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Authors: Bryce G. Hoffman

American Icon

BOOK: American Icon
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Copyright © 2012 by Bryce G. Hoffman

All rights reserved.
Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York.

www.crownpublishing.com

CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc.

Library of Congress Cataloging-in-Publication Data
Hoffman, Bryce G.
American icon: Alan Mulally and the fight to save Ford Motor Company /
by Bryce G. Hoffman.
p. cm.
1. Ford Motor Company. 2. Automobile industry and trade—United States—History.
3. Mulally, Alan R. I. Title.
HD9710.U54F636 2012
338.7′629222092—dc23                2011037155

eISBN: 978-0-307-88607-1

Unless otherwise indicated all photographs are courtesy of Ford Motor Company.

Jacket design by David Tran

v3.1

To MSN and MSH
,
and to my parents, Ned Hoffman and Billie Crowley
,
for a lifetime of support

CONTENTS

AUTHOR’S NOTE

W
hen I first started covering Ford Motor Company for the
Detroit News
in 2005, the automaker was fighting for its life. I had no idea whether Ford would win or lose, but I knew it would be a great story either way—the end of an American icon, or its salvation. For the sake of Ford’s employees, its investors, its dealers, the communities it operated in, and the nation itself, I hoped it would succeed. But I would write its story either way.

With that in mind, I kept careful notes from each of the hundreds of interviews I conducted over the next five years. As the Ford beat reporter at the
Detroit News
, I had a front-row seat for most of the events chronicled in this narrative. But I also knew there was much more to this story than had ever been told. When the time came to finally write the Ford story in its entirety, I knew that I would have to conduct many more interviews.

Once it was clear that the company had pulled off one of the most amazing turnarounds in history, I contacted Executive Chairman Bill Ford Jr. and Chief Executive Officer Alan Mulally and told them about my plan to write a book chronicling their epic achievement. I told them that I believed it was a fundamentally positive story that would be that much more compelling if it was told truthfully and in its entirety. To their credit both men agreed, offering Ford’s full cooperation with this project. I promised them nothing in return but fairness and accuracy.

Over the next year, I conducted more than a hundred interviews with players large and small in this drama. Many of these were conducted in person, and many lasted for several hours. All of them were conducted with the understanding that I could use any information discussed, provided that I did not attribute it to a particular source. This anonymity was necessary because many of the men and women I interviewed were still employed by Ford Motor Company and were only willing to speak frankly if such protection was guaranteed. “Where direct quotes appear, they are excerpted from previously published material. The final chapter is the exception to these rules. I wanted to give Alan Mulally an opportunity to speak directly to you, the reader, and share his thoughts about the events described herein.

With the help of the men and women I interviewed, I have reconstructed relevant dialogue wherever possible. This was done with the utmost care. When dialogue appears in quotes, the wording comes from the speaker, from another participant in that conversation, from contemporaneous notes, or from a transcript. Dialogue that does not appear in quotes is paraphrased or reflects the inability of the participants to remember the exact wording. “Where the specific thoughts of an individual are rendered in italics, they come directly from that person or from someone he or she shared those thoughts with at the time.

In the few cases where participants disagreed about the events described in this book, I have done my best to resolve those discrepancies by relying on primary source material. Many of the people I interviewed for this book shared their personal notes, calendars, and other documentary information. My research also benefited from a wealth of primary source material from Ford itself. I was given access to “top secret” company documents, internal memos, and archives. This level of access has never been granted to any other author or reporter. Much has been written about Ford’s turnaround and the fall and rise of the U.S. automobile industry in general. The information in this book in some cases contradicts what has already been published. When it does, the reader can be certain that I have rigorously relied on this documentary evidence to establish the facts.

Prologue

O
n September 5, 2006, I followed a public relations executive backstage at the media center inside Ford Motor Company’s world headquarters in Dearborn, Michigan. My minder knocked, stuck his head in the side door, and waved my colleague,
Detroit News
columnist Daniel Howes, and me through. Inside, the great-grandson of Henry Ford was smiling like a lottery winner. Bill Ford Jr. had just resigned as the automaker’s chief executive officer.

“You look happy,” Howes observed as Ford took a long swig from a bottle of water handed to him by an aide. Ford laughed.

“You have no idea!” he exclaimed as the world’s automotive press shouted into cellphones and pounded away at laptops on the other side of the curtain. “My wife is happy! My kids are happy! I’m happy!”

The man standing next to him was also smiling as he pumped my hand and slapped my shoulder. A few minutes before, Alan Mulally had become Ford’s new CEO.

“Doesn’t it worry you that the man who you’re replacing is doing the I’m-going-to-Disneyland dance?” I asked Mulally.

He flashed what would soon become his trademark grin.

“You don’t know much about me yet, Bryce, but let me just tell you one thing,” Mulally said. “No matter how bad Ford Motor Company’s problems are today, they aren’t as bad as Boeing’s were on September 12, 2001.”

The lanky, gingerbread-haired Kansan was president of the Boeing Company’s commercial aviation division. And though few outside the upper echelons of corporate America had heard of him, Mulally was already famous in business circles for having saved the aircraft manufacturer from collapse after the terrorist attacks on New York and Washington five years earlier prompted most of the world’s airlines to cancel their orders for new planes. Now, Bill Ford was asking him to save another American icon.

Ford may have been the company that put the world on wheels, invented the moving assembly line, and created the industrial middle class, but its glory days were long past. Together with General Motors Corporation and Chrysler Corporation, it had been a powerful engine of prosperity in postwar America. For half a century, from the 1920s to the 1970s, Detroit’s Big Three dominated the U.S. automobile market, accounting for
five of every six vehicles sold in the country. That market was still the largest in the world, but their share of it had been declining for decades. During the boom years of the 1950s and 1960s, American automakers had grown fat and complacent as new competitors emerged in Europe and Asia, studied their methods, and figured out how to beat them at their own game. That era of easy profit created a culture of entitlement in Detroit that afflicted management and labor alike—inflating salaries, wages, and benefits until they became the envy of the world. Success was viewed as a birthright, not something that had to be fought for and won. As the Big Three’s share of the market had shrunk, they had not. At least not fast enough. They all had too many factories, too many workers, and too many dealers. Generous union contracts negotiated in better times had created enormous legacy costs that their foreign rivals did not have to bear. And none of the American companies had the stomach for the radical reforms that were now necessary just to stay in business. Wall Street had begun a deathwatch, waiting to see which of the Big Three would fail first. Most of the money was on Ford, which had become infamous for lackluster designs, poor quality, and managerial infighting.

BOOK: American Icon
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