American Icon

by Bryce G. Hoffman

  “Look, Bennie, you’re at this level now,” he said. “Just watch the team and observe. I’ll give you a little time to do that, and I know you’ll figure it out.”

  Like the other executives, Fowler worried at first that Mulally’s talk about honesty and transparency was just a trap, and he waited to see who would be gullible enough to fall for it first. He made sure all of his charts were solid green, even though he knew many of the boxes should have been red. But when Fields survived his first brush with the truth, Fowler decided to show his true colors, too.

  Fields may have emerged from that meeting with head still attached, but he was still worried about his job. Rumors of his imminent departure were everywhere. In addition to the jet scandal, many outside the company continued to view Bill Ford’s decision to bring in Mulally as an indictment of Fields’ own abilities. One Dow Jones reporter even tried to start a pool, inviting other journalists to place bets on how much longer Fields would last.* Fields was a tough Jersey boy who prided himself on his ability to shake off just about anything, but this speculation started to get under even his thick skin. When Daniel Howes of the Detroit News called Fields and flat out asked him if his days were numbered, he decided to find out. Fields hung up the phone and walked down the hall to Mulally’s office, brushed past his secretary, and stood before Mulally’s desk.

  “Everybody around here seems to think you’re planning on canning me,” Fields told him. “Is that true?”

  “No!” Mulally said with evident dismay. “Mark, you’re a valued member of the team.”

  “Can we just have an agreement?” Fields asked. “If you don’t think I’m working out for you, let’s just have that discussion. I’m okay with that.”

  “Sure,” Mulally said. “But you shouldn’t let yourself get distracted by rumors.”

  Fields said it was hard not to when the city’s leading columnist was getting ready to write his obituary. A few minutes later, Howes’ cellphone rang.

  “Hi, Daniel. This is Alan. I heard you were writing something about Mark.”

  “I am,” said the surprised columnist.

  “Well, I just want you to know that I think he is a really, really fine leader,” Mulally said. “I have the utmost confidence in him.… He’s done a great job. And I really believe in him.”

  Mulally meant it, too. He saw plenty of potential in Fields. Mulally had adopted his accelerated restructuring plan and had been deeply impressed by Fields’ courage in the Thunderbird Room. Yet he needed Fields to do more than just pay lip service to the new order. He needed him to embrace it. And Fields was starting to do just that. He did not swagger quite so much when he walked, and he had toned down his tough-talking rhetoric. He started to refer to “the team” and “we” instead of “I” and “me.” Fields was starting to worry less about scoring points and more about how to fix what was wrong with the North American business. He was beginning to see that Bill Ford had been right—that Alan Mulally was the guy who could teach him to be a world-class CEO. Fields was not only learning everything he could from Mulally; he was also becoming one of his most valued lieutenants.

  Fields was not the only one worrying about being replaced. As Mulally worked on his new organization chart, Ford’s top executives watched their doors warily and cringed a little each time the phone rang. They knew it was a rare outside CEO who does not bring in at least a few of his or her own people. With each new appointment to Mulally’s senior team, they relaxed a bit. Then came news that seemed to confirm their worst fears. In November, Jerry Calhoun—Mulally’s head of human resources at Boeing—announced his retirement from the aircraft company. Word leaked that he was coming to Dearborn as a consultant. Many assumed that Laymon’s career at Ford would soon be coming to an end. In fact, it was Laymon who had suggested to Mulally that he hire Calhoun. He reckoned that no one knew the new CEO’s management style better and thought he could help him figure it out. When it became clear that Laymon was not going anywhere—at least not yet—the other executives finally began to calm down.

  That was what Mulally had been hoping for all along. He knew that there had been too much churn at the top of Ford for too long. He needed everyone to settle down and get to work polishing the Blue Oval—not their résumés. His confidence that those who could not be part of the solution would vote themselves off the team had been borne out by the departures of Anne Stevens and Mark Schulz. He just needed to finish finding the right people to round out his roster.

  Most of the positions on Mulally’s matrix already existed at Ford, but there was one key position that did not: head of global product development.* Mulally and Bill Ford had agreed during their first meeting in Ann Arbor that weaving the automaker’s disparate design and engineering operations together into a single, global team would be central to the success of any restructuring. Now Mulally needed to find someone to lead that effort. He also wanted one person to have ultimate authority—and accountability—for every vehicle program around the world.

  One name that kept coming up was Derrick Kuzak’s. If Leclair was quiet, the mild-mannered Kuzak was almost mute. A tall, slouch-shouldered man with a neatly clipped mustache, the engineer usually hung out in the back of the room. He rarely spoke, and when he did, his words came out in a slow whisper—and only after a long hesitation. But what he said would fundamentally change the way Ford built its cars and trucks.

  Kuzak was a native Detroiter who was in charge of product development for North America. Before being recalled to Dearborn to join the North American restructuring team in August 2005, he had been the head of vehicle development for Ford of Europe, where he was credited with leading the region’s product renaissance. He had also led the development of the second-generation Ford Focus compact—a completely different vehicle than the cheap econobox the company sold under the same name in the United States.

