Once Mulally came up with his plan, he never doubted it would succeed. From the start, he evinced an almost religious conviction in its four points. It was a belief born of an engineer’s faith in numbers.
“The data says, if you take these actions it’ll work,” Mulally said when asked how he could be so certain, even in the midst of a crisis that was toppling his competitors. “Running a business is a design job. You need a point of view about the future, a really good plan to deliver that future, and then relentless implementation.”
Alan Mulally has now saved not one, but two American industrial giants. His success at Boeing alone would have been enough to ensure his place in the annals of American business history. With the turnaround of Ford added to his list of credits, many would rank him among the greatest CEOs ever.
Mulally’s serial success also proves that his unique approach to management—the weekly meetings, devotion to data, and emphasis on working together—is portable. Mulally always believed that. He used the same system to raise his family and run his tennis club. Now he is more certain than ever that the Mulally method is as applicable to small nonprofits as it is to major multinational corporations.
“What I have learned is the power of a compelling vision, a comprehensive strategy, a relentless implementation process, and talented people working together based on those commitments,” he told me during our last interview for this book, in May 2011. “We laid out a plan, and for four and a half years, we have been relentlessly implementing that plan.”
That meant dealing with reality, no matter how harsh it might be. It meant sowing the seeds of future growth even as the company struggled to make it to tomorrow. And it meant staying the course, no matter how difficult that became.
“You’ve got to trust the process. You need to trust and nurture your emotional resilience,” he said. “Do you have a point of view about the future? Check. Is it still the right vision today? Check. Do you have a comprehensive plan to deliver that? Check. If you get skilled and motivated people working together through this process, you’re going to figure it out. But you’ve got to trust it.”
The leader’s job is to remind people of that vision, make sure they stick to the process, and keep them working together.
“Working together always works. It always works,” Mulally stressed. “Everybody has to be on the team. They have to be interdependent with each other.”
At Ford, the ultimate interdependency was the one that existed between Mulally and the man whose name was on the side of the building. He and Bill Ford made a great team. Mulally had the business and leadership skills that Ford lacked. Ford understood the history of his company and knew what it needed to do to save itself. But Ford did not spend a lot of time telling Mulally what to do. If his CEO had concerns, he listened to them and handed them back as questions. Most of the time, Mulally was just looking for someone to validate what he already believed. Ford helped him with the board, too, offering advice about when to pitch ideas and how to sell them. And of course, he kept the family out of Mulally’s way.
The Ford family as a whole deserves a great deal of credit for keeping its faith in the company through the biggest crisis in its long history. It was the Fords’ determination not to sell out that kept the board of directors from moving forward with “other options.” Their continuing control of Ford through their supervoting Class B shares is much maligned, but regular investors would have abandoned the company long ago and left it for the bankruptcy attorneys to pick apart. The Fords brought stability and a long-term view that other corporations secretly envied.
“I am very proud of the family and our board. They hung together through an almost impossibly difficult time, where everything that they were picking up and reading every day was worse than the prior day,” Bill Ford told me. “Every indicator was that this company was not going to make it. Our board and our family refused to accept that. They said, ‘If that’s true, we’re going to go down swinging.’ And that was certainly my thinking.”
Bill Ford’s own substantial contributions to the company’s turnaround have often been lost in the glare of the spotlight that shined so brightly on Alan Mulally. If the great-grandson of Henry Ford had not stood up and taken back his company, Jacques Nasser would have surely run it into the ground. And while he could not bring himself to cut deeply enough, Ford began the difficult and painful process of downsizing his company. He also understood the primacy of product. He personally approved many of the cars and crossovers that would become synonymous with Ford’s turnaround, including the Ford Fusion, Edge, and Escape Hybrid. And Bill Ford not only okayed Leclair’s borrowing plan, but also convinced the board and the family to mortgage the entire company to secure those loans. Without his dogged determination to preserve the Ford legacy—not just for his family, but also for Ford’s employees, its shareholders, and the nation as a whole—Ford’s story might have had a very different ending. It was not just Bill Ford’s willingness to step aside and make way for Mulally that helped save the company. It was also his unceasing effort to give him the time, the space, and the resources he needed for his revolution to succeed. Without that, Mulally may well have become just another victim of a company and a culture that seemed impervious to change.
I once asked a group of Wall Street bankers what they thought the biggest threat to Ford’s future was, now that the company had turned the corner. Was it the ongoing instability of its suppliers, the increasing price pressure in Europe, or the threat of a second Asian invasion from China? Before I could even finish listing all the risks, a guy from BlackRock cut me off.
“The biggest threat to Ford Motor Company is that Alan Mulally steps off the curb tomorrow and gets nailed by a bus,” he said.
“Yep,” the others agreed. “That’s it. They can manage everything else.”
That was at the end of 2009. Concern about the end of Mulally’s tenure at Ford would increase as the months went by. Those concerns became all the more pressing after he turned sixty-five in 2010. By 2011, hardly a press conference went by without someone asking Mulally when he planned to retire.
“I haven’t thought about that at all,” he insisted when reporters pressed him on that point after the company’s annual shareholders meeting in May.
