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Ford’s SUV factories, like those of General Motors and Chrysler, had become private mints. They were so profitable that Ford often flew parts in by helicopter when supplies ran low, rather than waste time sending them by truck. Nor did the Big Three have to share their windfall. For the first time in decades, the Japanese were nowhere in sight. They were slow to appreciate the importance of this new segment and would need years to develop credible offerings. In fact, as Detroit cashed in on the SUV craze, its Japanese competitors were struggling to cope with a rising yen that ate into their margins and forced them to raise prices, making their cars even less attractive to consumers now obsessed with trucks.

In 1998, Ford posted a stunning profit of more than $22 billion. It was the most money any automaker had ever made. A big chunk of that came from the spin-off of Associates First Capital Corporation, a financial services company Ford had purchased from Gulf+Western in 1989. But even without that boost, it finished 1999 with earnings of $7.2 billion.

A
s the automaker tried to figure out how to spend all that cash, its founder’s heirs were trying to figure out how to put the Ford back in Ford Motor Company.

Though Ford had been publicly traded since 1956, it was still controlled by the Ford family, thanks to some arcane financial prestidigitation. Once Henry Ford wrested control of the company from his original partners, he was determined to keep it in the family. Ford was always afraid that the big banks would somehow find a way to steal the business away from him. The best way to protect the company was to keep it private. But Ford later discovered something he feared more than Wall Street: inheritance taxes. In 1936, he established the Ford Foundation and arranged for most of the company’s shares to be transferred to the charity when he died, which he did eleven years later. By 1955, the foundation had become one of the most important philanthropic organizations in the world, a major international force in its own right. The Ford Foundation saw little value in maintaining its ties to the Dearborn automaker and informed Henry Ford II that
it intended to sell its shares.
^*
Hank the Deuce could not prevent the move, but his bankers did manage to set up a unique ownership structure that created two classes of shares: Class A, which would trade publicly on the New York Stock Exchange, and Class B, which would be owned exclusively by the Ford family. No matter how many shares of Class A stock were issued, these Class B shares would always wield 40 percent of the voting power.
^†
That gave the family enough votes to veto any decision—or elect a chairman.

At the end of the 1990s, the chairman the family had in mind was William Clay Ford Jr. Known as Billy to the rest of the family and Bill to most of Detroit, his roots in the automobile industry ran deep, even for a Ford. His father, William Clay Ford Sr., was the youngest of Edsel Ford’s four children. His mother, Martha Firestone, was the granddaughter of Harvey Firestone, the founder of Firestone Tire & Rubber Company, which had pioneered the mass production of tires and supplied them for Ford’s Model T.

The dimple-chinned Bill Ford looked nothing like his gaunt great-grandfather, Henry. He more resembled his softer and better-fed uncle, Hank the Deuce. The first thing most people noticed about the young Ford, besides his bright blue eyes, was his quick intellect and easygoing demeanor. He was personable, quick to smile, and possessed a self-deprecating sense of humor that was entirely unexpected in a man of such means.

Born in Detroit in 1957, Bill grew up in the posh enclave of Grosse Pointe Shores alongside Lake St. Clair. His father was a member of Ford’s board of directors and served as vice president and general manager of the company’s Continental Division. Bill grew up listening to discussions around the breakfast table about the company and the car business. But by the time he was in grade school, his father’s real passion had become football. William Clay Ford Sr. purchased the local National Football League franchise, the Detroit Lions, in
1963. The team rarely won, but it was not for want of trying. The elder Ford was fiercely competitive, and he tried to instill that same spirit in Bill and his three sisters.

“
Everything we did in our house was hypercompetitive,” Bill Ford would later recall, describing how cards and trivia games became contact sports in the Ford household. “The most innocent after-dinner game became cutthroat. There were no gracious winners and no good losers.”

Bill grew up surrounded by wealth and power. The family would winter at their home at Smoke Tree Ranch in Palm Springs, California. There the young Ford would wave at Walt Disney, who had a place down the street, and wait for his father to return from a round of golf with Uncle Frank—Sinatra, that is. But Ford pushed beyond the comfortable confines of his privileged childhood. He played hockey in a youth league in the blue-collar community of St. Clair Shores—often facing off against kids whose fathers toiled in Ford’s factories. He inherited his great-grandfather’s love of the great outdoors.
Ford’s fondest childhood memories were of summers spent at Fontinalis, a private fishing club in northern Michigan where he spent his days casting for trout along the banks of the Sturgeon River.

Like his father and grandfather, Bill Ford attended the prestigious Hotchkiss School in Connecticut, where he could study in the Edsel B. Ford Library or rush the net on the William Clay Ford Tennis Courts. Bill preferred football and hockey, but his sense of family history was strong. It was hard to miss growing up in southeast Michigan, where the Fords were regarded as American royalty. In Detroit, the names of Bill’s ancestors adorned not just tennis courts and libraries, but also hospitals, freeways, and, of course, automobiles.

After graduation, his father handed him the keys to a one-of-a-kind metallic green Ford Mustang and sent him to Princeton, where Bill Ford wrote his senior thesis on Henry Ford’s relations with the UAW. In college, Ford threw himself into the even tougher sport of rugby with a fearlessness some found almost frightening. By the time he graduated, he had broken several bones. Ford slapped a bumper sticker on his Mustang that read, “In rugby there are no winners, only survivors.” But he also studied Eastern mysticism and philosophy,
while at the same time
managing to get himself elected president of the Ivy Club.

