PHOTO: Henry and Clara Ford,1943
COVER IMAGE: Chairman Ford
William Clay Ford Jr. is fuming. The Detroit Lions, the football team he
manages and co-owns with his dad, have just suffered a heartbReaking overtime loss to the
Cincinnati Bengals--the second straight loss of the season. Disheveled and hoarse, he
strides into the locker room and kicks a chair in disgust. ``I'm sick of losing,'' he
grumbles. ``I hate this.'' But as sportswriters gather around him, he cools off, praises
his coaching staff, and says only they will decide whether to bench quarterback Scott
Mitchell for throwing two critical interceptions. ``It's not all Scott's fault today,'' he
says of the 34-28 loss.
Bill Ford Jr. is about to have a lot bigger problems than interceptions to worry about. On Sept. 9, he waS named to succeed Ford Motor Co.'s Alexander J. Trotman as chairman of the automotive giant founded by his great-grandfather Henry Ford nearly a century ago. Running a football team, of course, is small potatoes compared with overseeing the world's second-largest carmaker. But the chair-kicking episode gives a glimmer of what Chairman Ford will be like.
STRONG HAND. Known for his cordial, gentlemanly manner, the
41-year-old Ford is nevertheless a demanding boss. As soon as Bill Jr. was given more
control over the Lions in 1996, he wasted little time firing Coach Wayne Fontes after a
string of disappointing seasons. And, diplomatic comments to sportswriters aside, in
private Ford makes clear he means to get to the bottom of the latest defeat. ``I'd like to
talk to Scott to find out what happened on those last two interceptions,'' says a now-calm
Football may be Bill Ford Jr.'s passion, but the automobile industry is in
his blood. As heir to a family dynasty that still controls 40% of Ford Motor, Bill Jr.'s
life has been wrapped up in the car company's fortunes from the moment he was born.
Perhaps more than any other American family--and despite its oft-noted propensity for
scandal, intrigue, and alcoholism--the Ford family has managed to keep a strong hand in
the business from one generation to the next. If ever a family ranked among the
aristocracy of American business, it is the Fords.
Now, it falls to Bill Jr. to carry the torch. The first Ford to hold the
chairman's post since his uncle Henry Ford II stepped down in 1980, Bill Jr. has held a
succession of jobs since he joined the company straight out of college in 1979. From a
low-level financial analyst to a vice-president for truck development, he has worked--if
only briefly--in nearly every corner of the company as he moved through a career path
clearly designed as an apprenticeship for a chairman-in-training. Now Ford, who has
emerged as a force on the Ford Motor board in recent years, vows to lead and direct an
industrial giant and its 363,892 employees.
Bill Jr. won't be running the $154 billion carmaker alone. In an unusual
power-sharing arrangement, Jacques A. Nasser, 50, the company's hard-driving automotive
president, will become CEO on Jan. 1--at the same time Ford takes over as chairman. The
pair are inheriting their jobs from Trotman, 65, who is leaving a year earlier than
planned. With his job largely done, Trotman says he's ready to step down. His global
reorganization has paid off, making Ford the world's most profitable carmaker.
The new duo aims to keep it that way. Nasser, the scrappy, hard-nosed
cost-cutter who is widely credited with Ford's turnaround, will run day-to-day operations.
Although Bill Jr.'s task of setting long-term strategy is harder to define, he insists
he'll be no mere figurehead. Every working day, he will be at company headquarters in
Dearborn, Mich., he says, sitting at the massive burled-walnut desk that belonged to his
grandfather, Edsel B. Ford. Nasser will sit in an adjoining office.
Both insist they will get along fine. The pair go back a ways. When, in
1984, Bill Ford reported to Nasser, ``one of his first requests was: `Don't treat me any
differently,''' Nasser says. ``And I didn't.'' Today, ``Bill leads the board, and my job
is to run the company.''
Fellow board members say Ford earned the top job in the past three years
through his forceful performance as chairman of the board's powerful finance committee,
which controls the company's $22 billion cash reserves. Director Carl E. Reichardt, former
chairman and CEO of Wells Fargo & Co., says that when Ford first joined the board, at
30, in 1988, he went through a ``quiet period'' while he learned and matured. But now his
words carry weight. ``When he speaks, people listen,'' says Reichardt. ``He's no clerk.
He's a thoughtful, well-educated young man who doesn't wear his stripes on his sleeve.''
Indeed, signs of the new chairman's influence are already evident. Board
insiders say he played a key role in Ford's recent decision to back out of the bidding for
Korea's insolvent Kia Motors. Worried because the deal would have required taking on Kia's
massive $7 billion debt, Ford pushed fellow directors to walk away. ``I'm not the shy,
retiring type,'' says Ford.
