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heers broke out in Dearborn as word spread that Bill Ford had ousted Jacques Nasser and was taking over Ford Motor Company. Employees actually wept in the parking lot when the Blue Oval was hoisted back up to the top of World Headquarters as a final symbol of Nasser’s undoing. Letters of thanks poured in from dealers around the country, and parts manufacturers breathed a deep sigh of relief. Bill Ford had been right. The only thing that could save the company and mend its tattered relationships with workers, dealers, and suppliers was putting a Ford back in the driver’s seat.

But not everyone was celebrating. Wall Street had long viewed the Ford family’s control of the automaker as an anachronism that prevented shareholders from realizing the true value of their investment, and analysts openly doubted Bill Ford’s ability to lead. The $5.45 billion loss Ford reported for 2001 did not help. Nasser and the September 11 terrorists were responsible for most of that, but it marked the end of nine years of steady profits and fueled fresh concern about Ford’s future. The company’s credit rating was downgraded and its stock tumbled.

Bill Ford did what Ford CEOs had always done when confronted with financial calamity. He cut and cut deep. In January 2002, he announced that the automaker would close five factories in North America and eliminate more than 21,000 jobs. Ford may have been a man of the people, but he had also promised to do whatever was necessary to save his company. That included reducing dividend payments, a
move some in the family complained about. At the same time, Ford went after the trappings of executive excess that had come to symbolize Nasser’s regime. He fired high-priced consultants, told executives to cut back on conspicuous consumption, and replaced the filet mignon and salmon normally served at lunch meetings with sandwiches. He even got rid of some of
the company’s jets. More important, he refocused Ford on its core business of building and selling cars and trucks. With the battle cry “Back to Basics,” he began extricating Ford from the other ventures that his predecessor had found so much more compelling than manufacturing automobiles. Bill Ford increased product spending, which Nasser had cut to fund his acquisition binge. He ordered a new push to improve quality. And he told veteran engineers that their experience was still valued in Dearborn. He got rid of the bankers who were running Ford Credit into the ground and replaced them with men who understood that its primary function was to support sales. He went to Wall Street and raised $4.5 billion, starred in the company’s television ads, and even tried to take on the automaker’s notoriously noxious culture.

For years, Ford had hidden its lack of product investment behind cute catchphrases like “cheap and cheerful”—Dearbornese for a bare-bones compact; “fast follower”—code for a car that was essentially a knockoff of what Ford’s competitors already had in their showrooms; and “last in, best dressed”—a rather lame excuse for being the final automaker to enter a particular segment. They were the doublespeak of a company that had learned to justify its own inadequacies, and Ford ordered them banished from the corporate lexicon.

“How do we get back to product leadership?” he asked his designers and engineers. “As long as those phrases are being bandied about, we never will.”

He knew Ford could do better. In Europe, it already was. Ford’s products were well regarded on the other side of the Atlantic and the company was even making money off them, which was more than Ford could say about most of its North American cars. Sport utility vehicles and pickups were still profitable, but everything else was at best breaking even.

“We have relied far too long on a few home runs,” Ford told his
team. “We need to hit a bunch of singles, not swing for the fences. We have to make each vehicle profitable.”

By the end of 2002, Ford was back in the black.
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Warranty costs were down. Ford had
climbed two slots in the influential J.D. Powers and Associates initial quality survey and was no longer dead last among the world’s major automobile manufacturers. But no one was convinced that Ford had actually turned the corner. The company’s stock dropped below $10 a share for the first time in ten years that fall, and Ford’s credit rating continued to slide. Bill Ford began to feel like the Rodney Dangerfield of the automobile industry. No matter what he did, he could not seem to get any respect.

H
owever, the skeptics were right to be wary. The company may have been making money again, but Bill Ford was struggling.

After sanctioning his coup d’état in October 2001, the board of directors had hoped that—with a little coaching—Ford would rise to the occasion and become a truly effective chief executive. To make sure that he did, the board asked director Carl Reichardt to mentor the forty-four-year-old. Even at seventy, the former head of Wells Fargo was one of the sharpest financial minds in America. He was a titan of the banking industry from the days when it could still be mentioned in polite company, a man Warren Buffett had called one of the best managers in the business. Reichardt was comfortably ensconced on a sprawling ranch in California and planned to retire from the board in six months, but he agreed to come to Michigan and serve as Ford’s vice chairman. He would get the company’s finances in order, fix Ford Credit, and try to teach young Bill how to run the company.

