with a smile. “The typical passenger jet has four million parts, and if just one of them fails, the whole thing can fall out of the sky. So I feel pretty comfortable with this.”
That shut them up, but Mulally got the message.
They don’t believe I can do this, he realized. I need to convince them that I get this.
Ford’s executives were not the only ones who needed convincing. As Mulally met with his new leadership team upstairs, Holleran was meeting with his own team a few floors below in the communications department.
On the previous Wednesday, Holleran had summoned three of his top managers—Hampton, Jon Pepper, and Oscar Suris, a former Wall Street Journal reporter who was in charge of corporate media relations—to his office to let them know what was about to happen. They spent the rest of the week putting together the press releases and internal memos announcing Bill Ford’s decision.
Over the weekend, Holleran and Laymon flew out to Seattle to prepare Mulally for the announcement. First they played a round of golf. Mulally was an avid golfer. So was Laymon. But the HR chief was also a student of human nature, and he spent most of his time on the course watching Ford’s new CEO closely. He noticed that Mulally learned from his mistakes, adjusting his swing whenever he hit a less-than-perfect shot. Mulally was also friendly with the beverage cart vendor—not at all condescending or aloof. And when someone hit a particularly bad shot and got frustrated, Mulally slapped him on the back and said, “Well, look how far down the right side you are.”
We got lucky, Laymon thought. This guy is the real deal.
After eighteen holes, the group sat down to discuss the upcoming announcement. Mulally told Holleran that he had come up with a plan for dealing with the media.
“We already have one,” Holleran said, sliding a thick binder across the table. Mulally opened it.
“Holy shit!” Mulally said as he thumbed through the pages, which contained not only the answers to every question he was likely to be asked but also detailed plans for staging the event. It covered everything, right down to where the press photographers would be corralled to control the composition of their shots.*
“Every picture that’s taken is going to include you and Bill, because we don’t want a palace coup as the story,” he explained.
“Is all this necessary?” Mulally asked.
“This isn’t Seattle. It isn’t even Detroit. It’s the world. This is the Ford Motor Company, and every burp is news,” Holleran told him. “There’s a reason that the Wall Street Journal, the New York Times, and all the wire services have offices in a decaying city. This is the linchpin of the economy, and you’re going on center stage.”
Holleran’s team had been setting that stage for days. They drafted memos for Bill Ford to send out to employees bemoaning the lack of honesty at the top of the company and calling for fundamental changes in the way the corporation was run. Then they leaked these to the press. The idea was to paint a portrait of Bill Ford as a man looking for a lever with which to pry his company out of the rut it had been stuck in for too long. That way, the hiring of a new CEO would be seen as something Bill Ford did, rather than something that was done to him.
Ford’s PR team knew that reporters would be looking for quotes from outside sources come Tuesday, and they wanted to make sure those were positive, too. That weekend, they had Bill Ford call David Cole, the chairman of the Center for Automotive Research in Ann Arbor and the most quoted industry pundit in America. Hollera
n knew that Cole would be the first person most reporters called for a reaction once they heard the news.
“We’re going to bring in a new CEO,” Ford told Cole. “I’m really enthusiastic about this guy, because he’s done it before. He’s coming from Boeing. His name is Alan Mulally. You’ll like him.”
Unlike most people in Detroit, Cole knew all about Mulally. Cole was a Boeing shareholder and had followed his efforts to keep the company flying. Cole also knew that the aerospace business was at least as complex as the automobile business. Mulally called Cole himself a few minutes before Tuesday’s press conference and worked his own magic. When the reporters started calling a few minutes later, Cole had nothing but good things to say about Ford’s new CEO.
Holleran and Pepper even figured out a way to bend the nation’s most influential financial organ to their will. The Wall Street Journal’s top investigative reporter, Monica Langley, was already working on a piece about the automaker. They were worried it was going to be an indictment of Bill Ford’s leadership but had agreed to cooperate with her because they knew she was talking to board members and would end up with a story either way. Her piece was slated to run a few days after Mulally’s hiring was announced. They decided to call her and offer her the scoop. If she had it, the only thing her story could be about was Alan Mulally. Langley might hurl a few barbs at Bill Ford in the process, but she would also have to give him credit for having the courage to step aside. But they needed Bill Ford’s approval to let her in on the secret, and Ford was nervous about letting anyone in the press know ahead of time.
“Bill, it’s the best way to get this story told,” Holleran told his boss. “The Journal will set the tone for the rest of the national coverage.”
In the end, Ford agreed. At eight o’clock Tuesday morning, Langley received a call from Pepper. He told her that Ford was about to make an important announcement and offered to fill her in if she agreed not to release the story until the press release went out on the wire. She was reluctant, but Pepper told her she would have hours to work on her story before the rest of the media even knew about it. Langley agreed. Like David Cole, she received a call from Mulally Tuesday afternoon.
The press release went out as soon as the markets closed, just after 4 P.M., as did an e-mail from Bill Ford to his employees around the world. In both, Bill Ford described the challenges facing the company and the reasons for his decision to step aside.
“While I knew that we were fortunate to have outstanding leaders driving our operations around the world, I also determined that our turnaround effort required the additional skills of an executive who has led a major manufacturing enterprise through such challenges before,” he wrote in his message to employees. “After dealing with the troubles at Boeing in the post-9/11 world, Alan knows what it’s like to have your back to the wall—and fight your way out with a well-conceived plan and great execution. He also knows how to deal with long product cycles, changing fuel prices and difficult decisions in a turnaround.”
Ford stressed that his own commitment to the company remained unchanged.
