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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.

M
ost 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.
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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.
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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.
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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 aiming 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.

K
uzak 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.

W
ith 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!”