With the Kia deal off, Ford's immediate and most important job is figuring
out what to do with all that cash. Ford says he's still shopping for a global auto
business--but nothing as big as the pending marriage between Daimler-Benz and Chrysler
Corp. ``Ford has enough products and global breadth that we don't need to rush into
anybody's arms,'' he says.
Wall Street is watching closely. Stephen J. Girsky, a Morgan Stanley Dean
Witter analyst, figures Ford has four choices: a stock buyback, a dividend increase, an
acquisition, or an investment in the company's dealer network. Ford has ``a lot of extra
cash burning a hole in their pocket,'' says Girsky. ``How they use it will tell us a
``JAC THE KNIFE.'' Even more revealing will be how Ford and Nasser
respond to another imminent problem: Japanese sport-utility vehicles such as the popular
Lexus RX300 are beginning to threaten Ford's fat profits. Analysts say nearly half of
Ford's annual $6.9 billion 1997 profits came from hot-selling sport-utilities such as the
Ford Expedition. ``You can't prevent others from encroaching on the parade,'' says Ford.
``We just have to keep pushing and coming out with excellent products.''
In the meantime, Bill Ford will serve as Ford's link to Wall Street and
other large investors, whom he intends to meet with regularly. And he will make a point of
walking the hallways at Ford to keep a finger on the pulse of middle management. ``I never
want to be sitting in a plush office with the door closed and not out seeing people,''
Ultimately, Ford's success may rest on his ability to manage one man:
partner Jacques Nasser. As Ford's automotive president since October, 1996, the
blunt-talking Australian has transformed Ford from struggling with the worst profit
margins in the business to scoring record earnings last year--surpassing General Motors
CHART: Ford vs. GM: And the Winner Is...
Nasser has slashed $4.3 billion in costs in the past 18 months--thus
living up to his nickname, ``Jac the Knife''--and this fall he will show a further 10% of
Ford's 53,000 salaried staff the door. Nasser also has a flair for car design and has
reinvigorated Ford's overseas operations. ``Jac's been the catalyst,'' says Lehman
Brothers auto analyst Joseph S. Phillippi, who believes keeping Nasser is crucial. ``Jac's
the general,'' he says.
Both executives are opinionated and strong-willed, and they admit they
have differences. For example, Nasser doesn't believe he will live to see the death of the
internal combustion engine, while Ford believes he will. ``If we agreed on every single
issue, then we wouldn't be getting the benefit of his perspective and my perspective,''
says Nasser. Adds Ford: ``We'll thrash out our differences thoroughly, but behind closed
Still, one large Ford investor sees problems ahead if either one strays
onto the other's turf. ``If Jac does a bang-up job by hitting on all cylinders, it is
going to be hard for Bill Ford to do more than run the board, make management hires, and
run the Lions,'' the investor says. On the other hand, ``if Bill starts to get in Jac's
way, then guys like GM will probably be lining up to say, `Jac, why don't you come over
and work for us--and be chairman.'''
Indeed, the two-for-the-road power-sharing arrangement has a history of
failure at Ford. Billy's uncle, the imperious Henry Ford II, ran Ford with an iron fist
for 35 years and was legendary for clashes with his managers. Most famously, he fired Lee
A. Iacocca in 1978 rather than entrust him with the family legacy. And he frustrated his
brother William Clay Ford Sr., Bill's father, now 73, at every turn.
Unquestionably, Bill Ford's appointment to the chairman's job is a
victory--and vindication--for both Bill Ford and his father. Bill Jr. now becomes the
steward of the Ford clan's considerable fortune, estimated to be worth more than $5
billion. Much of that fortune--about $2 billion--is held by his branch of the family.
``The family has more at stake in the welfare of the company than anyone else,'' explains
Bill Sr., the last surviving grandson of Henry Ford. ``This ensures that the company won't
go off and do something screwy.''
Henry Ford, though, just might have found his great-grandson, Bill, a tad
peculiar if the two had ever met. Despite his lineage, Bill Jr. is nothing like the
old-model auto baron. Rather, he is a New Age industrialist. He calls himself a
``passionate'' environmentalist, who wants to make green policies as integral a part of
Ford as is quality. ``For us to succeed, we have to be seen as an environmental company,''
he says. That's why he's so convinced he'll see the demise of the internal-combustion
engine. ``Someday, it will be gone,'' he says, replaced by electric cars powered by fuel
cells or some other kind of clean fuel.
Ford also has some awfully high-minded notions for his company's future.
Profits are important, but ``a great company goes beyond that and makes the world a better
place,'' he insists. He envisions a modern-era version of his great-grandfather's legacy
of social engineering: He hopes to use Ford's financial and social clout to educate the
poor and help clean up the environment. Already, he has been instrumental in Ford's
financing the construction of 100 kindergartens and elementary schools in Mexico. Ford
insists his views make good business sense. ``I'm not going to be some madman running
around with an open checkbook,'' he insists. ``There's no incompatibility between doing
the right thing and making money.''