“Let me assure you: I’m not going anywhere,” Ford continued. “As executive chairman, I intend to remain extremely active in the direction of this company. I’ll be here every day and I will not rest until a prosperous future for this company is secured.”
Throughout Dearborn and around the world, Ford offices fell silent as employees read the message. Murmurs ran down the assembly lines in factories on six continents.
Meanwhile, dozens of reporters and photographers rushed to Ford World Headquarters for the 5 P.M. press conference. Inside the media center, cameras clicked and flashes popped as Ford and Mulally fielded questions beneath a big Blue Oval. Most of the reporters wanted to know just who was in charge in the Glass House now.
“This is a partnership,” Ford said. “Alan is going to be CEO, and I’m going to be executive chairman, and we’re going to be working closely on all of these issues.”
Mulally was also asked if his experience in the aerospace business was transferable to Detroit.
“The fundamentals between these two industries are exactly the same,” Mulally insisted, holding both companies up as icons of American manufacturing. “Some people think the United States can’t compete in the design and production of sophisticated products. I personally think we can.”
He said he had demonstrated that at Boeing, and he promised to do the same at Ford.
Then someone asked Mulally what type of car he drove.
“A Lexus,” he said without even a hint of embarrassment. “It’s the finest car in the world.”
“That’s being keyed now as we’re sitting here,” Ford quipped, referring to the practice of scratching a vehicle’s paint with a car key.
The always-personable Bill Ford had a way of turning press conferences into laugh-fests, a rare quality in a town where most executives took themselves far too seriously. This one was no exception. When a reporter observed that Mulally was sixty-one and noted that most Ford executives retired by sixty-five, Ford threw out another zinger.
“Doesn’t he look great for sixty-one?” he said. “This place will change that.”
The next morning, Ford and Mulally addressed employees in a town hall meeting at World Headquarters that was broadcast to the company’s facilities around the world. As Ford mounted the stage, he received a standing ovation from the workers in the auditorium. Mulally did, too, but there was less enthusiasm in their applause.
Both men reiterated what they had said the day before. Bill Ford talked about the need to have someone at the top who had “been through the wars, and has the scars to show for it and came out victorious.” Mulally said he was honored to be asked to lead such a storied company. Then they opened the floor to questions.
The first came from a woman who nervously asked about the epic downsizing Mulally had presided over at Boeing. She was not alone in her concern; many in the company were worried that what Ford had hired was not so much a CEO as a hatchet man. Mulally did his best to reassure her, explaining that the cuts he had made at Boeing were the direct result of the 2001 terrorist attacks, which had forced the aircraft manufacturer to slash production by more than 50 percent.
“We had to take dramatic action just to survive as a company,” Mulally told her. What he did not say was that Ford would have to as well.
Another employee asked for the specifics of his turnaround plan. That was still a work in progress, Mulally said, but he thought the company’s recent restructuring moves were a good start.
“Matching the capacity to the demand right now is just critical,” he said, adding that improving quality and productivity while continuing to invest in new products would also be essential. “I’m building on what you’ve done to get us to this place.”
Mulally was asked if he was going to bring in his own team of executives.
“My team is right here,” he said with a smile.
The senior executives sitting in the front row smiled back, though few of them believed Mulally meant it. If the past was any guide, many of them would soon be looking for jobs. But Ford’s recent past was nothing to Mulally but a cautionary tale. It was a new day in Dearborn, as Mulally made clear when one executive, Linda Dunbar, asked if her strategic planning group would play a bigger role in his regime.
Mulally shook his head.
“You don’t want somebody on the side doing the strategy,” he said, nodding toward the front row. “It’s us. That’s the number-one thing. It’s not going to be a strategy department. It’s going to be our team. It’s going to be the leadership team that decides where we are going.”
Dunbar’s group would be dissolved a few months later.
A Jaguar–Land Rover employee called in from Britain to ask Mulally what he intended to do with Ford’s European brands. The man could not help but notice that Boeing had only the one brand. Mulally said he was looking forward to having a discussion about Ford’s brand lineup
. That did not exactly reassure the folks in England.
An engineer in Dearborn asked Bill Ford if his family was prepared to give Mulally a free hand.
“I wouldn’t have been able to attract someone of Alan’s caliber if his hands were tied,” he replied. “Alan’s the CEO. He’s going to make the changes that he feels he should make and wants to make, and I’ll support him.”
Ford made it clear that his decision to bring in an outside CEO meant the end of business as usual at the company.
“Everybody here has not always been on the same page, and we have not had alignment always throughout the organization. It’s frustrated me enormously,” he said. “That’s been an inhibitor in the past, and it’s time for it to change.”
The executives at Ford tried to learn everything they could about their new CEO.
Fields started calling friends who knew Mulally, or at least knew of him. Everybody told him the same thing: He was an excellent leader who believed strongly in teamwork, execution, data, and delivering on commitments. One of them sent Fields a video—a clip from the PBS documentary that showed Mulally’s team stress-testing the wing for the Boeing 777. When it passed, a jubilant Mulally hugged all of his coworkers. He looked like he might kiss a couple of them. The scene raised the eyebrows of the tough, Jersey-born product of Detroit’s macho car culture.
I was right, Fields thought. This is definitely going to be different.
Other executives did their own research. E-mails from Boeing executives describing Mulally’s management style made the rounds. Some Ford executives found out that Mulally had written the introduction to a book on teamwork called Working Together and ordered copies. More than a few updated their résumés and waited for the guillotine blade to fall. No one was willing to acknowledge that he had been part of the problem. But most feared they would be found guilty by association and sent packing with the rest of the old guard.
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