  When it was unveiled at the Paris Motor Show in 2004, the European Focus wowed critics and won wide acclaim as one of the best small cars in the world. For Kuzak, it was also a glimpse of what could be accomplished if Ford could manage to unite its balkanized global design and engineering operations. The car had been developed in conjunction with Ford’s Japanese and Swedish subsidiaries, Mazda and Volvo. That collaboration also yielded the Mazda3 and Volvo S40, both of which were receiving their own rave reviews. Kuzak knew that none of these brands could have created any of these vehicles on their own, but together they had created all three for a fraction of what it would have cost to do so independently. Kuzak could not stop thinking about what Ford could gain by taking the same approach worldwide. In theory, the company had already tried this once with Ford 2000, though most of the product development functions had remained regionally divided. There was one exception: electrical systems.* And Kuzak had been in charge of it. There, too, he saw how Ford could save time and money by globalizing the design and engineering of its cars and trucks. He had lobbied for that in his own quiet way ever since, but nobody seemed to be listening.†

  Until now.

  Mulally called Kuzak at home one Sunday. He told Kuzak he had heard about some of his ideas. He asked the engineer to come to his office the next day to talk about them. The two men clicked instantly. They were both engineers, after all. In fact, Kuzak had started in the aerospace industry, while Mulally had once been Boeing’s head of product development. They literally spoke the same language. And as Kuzak described his experience during Ford 2000 and his insights from the European Focus program, Mulally liked what he was hearing.

  “I think the most important asset we have as a company is the Ford brand,” Kuzak told Mulally. “We should devote our resources to that brand globally.”

  Mulally said he was of the same mind. But he said he had one big concern: Kuzak and his North American product development team did not seem to be aiming high enough. Instead of setting their sights on making Ford’s cars and trucks the best, they were simply trying to match the competition. Mulally wanted to know why they were not a
iming to make each vehicle the best in its class.

  “We never committed to that as a company,” Kuzak said calmly.

  Mulally nodded. He also wanted to know why Ford was not keeping up with the rest of the industry in terms of new product introductions.

  “Because it wasn’t part of the plan,” Kuzak said. “We never had a leader who believed in this.”

  “Well, I do,” Mulally said. “The biggest opportunity we have as a company is to integrate Ford globally. It starts with product. That’s what’s going to make us a success—making the best products in the world.”

  To do that, Ford’s cars and trucks had to be the highest quality, safest, and most fuel-efficient vehicles on the road. Kuzak agreed but told Mulally that not everyone at Ford felt the same way.

  “Don’t worry,” Mulally told him. “I’m not just going to let you do it, I’m going to back you up. I’m going to support you, and I’m going to make sure the whole organization gets behind this. I’m right here for you, Derrick.”

  The two men shook hands and walked to the door. When they got to the hallway, Mulally stopped and patted Kuzak on the back.

  “Remember,” Mulally said, smiling, “engineers are the source of all wealth creation.”

  Kuzak left the CEO’s office feeling more inspired than he had in a very long time.

  Kuzak was the perfect choice to spearhead the globalization of product development—and not just because of his obvious engineering talent. He was also the only senior executive at Ford with little ego and no desire to rule. Kuzak was not running for anything, and everybody knew it. That meant none of the business unit chiefs saw him as a threat to their own ambitions. Nor was he seen as a partisan figure who would put the interests of one over another. They might not like giving up some of their authority over product programs, but as long as Kuzak was the one demanding it they were not going to view it as a personal attack.

  However, Kuzak was only half of the equation. In keeping with the tenets of Ford’s new, Mazda-inspired Global Product Development System, he would be paired with the global head of purchasing, Tony Brown.

  Brown was a smooth-talking African American supply expert with a rakish mustache, and he was far better liked by Ford’s parts manufacturers than was the company he represented. Brown was sympathetic to supplier concerns but more than capable of dishing out the tough love he knew the parts industry needed. He carried an ace of hearts in his briefcase—a personal totem invoking the heart and courage required to make tough decisions about Ford’s supply base. Brown had been vice president of global purchasing at the company since 2002, and unlike most of the other Ford executives who had the word global in their titles, he really did have worldwide responsibility for his function. But that function also had some serious issues.

  Ford was consistently rated one of the worst automakers to do business with by the industry’s leading suppliers. Of the major manufacturers, only General Motors scored worse. Parts producers resented Ford’s constant pressure to cut prices, its frequent last-minute design changes, and its grossly inflated production estimates. Suppliers had long ago figured out Ford’s game and were charging the company a premium on parts to cover these surpluses. If Ford asked them to set aside 20 percent more capacity for steering wheels than they thought the company would actually buy, they would simply raise the cost of those wheels by 20 percent. As a result, it cost Ford substantially more to build its cars and trucks. To make matters worse, Ford had historically maintained a large pool of suppliers so that it could pit them against one another in an effort to shave a few cents off the price of a particular component. In contrast, Japanese car companies such as top-rated Toyota signed long-term contracts with their suppliers and were often willing to pay a premium to those who could deliver the best quality.

