But Schulz was confident Ford would take his side. When they were alone on the company jet during a trip to China in late October, he pleaded his case. But Bill Ford told Schulz he would not help him this time; whatever problems he had needed to be worked out with Mulally. Schulz was devastated. The era of cronyism had come to an end at Ford.
A few days after he returned to the United States, Mulally called Schulz into his office to tell him that his position—president of international operations—was being eliminated. It was one more layer of bureaucracy that would not be needed in the new Ford. Mulally wanted the heads of Ford’s Asian and European operations to report to him directly. He asked Schulz if he would consider overseeing global product planning. It was a clear demotion, and Schulz left fuming.
“Maybe it’s for the better,” his wife told him.
Schulz was a third-generation Ford employee, and his grandfather and father had both died of heart attacks on the job—his grandfather at fifty-seven, his father at forty-seven. Schulz was fifty-three and did not want to end up the same way. It was a bitter pill to swallow, but he announced his retirement in December. He turned down the company’s offer of a farewell party.
Schulz had underestimated both Mulally and Bill Ford. He was unable to get past the new CEO’s amiable exterior, to see the relentless leader it concealed. Nor did he seem to grasp that Bill Ford had bet everything on Mulally; he was not about to second-guess him or undermine his authority.
Ford Americas president Mark Fields had gotten over his initial anger at Mulally’s appointment, which had ended, at least for now, his own shot at the top job. He seemed to be getting with the new program. But Fields went out of his way to make it clear to Mulally that he was in charge of the Americas group and did not need any help running it. Mulally was impressed with Fields’ work on the Way Forward acceleration plan, as well as by the courage he had shown in telling the truth in the BPR review about the troubled Edge launch. But Mulally also knew that a big part of why he had been hired to run Ford was that Fields had proven he could not do it alone.
Turf was not the only thing Fields was trying to protect. He was also fighting to keep his jet privileges. Fields’ weekly commute from Florida was being held up as a symbol of Ford’s hypocrisy as it demanded more and deeper sacrifices from its employees to cope with its mounting losses. Many already viewed Fields as arrogant and aloof; his use of the company plane only reinforced that—particularly when he called for “sacrifices at every level.”
On a warm Saturday morning in November, Fields went out to grab a cup of coffee and a newspaper. He was ambling back to his Volvo, enjoying the Florida heat, when Detroit’s version of a 60 Minutes hit squad—WXYZ investigative reporter Steve Wilson—jumped out of the palm trees and thrust a microphone into Fields’ face, demanding to know how the Ford executive had made the trip from Dearborn to Delray Beach.
“Listen, it’s Saturday morning,” Fields said wearily. “I’m here with my family.”
“Yeah, but you’re down here on the Gulfstream!” Wilson snarled at him. “You’re spending what? How much is that every weekend?”
According to Wilson, each of Fields’ weekly round-trips was costing the company approximately $50,000. Ford would later put the figure at $30,000. Either way, it added up to a sizable chunk of change for a company that was slashing thousands of jobs.
Mulally ordered Fields to stop using the Ford jet. It was a bit hypocritical, given that Mulally himself was commuting back and forth between Dearborn and Seattle on Ford’s friendly skies. But Mulally was not the one being ambushed by reporters. Fields’ use of the plane had become an embarrassment to the company. Even the Wall Street Journal, which did not usually traffic in such sensationalism, had picked up the story.
Fields tried to hold his ground. Use of the jet was in his contract, which was a legal document that could not be abrogated, except by mutual consent. He threatened to quit if Ford breached it. But Mulally was not about to let Fields go on generating negative publicity for the company. Laymon was asked to deal with the situation. He challenged Fields to make good on his threat.
“If you truly have alternatives, exercise them,” he dared Fields.