But everyone knew the clock was ticking. Few outside the company saw an obvious successor inside the Glass House, and many industry observers openly doubted whether the changes Mulally made in Dearborn could endure once he had left the building. Many Ford employees shared these concerns. The questions of when Mulally would leave and who would replace him were enough to make any room in Dearborn fall silent.
The ultimate test of Mulally’s revolution will be its ability to endure his absence. Boeing has suffered major setbacks since Mulally left Seattle in 2006. Insiders say that is because his successors have failed to maintain the processes Mulally put in place to guarantee success. When asked if the same thing could happen at Ford, Mulally says simply that he has given Ford the tools it needs to prosper. What the company does with them after he retires is beyond his control. Ford’s history is a long list of stunning successes followed by epic failures, of against-all-odds comebacks that turn into retreats back into mediocrity and mismanagement. But there are important differences this time that augur well for Ford’s future.
Many of Ford’s previous comebacks were based on breakout hits like the Model A, the Mustang, and the Taurus. Mulally’s plan was predicated on a sweeping transformation of Ford’s entire product portfolio. It was also about changing the way the company designed and built its cars and trucks. Henry Ford used mass production to cut costs and boost efficiency, then passed the savings on to consumers. Mulally and his team globalized product development, shared platforms, and introduced new vehicles that looked better, drove better, and cost less than the ones they replaced.
Ford’s earlier recoveries were driven by strong leaders who too often became the objects of sycophantic devotion and slavish obeisance. The
se men inevitably became so concerned with preserving their power and positions that they drove away other talented executives or pitted them against one another in order to prevent a worthy successor from rising to the top. A cult of personality certainly developed around Mulally, too. Men and women throughout the company would rise to their feet and cheer when he walked into a room. They would blush when he hugged them in the hall and shyly ask for autographs. They would thank him with quavering voices at town hall meetings for saving the company and their jobs. But for all that, Mulally himself never ceased talking about the team. He constantly thrust forward other executives at press conferences, praising their contributions to Ford’s turnaround and making sure they got a share of the credit for it. Away from the public eye, he was constantly pushing his subordinates to share in the decision-making process and lead their own divisions the same way he led Ford as a whole.
But the biggest and most important difference between Mulally and his predecessors is that he attacked the root of the problem: Ford’s corporate culture. He took a sledgehammer to the silos that had divided the company into warring fiefdoms for generations. He forced everyone to stare reality in the face without flinching or turning away. It was not easy, nor instantaneous, but in the middle of a truly existential crisis, Ford’s executives finally stopped making decisions based on what was best for their own careers and started trying to figure out what was best for the company as a whole. That was something that had never happened before in Dearborn, and it was the key to Ford’s phenomenal resurgence. But only time will tell if Mulally has actually cured the disease or simply driven it back into remission.
In 2011, at least, there was no evidence of the complacency that inevitably followed earlier rebounds in Dearborn. Instead of resting on their laurels, Mulally and his team were still toiling to improve Ford’s balance sheet, raise its credit rating, redeem the Blue Oval, and restore dividends. The stalled recovery in the United States and new economic problems abroad meant none of these things would come easy. And there were still bigger goals beyond those. Ford was now competing to stand beside companies like Toyota and Volkswagen at the forefront of the global automotive industry. In June 2011, Mulally vowed to double sales worldwide by 2015.
“Keep your foot on the gas!” became his constant refrain.
Ford’s aggressive growth strategy is not without its risks. Toyota’s problems began when it decided to challenge General Motors for the title of world’s largest automaker. The company that was once content to be the most admired in the world began cutting corners and getting sloppy. There is no sign of that happening at Ford today, but making sure it does not will require constant vigilance.
Still, the real challenge facing Ford Motor Company today is institutionalizing Mulally’s revolution. Mulally has given the company a system that, if rigorously adhered to, should prevent Ford’s chronic disease from reasserting itself. He has also given it a bench of leaders who know how to win.
“We’ve been through the trenches. We saw the setbacks. And we saw it work,” Mark Fields told me. “Everybody just benefits so much when you develop a plan, you implement it, you work through the issues, you work through the setbacks, and you see the points start going on the board.”
On January 12, 2011, Bill Ford asked Lewis Booth to deliver the keynote speech to Ford’s senior executives from around the world who had convened for the company’s annual global leadership meeting in Dearborn. He started by listing everything Ford had achieved over the past year—paying down the debt, paying off the VEBA, and shifting the entire organization back into growth mode.
“This is I think the best thing I’ve seen in my thirty-something years at Ford, the opportunities ahead of us. This is absolutely the best thing. And if this doesn’t make you break out into a sweat, you should, and give yourself a good shake because this is just a fantastic opportunity ahead of us,” he said, his voice heavy with emotion. “This is our moment to change the business forever.”
