This is what it’s going to be like for the next twenty years, Jim, he told himself.
He took his cellphone out of his pocket and called Bill Ford.
“I may be interested,” Farley said.
“Great,” Ford said. “I’d like you to meet our new CEO.”
Mulally was still looking for someone to lead Ford’s global sales and marketing operations. The lack of a chief marketing officer was the one big hole in his matrix organization. The position had not been filled after Hans-Olov Olsson retired in November 2006. While most of the company’s other functions were well on their way to being managed globally, sales and marketing was still largely a regional proposition, and Mulally was eager to change that. He had begun the search for a suitable candidate, taking personal responsibility for it because he knew this person would play a key role in the transformation of Ford. Farley’s name was already on the short list Joe Laymon had drawn up for Mulally when the Toyota executive decided to make the call.
During his next trip to Japan, Mulally had the Ford jet land at Los Angeles International Airport and met Farley inside a private terminal. Farley was nervous when he showed up for the lunch meeting. Toyota had been his life for seventeen years, and he felt like he was cheating on the company he loved. But he reminded himself that, unless he suddenly turned Japanese, that feeling would never be mutual.
Farley had no idea what to expect from Mulally. He had read about him in the newspapers but did not even know how to pronounce his last name. Like everyone else who encountered the grinning Kansan, he was immediately disarmed by Mulally’s charm—and by his lack of pretension. When Farley looked around for more dressing for his salad, Mulally got up and got it for him. That was something that would never happen at Toyota. But Farley did not think much of Mulally’s car company. He did not even consider Ford a competitor, except in the pickup truck segment.
They are totally irrelevant, he reminded himself, at least on this side of the Atlantic.
When Farley was the head of sales and marketing for Toyota in Europe, Ford was the company that kept him up at night. At the time, Ford’s design still left a lot to be desired there, too, but its products offered the precision handling and driving dynamics that European motorists craved. Toyota’s did not. Farley had done his best to forget that after returning to the United States, but he was reminded of it as Mulally pulled out a stack of printouts showing all of the cars and trucks Ford sold around the world and started spreading them out across the table. It was the collection of charts Mulally had pasted together himself shortly after arriving in Dearborn. He pointed to the page displaying Ford’s superior European lineup.
“Jim, just think if we could unleash the value of Ford’s global assets,” Mulally said, passing the sheet to Farley.
Oh my God! What if Ford had the driving dynamics from Europe, the quality of its Asian competitors, and the emotional appeal of cars that I love like the Mustang? Farley thought as he studied the printouts. If they could put all that together, it would be really cool.
Mulally liked Farley instantly. As a devotee of Toyota, he had followed his work with Scion and thought it exceptional. He also knew that Farley had a reputation for being the voice of the customer inside Toyota, often challenging its designers and engineers in constructive ways to give the people what they really wanted. It was not adversarial. Farley did not pit marketing against product development. It was about working with that side of the business to make the company’s products the best in the world. That was exactly what Mulally was looking for—someone who could work with Derrick Kuzak to make sure Ford’s products were even better.
As Farley drove back to Toyota’s U.S. headquarters in nearby Torrance, he considered the possibilities. He had grown up loving Ford—not the company that was, but the company that had been. His grandfather had raised Farley on stories of Ford’s glory days, and those tales were what drove him into the automobile business in the first place. Farley’s grandfather had not opposed his decision to Toyota, but he had asked him to find his way back to Ford if he could. Until now, that had seemed like a road to nowhere, but Farley began to wonder what it would take for Ford to reclaim its former greatness. The idea of helping Ford do that was suddenly incredibly exciting.
We could do this, he thought. Jim, there’s a whole other world you don’t know about. You could really leverage your skills.
Farley went over his own qualifications to make sure he was up to the challenge. He knew the American car business as well as anybody. He knew Europe. He knew the premium segment. He knew dealers. He knew about product planning. And, most important, he knew how to really shake things up.