In the end, Fields reached a compromise with the company. Ford agreed to up his annual cash compensation and Fields agreed to fly commercial.*
Outsiders saw Mark Schulz’s “retirement” as a sign that the bloodletting at Ford had finally begun. In fact, Mulally was remaining true to his word. Instead of figuring out whom to get rid of, he was trying to figure out where each of Ford’s executives could make the biggest contribution to the company’s turnaround effort. He was focused on filling in the blanks on his matrix organization chart.
Mulally tried to come up with two or three candidates for each position. He was prepared to look outside Ford if necessary, but he wanted people with deep knowledge of the company and its problems. Mulally looked at who was currently in charge of each function and then tried to identify the best people beneath him or her. That way, if his first choice did not work out, he would be able to quickly fill the position with other in-house talent. Mulally moved cautiously. He scheduled one-on-one interviews with executives, talking to them about what they had done at Ford, what they were doing now, and where they thought they could help. He looked not only at their qualifications and technical expertise but also at whether they worked well with others. Mulally also needed to know that they had the stomach for the heavy lifting that lay ahead. Most important, they needed to be able to function in the midst of crisis.
Some of the choices, like Michael Bannister and Mark Fields, were obvious. Mulally decided to give the current heads of Ford’s European and Asian divisions a chance to prove themselves as well. With Schulz gone, the company’s Asia-Pacific and European operations were reconstituted as separate business units, coequal with Fields’ Americas group.
Asia-Pacific, which was also responsible for Ford’s operations in Africa, was led by John Parker—a short, soft-spoken South African who had been with the company since the 1960s. An engineer by training, Parker had been Ford’s chief technical officer in Taiwan, head of product development in Australia, president of Ford India, and Dearborn’s senior representative at Mazda before taking over the entire region just before Mulally arrived. He had good connections throughout Asia, which was vital to doing business in that region. But Mulally made it clear that he was not impressed with Ford’s performance there, particularly in the critical Chinese market. He expected Parker to turn things around, and fast.
Lewis Booth was the head of Ford of Europe and the Premier Automotive Group, which were now united in the European group. He was a tough but unassuming Liverpudlian who started his career in the automobile industry as an engineer for British Leyland. Booth also trained as an accountant and had joined Ford in 1978 as a financial analyst for Ford of Europe’s product development division. His rise through the ranks was far from meteoric. Booth was short and frumpy and therefore at a significant disadvantage in Jacques Nasser’s Ford, where good looks and urbane style were often valued more than leadership skills. He had spent the past several years following in Fields’ wake, succeeding him first as president of Mazda, then as the head of Ford of Europe and the Premier Automotive Group. But Booth was smart, had a good sense of humor, and cared about his employees. This made him an effective leader who was regarded by many as one of the company’s hidden gems.
Because he had reported to Schulz, Booth did not have an opportunity to meet Mulally until a few weeks after he joined the company. When he did, Booth was wary. He could tell there was more to the man than his boyish grin and cheerful demeanor suggested. He thought many of his colleagues had been unwise in their early appraisals and he did not want to make the same mistake. It quickly became clear to Booth that Mulally was a man who sincerely wanted to change Ford for the better. Booth was prepared to follow anybody who made that his mission. He hated working for Schulz, whom he found far too easygoing. Booth
was a better manager who had more experience running large organizations, and he knew it. But he was not a personal friend of Bill Ford. Booth had continued the European restructuring that Fields had begun, and Ford’s operations there were becoming stronger by the month. Its products were the envy of the rest of the company. Mulally told Booth to keep doing whatever it was he was doing and share as much as he could with the rest of the leadership team.
With the business units in place, Mulally turned to the functional teams, starting with finance. Mulally had decided to keep Don Leclair around as long as possible. His department already operated globally, but its authority was somewhat limited outside the Americas. That was changing as the walls that divided the company were knocked down.