Still, Bill Ford knows as well as anyone else that his company's profits
come largely from sales of outsize pickup trucks and sport-utes such as the giant Lincoln
Navigator--autos that have been widely criticized as gas-guzzling polluters. And with
Nasser's strong presence a comforting counterweight, Wall Street isn't yet overly
concerned about Ford's social agenda. ``At the end of the day, we want the stock to go up
and Bill Jr. wants the stock to go up,'' says analyst Girsky.
DRIVING A SEMI. Within the company, Ford's wide-eyed enthusiasm and
boyish looks led to resentment as he climbed the corporate ladder. And some executives at
the auto maker wonder whether Bill Jr. has really paid his dues. Others disagree. Ally and
adviser Peter J. Pestillo, Ford executive vice-president for corporate relations, says:
``Whatever advantages he has as a member of the family he paid for dearly.''
Ford is sensitive to being thought a dilettante. A few years back, he
asked people to stop calling him Billy, his childhood nickname. And he has often gone the
extra mile to compensate for his lineage. In 1989, when given a mundane assignment in
heavy-truck engineering, Ford went to driving school and got a license to drive big
18-wheelers. His final exam required him to haul a load round-trip from Detroit to Toledo.
``I recognize that there are those who think this job was handed to me,'' he says. ``But I
was under the microscope every step of the way. I had to have drive and ambition because
people were looking for me to fail.''
Despite Ford's privileged background--or maybe because of it--he developed
into a ferocious competitor. On fishing trips with his three closest friends, Ford usually
bags the biggest catch. ``I define a good day of fishing as just being there,'' says Steve
Hamp, Bill Jr.'s brother-in-law and a fishing buddy. ``His definition is being there but
also producing. He's always got a couple of buckets that he's trying to fill.''
His competitive streak was nurtured growing up in a branch of the Ford
family that made few headlines. In contrast to the fractured home life that many of his
cousins endured, Bill and his three sisters thrived in their quiet, unremarkable
household, bringing home good grades and earning laurels in sports. Their parents, Bill
Sr. and Martha Firestone Ford, the tire heiress, tried to create as normal a world as
possible given their family name and huge wealth. The family had no bodyguards or
chauffeurs. Bill's mom made sure to drive him across town so he could play hockey with
kids from far more modest backgrounds. Recalls teammate Ed Sadorski Jr., who played with
him when both were teens: ``He didn't shy away from the rough-and-tumble stuff.''
Those games stood Bill in good stead later when he went away to the
Hotchkiss School in Lakeville, Conn. Childhood pal Stephen Phinny remembers him as a
terror on the soccer field who held his own in the raucous fights that broke out between
rival prep schools. Bill got another lesson in toughing it out by watching his dad's
football team lose year after year. The Detroit Lions, in fact, have not won a
championship in the 34 years Bill Sr. has owned the team. After every Lions loss, young
Bill listened to long-suffering fans howling at his father on sports radio. ``It hurt, and
I hated it,'' he says.
But it was the classroom, not the playing field, that counted most in the
family, and Bill Jr. excelled there, too. At Princeton University, where he met his wife,
Lisa Vanderzee, he majored in political science, writing his senior thesis on Ford's labor
relations. In 1983, four years after joining the company, he took time off to earn a
masters in management at Massachusetts Institute of Technology. Bill also read deeply
about environmental issues. He studied the works of nature author Edward Abbey and read
Rachel Carson's seminal work, Silent Spring. As a teenager, he began volunteering on
clean-water projects and became involved in Earth Day. ``It struck a chord with me very
young,'' he says.
Ford breezed through 11 jobs in his first decade at the auto maker as his
father worked behind the scenes to make sure his son was getting the seasoning to lead
Ford someday. Pestillo recalls that Bill Ford Sr. approached him in 1982 and asked that he
put then 25-year-old Bill on Ford's bargaining team in talks with the United Auto Workers.
``Bill Sr. had been on Ford's 1949 bargaining team and thought it was a great
experience,'' says Pestillo. ``He felt that if you are going to lead the company, you have
to understand labor relations.''
The only operation Bill ever ran at Ford was the company's tiny Swiss
business. To test his mettle, Pestillo sent him there in 1987 to fix Ford's struggling
operations. Bill Jr. did turn the unit around, boosting profits and putting Ford's top
local dealer out of business because of poor performance.
GRIEVANCES AIRED. Back home, though, he soon encountered rough going.
Donald Petersen, who was then chairman, marginalized him and his cousin Edsel Ford II,
then 39, after they were named to the board in 1988. Petersen refused the ``Ford Boys''
committee assignments. ``We felt penalized for our last names,'' Bill recalls. After Edsel
and Bill went public with their unhappiness, Petersen relented and allowed them a more
influential role. Following the family dustup, Petersen retired early, in 1990.