If they are smart, they’ll give someone like me enough rope to hang himself, he mused. I think the situation is bad enough at Ford that they will be open to new ideas. But can I fit in, or will I be rejected like a bad organ?
Fitting in was Farley’s biggest concern. He knew Ford’s culture was quite a bit different from Toyota’s, and he worried that many of the executives in Dearborn might dislike him from the start because of his service to the enemy. But Farley desperately wanted to do something meaningful with his life, and he could think of nothing more meaningful than saving the American icon that his grandfather had helped create.
As soon as he got home that night, Farley’s wife knew he wanted to take the job.
“Damn,” she said. “I knew you shouldn’t have seen that guy.”
Farley may have been one of the highest-ranking Americans in Toyota, but his wife’s résumé was pretty impressive, too. Lia was a successful script supervisor in Hollywood. She spent her days working beside big-name directors and her evenings attending glamorous parties with Tinsel Town’s great and good. Jim and Lia both knew there would be little use for her talents in Michigan. She was also about to give birth again. Farley told her he knew he was being selfish, but said he would regret it for the rest of his life if he turned Ford down. After talking it over for a few days, Lia told him to call Mulally.
Farley had a couple of questions before he accepted the job. One was about compensation. The other was about Mark Fields. Farley knew the president of Ford’s Americas group would see him as a threat, and he wanted to make sure Mulally would have his back.
“Will you really let me do my thing, or will you let those guys kind of just squash me in the garage?” Farley asked.
Mulally assured Farley that no one would get in his way. But Ford’s CEO could tell there was something else bothering the Toyota executive. Mulally pressed him, and Farley admitted this was a tough decision for his wife. Mulally asked Farley to put her on the telephone. He worked his usual magic. They talked for nearly an hour. Mulally thanked Lia for giving up her career and promised that Farley would have a great one at Ford.
“Okay,” she said finally, passing the phone back to her husband.
“I’ll join you, Alan,” Farley said. Mulally congratulated him, but Farley cut him short. He had to take his wife to the hospital. His son was born a few hours later.*
On October 11, 2007, the automotive world was stunned by the news that Jim Farley was leaving Toyota to become vice president of sales and marketing at the still-struggling Ford Motor Company. His defection sent shock waves through Toyota’s North American ranks and left its dealers shaken and worried. Ford’s dealers could not have been more thrilled. Everyone in the car business knew about Jim Farley, and they could not wait for him to start working his magic at Ford.
“Jim is a car guy, and that means a lot to me as a dealer,” said Kent Ritchie, a longtime Toyota franchisee who had recently traded that dealership for a Ford store in Memphis. “I’ve seen him roll up his sleeves and get dirt under his fingernails. I think my investment just became worth a lot more money.”
Mulally was just as ebullient about the newest member of his senior leadership team.
“This is a big deal,” he said that afternoon. “I want him to really help me take the marketing capability and that functiona
l expertise to a new level of performance inside Ford, to bring the voice of the customer in—their wants, their needs, what they value—and to use that to help us design cars and trucks.”
A month later, Farley was at LAX, waiting for a red-eye to Dearborn. He paced the terminal, thinking about everything he had just given up and the enormous challenge that lay ahead in Dearborn. After decades of declining quality, product missteps, and corporate blunders, he had to convince the American people that Ford Motor Company deserved another chance. Farley walked into the bathroom, found an empty stall, and threw up.
Two weeks after it announced the hiring of Jim Farley, Ford sent out another press release announcing the retirement of Vice President of Communications Charlie Holleran. He was replaced by Ray Day, a quiet, calculating public relations executive who could not have been more different from his predecessor. Where Holleran had been easygoing and slightly rumpled, Day was a tightly wound neat freak who could not abide an out-of-place hair. Where Holleran had relied on experience and instinct, Day put his faith in research and analytical reports. That made him a far better fit with Mulally’s data-driven approach to management. Under Holleran, the communications department bucked that trend, insisting that what it did could not be quantified in the same way as sales or engineering. Mulally never believed that, and he told Day that he wanted the department to start acting like the rest of Ford. That meant functioning globally and living by its own set of metrics.
