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Ford chief struggles to steer family business

Even those who admire William C. Ford's fierce dedication to the family auto brand say his first four years in the top executive job have been a disappointment.
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

In January 2002, William C. Ford Jr. stood before the microphones in Dearborn, Mich., and declared that his family's auto company had lost its way. He announced major job cuts and plant closings. And he pledged to reverse the company's dwindling fortunes by going back to basics: making quality cars and trucks the American public would clamor to buy.

Yesterday, the Ford Motor Co. chairman and chief executive stepped up to the podium once again. And said basically the same thing.

Even those who admire the 48-year-old Ford's fierce dedication to the family brand noted the similarities and said they highlight the extent to which Ford's first four years in the top executive job have been a disappointment.

"I don't think he's fulfilled any of the key promises or plans he laid out," said Art Spinella, president of CNW Marketing Research Inc., an automotive research firm. "Ford should have become the Honda of U.S. automakers. But [William] Ford just did not move fast enough."

Explanations for Ford's difficult first four years as chief executive abound. Some say he never really wanted the top executive job (he took over as chairman of the board in 1999) and was reluctant to sign off on the big job and production cuts necessary for Ford to thrive in an increasingly competitive, global market. Others say he vastly overestimated the American appetite for gas-guzzling -- and highly profitable -- sport-utility vehicles and was surprised when that demand sank as gas prices soared.

Those with the most sympathetic view of Ford's tenure contend that he spent much of his first four years as chief battling the vast and legendarily entrenched Ford bureaucracy. These people say that only now, with the company's prospects increasingly dire, does the chief executive have the free hand he needs to remake the company.

"I think up to now it has all been windup, and today was the big pitch," said historian Douglas Brinkley, author of "Wheels for the World," a history of Henry Ford and his auto company. "It's hard to have vision when you are trying to keep the board happy and improve the bottom line every year."

But now Bill Ford, as he is known, has at least returned the company to overall profitability, even though its North American operations continue to lose money. Yesterday he said the company will no longer give earnings predictions to Wall Street, possibly lifting at least some of the burden for immediate bottom-line results from his latest turnaround effort.

Ford also pledged to cut up to a quarter of the North American workforce and idle 14 facilities by 2012. And he pegged the company's future to producing stylish, environmentally friendly hybrid cars and trucks that he hopes will be embraced by the vast car-buying middle class in America, not just environmentally inclined elites on the East and West coasts.

"The plans we announced in 2002 were not wrong," Ford said in a press conference yesterday, addressing concerns that he was simply repeating himself. "They took us as far we could go without making dramatic changes. But that's not nearly far enough, especially in light of how much the global marketplace has changed."

Reluctant CEO
According to Brinkley, Ford is finally attempting to do what previous company executives have always done when faced with impending disaster: Bet the ranch on new products such as the Falcon, Mustang and Taurus.

"Under Bill Ford Jr.'s leadership, there hasn't been one vehicle that's been a real cash cow," Brinkley said. "Now I think he's made his move, and he is going to be known from now on as Mr. Hybrid. If he is successful, he'll be a historic figure."

Bill Ford was admittedly a reluctant chief executive. Though groomed from birth for a top post in the family business (prep school at Hotchkiss, college at Princeton, 15 jobs at Ford from the assembly line on up), he told Business Week in 2002 that he did not fight for the chief executive spot after he and the board fired Jacques A. Nasser in 2001. Instead, he said, he accepted the job out of "a sense of responsibility."

He was an odd fit, a committed environmentalist at a Big Three automaker, an easygoing family guy and outdoorsman in an industry known for hard-charging, traditionalist CEOs. Ford made it clear from the start that he wanted to produce more environmentally friendly hybrids and even hydrogen-powered cars. But then he continued to rely on fat profit margins from SUVs.

In the process, he lost a good deal of his early support from environmental groups. "He's been both a hope and a disappointment," said Dan Becker, head of the global-warming program at the Sierra Club. "He's a hope because he keeps saying the right things. He's a disappointment because he hasn't been able to deliver them yet."

Defenders say Ford has been hard at work since taking over as chairman, changing the company's culture from within and winning trust from the rank and file. He rebuilt the River Rouge plant in Dearborn, originally opened by his great-grandfather Henry Ford, and installed a grass-covered roof and other "sustainable design" elements. When a powerful explosion ripped through the plant in 1999, Ford rushed to the scene and spent days with family members of the dead and wounded.

Plan ‘five years late’
Like his great-grandfather, Bill Ford would show up at plants and talk to workers about their jobs. Such moves earned him worker loyalty but, critics say, also made it harder for him to make painful job cuts. Ford Motor continued to lose market share in North America. Top executives began to leave, and others resisted the move toward as-yet-unprofitable hybrids. Bond-rating companies cut their outlook on Ford's debt. The stock tanked. And it all led to yesterday. "This plan is five years late," said automotive analyst Spinella. "But I guess it's better late than never."

Staff writers Sholnn Freeman and Amy Joyce and staff researcher Richard Drezen contributed to this report.