Henry Ford once said, “A business that makes nothing but money is a poor kind of business.” Ford Motor Company has certainly made a great deal of money since Alan Mulally started there in 2006. But it has also made people believe that the highest principles of American enterprise—ingenuity, innovation, and integrity—have not deserted us entirely. In an economic era marked by avarice and greed, Mulally’s Ford has demonstrated that a company can still succeed by building a good product and selling it at a fair price. As the big Wall Street banks tried to hide their mounting failures, Mulally was exposing Ford’s shortcomings and challenging his company to overcome them. Wall Street’s obfuscation and trickery would ultimately drag the entire world into the Great Recession. With Mulally’s relentless determination to succeed, Ford would defy that downturn and once again become an engine of prosperity.
From the day he arrived in Dearborn, Mulally said he was fighting for the soul of American manufacturing. If Ford had failed, a little bit of America would have died, too. But Ford did not fail. Under Mulally’s leadership, it showed the entire world that at least one American automaker could pick itself up, shake off the rust, compete with the best in the business, and win.
ACKNOWLEDGMENTS
This work would never have been possible without the help of many extraordinary individuals. There are too many to name, and some of them would prefer to remain anonymous. But among those whom I can name publicly, I must begin with Bill Ford Jr. and Alan Mulally, for without their cooperation it would have been impossible to tell this story in such detail. Both men gave generously of their valuable time, offering a perspective on the events chronicled herein that would have been unobtainable from any other source. Their support for this project also gave me access to the rest of Ford Motor Company’s executives, the automaker’s archives, and other important sources. That they were willing to sanction it without any promise of editorial review or influence is a powerful testament to their faith and confidence in the Ford story.
I am also indebted to many others at Ford, beginning with Mark Truby. Before he joined Ford’s corporate communications staff in 2007, Mark was my editor at the Detroit News. He hired me to cover the automaker back in 2005, taught me everything he knew about its secrets, and showed me how to extract more. Mark was the best newshound I have ever met, and I owe much of whatever skill I possess as a reporter to his tutelage. At Ford, he was a powerful advocate for this project and an invaluable aid in my work on it. He and his staff set up many of the interviews I conducted for American Icon and spent a great deal of time and energy assisting me with my research—at least until he was transferred to Germany in early 2011. That burden then shifted to Karen Hampton, who had already been a tremendous help as Mulally’s media liaison. Karen and her staff did far more than any author could have hoped for, often spending hours or even days tracking down the most minute detail or checking the most obscure fact. My seemingly endless requests would have tried anyone’s patience, but not Karen’s. She answered them all promptly and cheerfully, and for that I am truly grateful. I am also indebted to Mark and Karen’s boss, Ray Day, who first discussed the idea for this book over lunch with me more than two years ago. It was Day who presented this project to Ford and Mulally and urged their cooperation. To him and to the other Ford executives, both current and former, who participated in this project, as well as their assistants, I offer thanks.
I would also like to thank my friend Eric Selle of J.P. Morgan Chase & Company for making me smart about the more arcane financial matters covered in this book.
I am, of course, forever indebted to my fantastic agent, Jane Dystel. Jane has proven an invaluable ally, counselor, and advocate. Her help in navigating the complexities of the publishing business is cause for near constant thanks. I would also like to thank her partner, Miriam Goderich, for her help in preparing my book proposal, along with the rest of the staff at Dystel & Goderich Literary Management for their help in making this happen.
Of course, it never would have happened w
ithout Roger Scholl, my editor at Crown Business, who made a big bet on an unknown author and also proved a great collaborator. His enthusiasm for this project and patience with me has been beyond anything I could have hoped for. I would also like to thank his assistant, Logan Balestrino, as well as Paul Lamb, Dennelle Catlett, and everyone else at Crown who believed in this project and has worked to make it a success.
I am also indebted to the Detroit News for allowing me to cover this amazing story and giving me the time off to write this book. That was no small thing in this era of ever-shrinking newsrooms. I would particularly like to thank publisher Jon Wolman, managing editor Don Nauss, and business editors Sue Carney and Joanna Firestone for their patience and support, as well as the other members of the Detroit News autos team, who were forced to pick up the slack during my long absence. I have been fortunate at the News to have worked with and learned from some of the best automotive journalists in the business, including Christine Tierney and Bill Vlasic. But it is to Daniel Howes that I owe my biggest thanks. He has been my mentor and confessor through some very trying times, has always been there to poke holes in my hypotheses with his encyclopedic knowledge of the automobile industry, and has helped me to become the writer that I am today.
In that, I am also forever indebted to the author Herbert Kohl, who was the first to see my potential as a writer and the first to encourage me to pursue this path in life. I was still in high school when I first met Herb. He helped me hone my talents, showed me what I could do with them, and gave me a kick in the pants when I needed it. And he has been there for me whenever I have needed him ever since.
So have my parents, who have supported me in this and just about everything else in life, even when that was hard.
All of these contributions were enormous, yet they were dwarfed by the help rendered to me in this and in all things by my amazing wife, Gretchen Meyer-Hoffman. Proofreader and editor, cook and collaborator, shrink and soulmate, she was my constant companion at every stage of this project, just as she has been every step of the way for more than eighteen years. She has always believed in me, even when I have not believed in myself, and this book was no exception. Gretchen’s name really deserves to stand next to mine in the credits, but she is far too modest for that. So instead I say simply, “Thanks.”
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