After earning a degree in history from Princeton in 1979, Ford decided to go to work for his great-grandfather’s company—the one that made cars, not tires. He wanted to prove himself and was eager to be judged on his own merits, so he showed up for his first day as a product planning analyst with the name William Clay printed on his identification badge. He fooled no one. When 5
P.M
. rolled around, Ford looked up from his work and waited for the rest of the employees to leave. He was determined to be the last one out the door. But nobody budged. By 6
P.M
., a few of his coworkers were reading magazines. By 7
P.M
., one of them decided to order pizza. At 9
P.M
., Ford finally pushed back his chair and headed for the door. So did everybody else.

Bill Ford’s dedication to Ford Motor Company was evidenced by the simple fact that he showed up for work each day. He certainly did not have to. If he had chosen to spend his days sitting on the beach of a small private island, few would have faulted him for it. By the fourth generation, the heirs of most other industrial fortunes had long since devoted themselves to a life of leisure. After putting in a few years at the company, Ford resumed his education, earning his master’s from the Massachusetts Institute of Technology’s Sloan School of Management in 1984. Then it was back to work. Bill was named head of Ford of Switzerland in 1987. The alpine nation was not exactly a major market, but the skiing was excellent. A year later, he and cousin Edsel Ford II were elected to Ford’s board of directors, where they soon locked horns with Petersen. They won their fight for greater responsibility, and Bill was promoted to head of business strategy for the Ford Automotive Group in 1990. Ten years later, Ford won a different sort of battle with his cousin to become the next head of the Ford family.

Bill Ford was now ready to assume what he and many of his relatives considered his rightful place at the head of Ford Motor Company. However, he bore little resemblance to Detroit’s ideal of an automotive executive. Bill dabbled in Buddhism. He played folk guitar. He also had become an ardent environmentalist. Bill believed in global warming and thought his company’s cars and trucks were
contributing to it. The biggest management challenges he had faced involved his father’s football team, and it had one of the worst records in the NFL. Alex Trotman, the wiry Scotsman who had presided over much of the automaker’s recent success, considered Bill and Edsel “
rich dilettantes ill equipped to meddle with one of the world’s largest companies, even if their name was on the building.” Trotman seemed to forget that his was not. When the board of directors pushed him to choose Bill Ford as his successor, Trotman resisted. The directors overruled him. Trotman shook his head and left the boardroom, pausing as he passed the young Ford.

“
So now you have your monarchy back, Prince William.”

B
ut Ford’s rising son would not rule alone.

While Ford’s board was willing to give Bill Ford a chance, many of the outside directors had their own reservations about his ability to run the company. If nothing else, he was very young—just forty-one when he officially took over on January 1, 1999. Their solution was to divide the office of chairman and CEO into two positions and pair Ford with an experienced chief executive.

The man they chose was Jacques Nasser, a suave and swaggering Arab who had been born in Lebanon and raised in Australia. He was ten years older than Bill Ford and considered one of the company’s most talented executives.

The two men could not have been more different. Ford had been born into a world of wealth and power, but had grown into a relatively down-to-earth adult who went out of his way to rub elbows with the common man. Even after becoming chairman, he continued to play hockey on a team that included Ford factory workers. After Princeton, Ford had switched to a particularly brutal variant played outdoors on ponds that added freezing rain and snow to the usual fare of flying pucks and body checks. He tired of stuffy Grosse Pointe and moved his family to a seventeen-acre wooded estate on the Huron River in Ann Arbor, a college town with a slightly bohemian bent about forty-five minutes west of Ford World Headquarters. On weekdays, Bill Ford drove himself to work—in either a new Mustang or an F-150
pickup. On weekends, he Rollerbladed to the local Starbucks. And he remained an outspoken environmentalist, even though his company had become a lightning rod for green anger. Ford’s office was decorated with hemp wall covering and undyed cotton curtains woven on a solar-powered loom.

As a poor, dark-skinned immigrant boy in rough-and-tumble Australia, Nasser had grown up battling bullies and scrounging for cash. As an adult, he worked like a man possessed to distance himself from that past, surrounding himself with the trappings of power and wealth. He preferred to travel in limousines, worked seven days a week in an office decorated with polished steel and black leather, and even had his desk placed on a raised dais to compensate for his short stature. After earning a degree in international business from the Royal Melbourne Institute of Technology, Nasser had joined Ford of Australia as an analyst in 1968. Over the next thirty years, he bounced around the world and made his way up Ford’s corporate ladder, ultimately becoming head of all automotive operations in 1996. During his ascent, Nasser developed a reputation as an aggressive cost-cutter, earning the sobriquet “Jac the Knife.” The
board saw him as a fiscal disciplinarian who could make hard decisions without flinching, the perfect counterweight to Bill Ford’s youthful idealism.

It all seemed perfectly logical, except for two problems. First, neither man really wanted to share power with anyone. Second, once Nasser became CEO, his fiscal discipline seemed to vanish overnight. Eager to inscribe his name alongside the greats of American capitalism, Nasser succumbed to the irrational exuberance that was spreading like a pandemic through the business world in the go-go days of 1999. He saw what was going on in places like Silicon Valley and wanted a piece of it. He idolized General Electric’s Jack Welch, who had become the darling of Wall Street by shifting GE’s focus from microwave ovens to financial services, and figured he could do something similar with Ford.