Oh, for Someone to Fill Henry's Shoes
It has been autumn in Detroit for a long time. And despite many predictions of better weather, it keeps getting colder.
For years now, the most popular sedans in America have been built by Japanese companies. In 2006, for the first time ever, foreign-based brands accounted for the majority of retail car sales in the United States. There's even been talk of importing French executive Carlos Ghosn, CEO of Nissan, to help revive either Ford or General Motors. Execs at the Big 2 have humored the idea-while maneuvering to keep the outsiders out.
Yet more pain is on the way. Ford and GM are both planning for steep drops in fall sales. And both companies face bruising battles with Big Labor over the next few years. By the time the dust settles, it's likely that America's two biggest car companies will be smaller and fundamentally different.
So is it any surprise that William Clay Ford Jr., great-grandson of Henry Ford, has shown himself the door? One might think so. Ford, who announced his replacement last week, has been CEO of his namesake company for just five years, and he's only 49-not exactly retirement age. When he took the job in 2001, Ford was reeling from the Firestone tire scandal and a series of missteps. Young Bill was supposed to be a steady guiding hand, steeped in family and company traditions, who would help return the Ford Motor Co. to its glory days.
It was a nice thought. And it was nullified in short order by the relentless pressures of the global economy.
By removing himself as CEO, Bill Ford has shown an unusual kind of courage-he has tacitly acknowledged that he is not the man qualified to lead his storied company back to greatness. In his five years, Ford presided over several rounds of plant closures and job reductions, with few tangible results. The stock has tumbled from about $16 a share in 2003 to about $8 today. The company lost $1.3 billion in the first six months of 2006.
So Bill Ford has handed the reins of his great-grandfather's company to Alan Mulally, a 37-year veteran of Boeing. By most accounts, Mulally is a savvy choice. He helped revive Boeing's commercial airplane unit, and he understands manufacturing. But he's also an outsider-an aeronautical engineer who drives a Lexus. Like a patient receiving a new kidney, Ford now faces a tense wait-and-see period while it either adapts to the new organ or decides to pin its hopes on some new miracle cure.
This story appears in the September 18, 2006 print edition of U.S. News & World Report.
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