Joe Laymon would also be staying on as vice president in charge of human resources and labor affairs, at least for now. Though Laymon had proven a valuable ally, Mulally was beginning to see him more as part of the problem than the solution. His real value lay in his ability to do Bill Ford’s dirty work. But even Ford had begun to suspect that Laymon started as many fires as he put out. He had done more than his share of fighting in Ford’s internal turf wars, and he was a ruthless adversary who was not above leaking damaging information about other executives to the press. Like Leclair, he was never going to be a team player. That worried Mulally. But Laymon was a good friend of United Auto Workers president Ron Gettelfinger, and Mulally needed him until the critical 2007 contract negotiations were concluded.
Charlie Holleran was a more immediate concern. Though Mulally was impressed with how Ford’s vice president of communications handled his hiring, he did not like Holleran’s style. Holleran was an old-school public relations manager whose expertise lay in crisis management. If someone lobbed a grenade into the room, he was the guy who would grab it and pitch it back out the window before it went off. But Mulally did not need a crisis manager; he hoped the days that demanded one were over. As with the other functions, Mulally wanted someone who could come up with a plan—in this case, one for improving the public perception of Ford Motor Company—and then rigorously monitor its execution. Holleran ran things by instinct and intuition; he was not one for PowerPoint presentations and media metrics. He would keep his job for the time being, but Mulally had his eye out for a replacement.
Mulally was generally satisfied with the rest of the team that he inherited.
Legal affairs was led by General Counsel David Leitch, a beefy, battle-scarred Beltway veteran with a sharp legal mind. He was a graduate of the University of Virginia School of Law and had clerked for U.S. Supreme Court chief justice William Rehnquist. On September 11, 2001, he was a few months into his new job as chief counsel for the Federal Aviation Administration. He spent the next year exploring uncharted legal waters as the United States locked down commercial air travel. Then he was tapped to be deputy assistant to President George W. Bush and deputy White House counsel, just in time for the invasion of Iraq. Leitch loved being in the White House, even though his work there took him into some unsettling legal areas, such as the debate over “enhanced interrogation techniques.” But he knew going in that his position there was not permanent. When Leitch had the opportunity to come to Ford, he took it. He had only been at the Glass House since 2005. Mulally liked him instantly—in part because he was another outsider who was still untainted by Dearborn, in part because he was a good attorney. Mulally would rely on Leitch’s counsel a great deal in the months and years ahead.
Ziad Ojakli, Ford’s vice president of corporate affairs, was another veteran of the Bush administration. A fast-talking, well-connected Turkish American lobbyist with a knack for political deal making, Ojakli had been deputy assistant to the president for legislative affairs and Bush’s chief liaison to the Senate from 2001 to 2004. Bush, who liked to bestow nicknames on his closest advisers, dubbed him “Z-man.” Others in Washington referred to him as “the Energizer Bunny,” because of his frenetic pace. The smiling, pudgy-faced Ojakli grew up in Brooklyn’s Bay Ridge neighborhood and earned a bachelor’s from Georgetown and a master’s from Johns Hopkins. His unique blend of street smarts, elite education, and stamina made him a real force on Capitol Hill, where he worked behind the scenes to build support for the president’s agenda. He got along with Democrats and Republicans alike, and his connections in Washington ensured that Ford’s concerns always got a hearing.
Chief Information Officer Nick Smither was a tall, thin Brit who said little but kept Ford’s computers running. He would now report directly to Mulally. So would Chief Technical Officer Richard Parry-Jones, a Welsh engineering savant who was considered one of the best vehicle tuners in the industry. Mulally had forgiven Parry-Jones for doubting his ability to grasp the complexities of the automobile business during their first meeting in September.
Mulally thought he had a chief marketing officer in the person of Hans-Olov Olsson, who was also chairman of Volvo. But the sixty-four-year-old Swede announced his retirement on November 30. He had grand plans for a massive marketing campaign that would embrace all of Ford’s disparate brands, and it did not take Olsson long to realize that was wholly incompatible with Mulally’s new vision for the company. Besides, he missed Sweden. So Booth added the title of Volvo chairman to his growing list of responsibilities, and Mulally began searching for someone else to fill the critical post of marketing chief.