“If you can’t measure it, you can’t manage it,” Day agreed, and he quickly developed his own set of slides tracking purchase consideration, press coverage, and social media impact.
Day had been at Ford since 1989, and he had spent much of the past two decades thinking about what he would do if he were in charge of communications. Now that he was, Day ordered a sweeping reorganization of Ford’s public relations team and told everyone that their top priorities would now be building and defending the company’s reputation. The best way to do that, he said, was by “aggressively communicating” Mulally’s plan and Ford’s progress against it. Reporters were soon inundated with a relentless barrage of press releases, product briefings, and media dinners. Some journalists complained it was too much, but Day’s strategy made Ford impossible to ignore.
Mulally had Day report to Farley initially and told the two men to work together so that communications could support the new marketing strategy then under development. Farley hoped to unveil that strategy at the New York auto show in April 2008, but it was proving far more difficult than he imagined. Farley assumed his biggest challenge would be changing the way the American people thought about the company. Now his early research was revealing that, at least on the coasts, they did not think about Ford at all. From a marketing perspective, that was far, far worse.
One group that did care a great deal about Ford was its dealers. So Farley started with them. As a group, they had decidedly mixed feelings about the company. On one hand, most of them loved Alan Mulally and believed that he would deliver on his promise of better products in the not-too-distant future. On the other, most of them felt like it had been a long time since they had gotten a straight answer about anything from Dearborn. That was particularly true when it came to two issues near and dear to them: dealer consolidation and Mercury.
Though Ford could only claim 14.8 percent of the U.S. market, it still had roughly the same number of dealerships in the United States as it had when that figure had been closer to 25 percent. In big cities, that meant too many dealers were competing for a smaller slice of a shrinking pie. Many of them, like Ford itself, had been dying a slow death for years. They could no longer afford to keep up their stores, and it was hurting Ford’s image in the marketplace. General Motors and Chrysler were struggling with the same problem, and all three companies had launched nationwide campaigns to consolidate their dealer networks—particularly in major metropolitan areas. The idea was to reduce the total number of stores in a given area so that those that remained could do more business. In theory, this was an entirely voluntary process, with the automakers acting as matchmakers between franchisees who wanted to sell and those who wanted to buy out their competition. But as the head of Ford’s National Dealer Council, Tom Addis, was fond of saying, “Everybody wants to go to heaven, but nobody wants to die.” So Ford had resorted to arm-twisting.
Mercury was another sore point for dealers. The brand was the brainchild of Edsel Ford, who in 1938 recognized that the company needed a mid-market marque to bridge the gap between its luxury Lincolns and mainstream Fords. General Motors had already developed a comprehensive brand strategy with a different marque for every socioeconomic class that could afford an automobile, and Ford was losing customers to its crosstown rival as a result. Henry Ford, who still thought the world only needed one automobile, was reluctant to expand his lineup. But Edsel won a rare victory and persuaded his father to create Mercury. For decades Mercury did exactly what Edsel hoped it would. It brought in new customers who wanted something more than a Ford but less than a Lincoln. But by the 1990s, as the American market became crowded with foreign brands, it became increasingly difficult to find a niche for Mercury. The brand’s annual sales peaked in 1993 at 483,845 vehicles. By 2007 that figure had fallen to less than 169,000.