  Under Brown’s leadership, Ford started trying to reform itself by launching an aggressive new supplier strategy in 2005. Called the Aligned Business Framework, it was a page right out of Toyota’s playbook. Brown’s plan was to dramatically reduce the number of suppliers Ford did business with, but forge deeper and stronger relationships with those that made the cut. It would take years to implement, but Ford’s ratings were already creeping up—albeit at a much slower rate than its Japanese competitors’. Most of Ford’s suppliers were willing to wait, partly because they needed the business, but also because they trusted that Brown would make good on his promises.

  Despite his important position in the company, Brown was not part of the senior leadership team when Mulally arrived at Ford. That changed quickly, though not before Mulally gave Brown’s reform efforts some added impetus. When Brown arrived at his first one-on-one with the new CEO, Mulally had the latest supplier survey from Planning Perspectives Inc. on his desk. It showed that suppliers were increasingly shifting the bulk of their capital investments and research-and-development expenditures to their Japanese customers. Parts manufacturers were making more effort to improve the quality of the components they supplied to these companies as well.

  “This doesn’t work for me,” Mulally said, tapping the report with his finger.

  Brown agreed that there was plenty of room for improvement and outlined his strategy for bettering supplier relations. It sounded good to Mulally—particularly the part about it being patterned after Toyota’s model. He told Brown to pick up the pace.

  With Kuzak in charge of global product development and paired with Brown, Mulally now had all of the company’s critical functions reporting to directly to him. Ford’s three regional divisions were now coequal business units, along with Ford Credit, and all four would now be represented at every Thursday BPR meeting along with each of the functional teams. The layers of bureaucracy that had insulated Bill Ford from the unpleasant details of the business had been eliminated. Just as important, Mulally now had the team he needed to begin transforming Ford from an automaker with operations around the world into a true multinational corporation—one capable of using its global scale and expertise to challenge the best in the business.

  On December 14, the automaker announced Kuzak’s promotion along with the other changes in the company’s management structure. Just before Ford issued the press release, Mulally sent an e-mail to employees explaining the importance of this corporate realignment.

  “Working together to make the most of our global talent and resources is critical to our success,” he said. “I know I can count on you to join me in supporting the leadership team during this transition. This is a great company. This is a terrific team. We have the right leaders. Together, we can do this!”

  Bill Ford once complained that his company had more political intrigue than czarist Russia. Now Mulally had stormed the Winter Palace and was ushering in change at a dizzying pace. He had made Derrick Kuzak his commissar of product development and ordered him to liberate Ford’s designers and engineers from bean counters and bureaucratic inefficiency. Major overhauls of manufacturing and marketing were being planned, and the search was on for new talent to lead them. Whole layers of corporate bureaucracy were being purged. But Mulally’s revolution had been relatively bloodless. Steve Hamp and Mark Schulz were gone, but those waiting for more heads to roll—and that included just about everyone following Ford—would be disappointed.

  As 2006 came to an end, the rest of Ford’s executives were quietly taking their places on Mulally’s team. Those first few months had been tough. These were people who had risen through the company’s ranks by mastering a game that was now fundamentally changed, and they were still struggling to learn the new rules. The smiling Kansan whom many executives had dismissed as a sappy rube had proven to be a regular radical, hurling bombs into their fortified bunkers and Molotov cocktails at some of Ford’s most cherished delusions. But Mulally had also proven himself to be an able and inspiring leader who, in a matter of months, had come up with a comprehensive plan to save Ford Motor Company from itself. Those who thought they could wait him out were gone. Those who were left joined Mulally
’s team and pledged allegiance to his plan—sometimes gritting their teeth and cursing under their breath, but doing it all the same.

  “I don’t care if everyone believes in the plan one hundred percent, as long as they act like they do,” Mulally told them. “Because once you start acting like you do, you’ll find yourself in the light—and you won’t want to go back into the darkness.”

  He was right. Though the bickering and backstabbing would begin again every time he left the office, Ford’s executives were starting to realize that these were no longer viable means of career advancement. At the same time, adherence to Mulally’s strict processes was starting to yield tangible results. Mulally’s cause was helped by the deepening crisis afflicting the rest of the domestic automobile industry. With each passing month, there were fewer and fewer places to go.

  But Mulally was taking no chances. Now that he had his team in place, he did not want to risk losing any of his top talent. With the board’s approval, he ordered Laymon to put together retention plans for each of Ford’s key executives—just in case. Mulally still had concerns about several of them, but he wanted to see if they could be rehabilitated. He knew that Ford did not have any executive talent to spare.

  By late December, the old turf wars were finally winding down.

  “If I have a technical problem, Lewis will say, ‘Hey, I’ll send a few guys over from Volvo to help you,’ ” Mark Fields explained at the time. “You don’t hear [Mulally] say the word ‘I’ a lot. It’s ‘we.’ It’s the team.”