Marketing would be key to Mulally’s transformation of Ford, and he quickly concluded that no one inside the company was capable of leading the major push he had planned. He would need to hire another outsider. Mulally tapped Lisa Bacus, the brand manager for the Lincoln Mercury division, to fill in as the senior marketing executive until he could find the right person.*
Some functions at Ford were already led by people whose titles implied a global purview. In practice, however, few were able to exercise real, direct authority worldwide. Mulally wanted to make sure that they owned all the processes, all the people, and all the responsibility.
Vice President of Global Quality Bennie Fowler was a good example. A stern, African American manufacturing expert from Georgia who looked like a former linebacker, Fowler learned the value of order and structure from his father, an army sergeant, who ran his house with the same discipline that he ran his platoon. As a boy, the other kids in the Augusta housing project Fowler grew up in called him “Streetlights,” because his parents required him to return home at dusk. As an adult, he applied that same disciplined approach to manufacturing and was known to mete out wire-brushings to subordinates who failed to live up to his high standards. Quality was a religion for Fowler, and he approached his job with the intensity of a Baptist preacher. He was the sort of guy who could change the way a plant operated by force of will alone. He came to Ford after stints at General Motors and Chrysler, starting as superintendent of Ford’s assembly plant in St. Thomas, Ontario. Fowler went on to rattle the teacups of tweed-coated Brits as chief operating officer for Jaguar and Land Rover before the progress he made on their abysmal quality ratings prompted Jim Padilla to call him back to Dearborn in the summer of 2005. He was given responsibility for manufacturing engineering and new product launches on Mark Fields’ Way Forward restructuring team.† After a particularly rocky board meeting led to the demotion of the previous quality chief, Fowler added vice president of global quality to his title in April 2006.
Fowler made the mistake of taking his new title seriously. He started by calling a meeting of all the Ford quality chiefs from around the world and asked each one to explain the processes in place in their regions. Every part of the company was handling quality differently. That upset Fowler, because he knew Ford had invested a great deal of time and resources in developing what he thought was one of the best quality control systems in the industry—a system that nobody besides him seemed to be following. When he suggested they start, Fowler’s subordinates responded with a chorus of impossibles. Every region found some part of the system it could not implement. Fowler quickly discovered that he lac
ked the necessary backing to force the issue, so he focused on fixing North America. He had made real progress there by the time Mulally was hired. But Fowler was certain he was going to lose his job. He knew that he was considered one of Padilla’s protégés and assumed that was reason enough for Mulally to get rid of him. He was surprised then when he first encountered the new CEO walking down the hall in November.*
“Hey!” Mulally giggled. “I’m your new quality guy!”
The two men spent the next fifteen minutes talking. Mulally assured him that his position was secure.
“We’re going to focus on quality and productivity at the company,” he told Fowler. “We’re going to make it a priority. You’re the guy!”
Then Mulally looked at his watch and arched his eyebrows.
“I’ve got to run!” he said. “I’ve got to get a home-improvement loan.”
A few weeks later Fowler got a call from Mulally, who told the quality chief that he would now be reporting directly to him. Mulally also told Fowler that he wanted him to start taking the “global” part of his title seriously.
Fowler, too, was overwhelmed by his first Thursday BPR meeting. There was just so much information to absorb. He was also daunted by the task of getting his own data together for his part of the presentation. Initially he did not have the quality metrics for the other regions and could only present the numbers for North America. Once he started getting reports from other parts of the world, Fowler discovered that each region measured quality a bit differently and presented its data in different formats. It took about eighteen months before Fowler was able to present a comprehensive snapshot of Ford’s quality efforts worldwide. It took several of the other functions just as long to get up to speed—evidence of just how disjointed the company had been before Mulally. Presenting the data in the five minutes that he was allotted each week was a challenge, too. Fowler practiced before each meeting like an actor rehearsing his role. As tough as he was, Fowler was a little intimidated by suddenly finding himself on equal footing with men who had been his bosses until a few months ago. Mulally spent some time with him alone after each of his first few meetings.
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