Assembling the rest of the team proved a challenge—and an urgent one, considering that many of Nasser’s top executives had followed him out the door, either on their own or with Bill’s boot close behind. What was left of Ford’s bench was pretty weak. There was still plenty of talent inside the company, but much of it was buried
beneath a thick layer of executives who were more adept at advancing their own careers than running a car company. They tended to view their high positions as rewards for long service and worried more about enjoying their perks than about the problems facing Ford.

Bill Ford did the best he could. He found an able enough president and chief operating officer in Sir Nick Scheele, a likable Brit who had managed to do what many thought was impossible—make Jaguar profitable, at least for a while. Queen Elizabeth II knighted him for his effort to save the beloved British brand. As head of Ford of Europe, Scheele commenced a promising restructuring and put together a product team that was actually creating some world-class cars. His work on the other side of the Atlantic was far from complete, but none of it would matter if Ford’s North American business continued to decline. Ford put an unlikable Brit, David Thursfield, in charge of the company’s international operations. The iron-fisted cigar chomper was known for his cutting comments, but he also knew how to cut costs. Ford gave North America to Jim Padilla, an amiable Detroit native who was obsessed with quality. Padilla had a mind for manufacturing but quickly found himself out of his depth when he strayed too far into other aspects of the business.

It was not the strongest team, and Ford knew it. Thursfield and Padilla were soon locked in mortal combat, each convinced that the other was elbowing in on his turf. When one walked into a room, the other left. Soon, lower-level executives were choosing sides and conspiring to undermine the other’s efforts. European cars were tweaked so that they could not meet U.S. safety requirements without expensive engineering changes, and cutting-edge technology developed in America was kept from the team in Europe. Scheele at least remained a trustworthy adviser and could be extremely effective when he was focused. Unfortunately, that was not always the case.

Ford got more help a few months later, in May 2002, when Allan Gilmour agreed to come out of retirement and replace Nasser’s chief financial officer. Gilmour had already put in thirty-four years at the company, and Bill had worked for him before he retired as vice chairman in 1995. Convincing Gilmour to come back was not easy. After his retirement, he had come out of the closet—a move that proved
particularly shocking in an industry that still considered machismo a job qualification. But Gilmour hoped to help his former protégé figure out how to run the company. The board hoped that he, along with Reichardt, would teach Bill how to do it on his own. Both men admired Ford’s vision. They wanted to help him realize it. When big decisions were required, they walked him through the various options but tried to leave the final choice to him. But Bill Ford preferred to defer to their experience.

When Ford did make decisions, he had a tough time getting his subordinates to implement them. They would agree with whatever he suggested, then do whatever they wanted. If Ford pressed them, they offered complicated excuses that he lacked the data to refute. But he rarely challenged them. Ford preferred to avoid confrontation. He had promised the board that he would do whatever was required to turn the company around, but after a year as CEO, the burden of leadership was weighing on him. Ford was still interested in the big picture, but he had tired of the details of managing the company’s day-to-day operations.

“
I can’t say I’m having fun yet,” he acknowledged in an October interview with
BusinessWeek
.

B
ill Ford knew he needed help, and he knew he was not going to find it inside the company. He asked his director of human resources, Joe Laymon, to start looking outside the company.

Joe Laymon was not a typical HR director. He did not spend a lot of time thinking about new ways to track mileage expenses or morale-building exercises. Laymon was an African American, and his father was a migrant farmworker, moonshiner, and civil rights activist from Mississippi. Laymon had picked his share of cotton before earning a master’s in economics from the University of Wisconsin in Madison. He went to work for the United States Agency for International Development in Zaire, then took senior positions at Xerox and Eastman Kodak before arriving at Ford in 2000. There he soon became one of Bill Ford’s most trusted advisers—and his feared enforcer. Laymon was something of a latter-day Harry Bennett who, like
his legendary predecessor, also ran Ford’s internal security force. Unlike the brash Bennett, Laymon was a soft-spoken man whose friendly demeanor masked a calculating ruthlessness that other executives roused at their own peril.