When Mark Fields returned to the United States at the end of 2005, he considered killing off Mercury. However, two new products—the Mercury Mariner and Milan—were about to arrive in showrooms, and he figured Ford needed to recoup its investment in them before pulling the plug. Dealers learned that Fields was taking a hard look at Mercury, and they wanted to know what Ford planned to do with the brand. The question was more than academic for those who owned stand-alone Lincoln Mercury franchises.* Most of those stores sold more Mercurys than Lincolns, and the dealers who owned them worried they would not be able to stay in business without the added volume that Mercury brought. Fields knew that, if his plan to do away with Mercury got out, sales would collapse. So he decided to string the dealers along until Ford was ready to summon the undertaker. Many of them suspected as much, and they were not happy. When Mulally arrived and started talking about focusing on the Ford brand, their fears were magnified. And while the new CEO was all about openness and honesty, he also knew that the details of his brand elimination strategy needed to remain secret.
Farley embarked on a tour of the country, scheduling meetings with dealers groups in each region. He could offer no more clarity on Mercury and told them the consolidation effort would continue until Ford had right-sized its retail sales network, but Farley did ask for their input in developing his new marketing strategy. He also told the dealer groups that, since they knew best what sold in their part of the country, they would now have a say in how Ford’s marketing dollars were spent in their region. Nobody at Ford had ever done that before. Both moves went a long way toward restoring dealer confidence. They also had an almost immediate impact on Ford’s sales. Dealers in California, for example, decided the company should focus on its new crossover, the Ford Edge. Ford put up billboard ads across the Golden State and offered more generous incentives on the vehicle there than it did in other regions. By February 2008, California—long a bastion of Toyota and Honda—had become one of the fastest-growing markets in the country for Ford.
Farley really did want the dealers’ input as he hammered out his new advertising campaign. He recruited a group of sixty from around the country and flew them to Dearborn to review the creative work and tell him what they thought of it. But he also knew from his experience at Toyota that, when dealers felt like they had a say in an automaker’s marketing strategy, they were more likely to support it with their own advertising dollars. And they did, to the tune of approximately $800 million.
At Toyota, Farley had all the marketing money he wanted. At cash-strapped Ford, he would have to do a lot more with a lot less. He decided to rely on the same guerrilla marketing tactics he had used to launch Scion. Early on, he and Day agreed that what they referred
to as “earned media” would be the key to getting the most bang for Ford’s buck. The idea was to spend more on public relations and less on traditional advertising—to get other people to tell Ford’s story for it. They assigned members of Day’s communications team to work with Ford’s dealers, for example, and used money earmarked for incentives to hire outside agencies to help Day put together a social media offensive. Soon, at Ford press conferences, old-school newspaper and magazine reporters in coats and ties found themselves seated next to unkempt bloggers and twenty-somethings with websites.
As Farley pieced together his new marketing strategy, there were more changes at the top of the house in Dearborn. Mulally decided that, just like communications and product development, Ford’s factories should also be managed centrally. He was pleased with Joe Hinrichs’ role in negotiating the transformational agreement with the UAW and, in December, promoted him to the newly created post of vice president in charge of global manufacturing.
A few months later Vice President of Human Resources Joe Laymon announced that he was leaving Ford. Once the UAW deal was concluded, he had walked into Mulally’s office and said his work in Dearborn was finished. Oil giant Chevron Corporation had made Laymon an offer, and he told Mulally he was going to take it. Mulally did not try to change his mind. Like Holleran’s, Laymon’s skills had been more in demand in the old Ford. Mulally did not need a hatchet man. Laymon was replaced by his second in command, Felicia Fields, a methodical African American woman who was more adept at putting together employee handbooks than Machiavellian plots.*
One of the biggest human resources challenges now facing the automaker was how to improve morale and keep workers focused on their jobs in the middle of the most painful downsizing in Ford’s history. Since Mulally had arrived in September 2006, more than 35,000 jobs had been eliminated in North America alone—mostly in the United States. That was on top of the thousands of positions that had been cut in the months before he was hired. In Ford’s factories, most of the downsizing had simply gotten rid of excess manufacturing capacity. Mulally’s drive to consolidate the company’s global operations meant fewer people were needed in other areas as well. But in many parts of the business, the employees who remained were being asked to do a lot more. And they were being asked to do it better than ever.
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