The two cousins were already viewed as rivals for the top job. As Henry
II's son and the eldest male of the fourth generation, Edsel, 49, was long thought to be
the favorite. But Bill's rise was assured when in 1995 he took the chairmanship of the
board's powerful finance committee, a post created by Henry II to assure the family
complete control of the company's purse strings. Meanwhile, Edsel is said to have clashed
with Alex Trotman, and his advancement in the company stalled.
Edsel retired in April after 25 years at the company, the last seven years
as president of Ford's auto-lending unit, Ford Credit. Now the new chairman would like him
to return. ``The door is open,'' says Bill Jr. ``I'm going to plead with him to get as
involved as he wants.'' Edsel appears interested. ``I'm glad he said that because he knows
how much the company means to me,'' responds Edsel. ``When the time is right, I'll sit
down and discuss'' it with Bill Jr.
The family can continue to exert absolute power at Ford because they
stacked the deck in their favor when they took the auto maker public in 1956. Henry Ford
II and his three siblings established a special ``class B'' stock that only family members
can hold. One class B share's financial value is equal to a share of Ford common
stock--but it has eight times the voting rights. Today, the Fords own 72 million class B
shares. Bill Sr. and Bill Jr. together control more than 26% of the class B shares, worth
$871 million. They also hold two of the family's three seats on the company's 11-member
Indeed, the Fords have avoided the erosion of fortune that has splintered
other dynasties. They have amassed a purchase fund, and they acquire Ford common stock to
trade with family members who need to liquidate class B shares for estate taxes or other
expenses. That's why Bill Jr. says the family is not worried about losing its voting
power. ``People in our family are buyers, not sellers,'' he says. What's more, the 13
cousins in Bill Jr.'s fourth generation meet twice a year to review the family holdings.
And a special voting trust has been established by the family so they can vote their
shares in lockstep. ``We're a very cohesive family,'' says Bill Jr. ``There's a great
sense of tradition and responsibility in this family.''
CHILDREN FIRST. Recently, Bill Jr. has emerged to join older cousins
Edsel and Charlotte Ford as leaders of the fourth generation, says brother-in-law Hamp.
``Bill, Edsel, and Charlotte have worked hard to develop a sense of unity and keep the
group focused,'' says Hamp, president of the Edison Institute. And Bill plays a special
role in family meetings: ``He's a lot of fun, and he keeps things rolling,'' says Hamp.
Even with his heavy new burden of responsibility, Bill Jr. insists he will
keep balance in his life. He readily confesses that he would always ``rather be outside
than indoors.'' And he shares his love of nature with his wife and four young children. As
a family, they camp, hike, and ski whenever they can. Like his parents, Ford is immersed
in the lives of his two daughters and two sons, who range in age from 13 to 3. He coaches
their soccer teams and likes to clown around for their friends whenever they visit. ``My
children keep saying that all the kids in the neighborhood like to come to our house
because they find me entertaining,'' he says. ``We're rarely serious around our house.''
Like a true '90s dad, Bill Jr. vows that even the chairmanship of Ford Motor Co. won't
keep him from his children. ``I will never give up any involvement in their lives,'' he
Reluctantly, he's already had to cut down on his next greatest passion as
an adult: a Hemingwayesque obsession with fly-fishing. Every chance he gets, Ford travels
the world in search of the perfect fishing hole. He even co-owns a fly-rod company. A few
years ago, he and his friends found themselves in the Amazon casting for peacock bass and
catching a few piranhas. Eventually, they were chased from their paradise by torrential
rains and a pesky anaconda that attacked one of their guides. Recalls longtime friend
Ralph Booth: ``We made a mutual decision: We've caught enough fish. Let's get out of
Ford also dabbles in Eastern philosophy and reads Buddhist texts. A strict
vegetarian, Ford shuns alcohol and believes in the curative powers of alternative
medicine. ``I've seen an acupuncturist, an herbalist, and I do yoga,'' says Ford. He also
practices the martial art tae kwon do. ``I try not to drink,'' says Ford, whose fAther and
uncles were afflicted by alcoholism. ``My personalIty doesn't improve a lot when I
drink.'' That's not the only lesson he's drawn from the family history. ``Fame, fortune,
and power really hold no allure for me,'' he says. ``I grew up with them, and I've seen
them make so many people miserable. I know they don't bring happiness.''
Back on the sidelines, just before the Lions' crushing loss to Cincinnati, William Clay Ford Sr. talks of how proud he is that his son has reached the top in the family company. He once warned his son of the heartache Ford Motor Co. can give a family member. Now he just wants Bill Jr. to know that his old man is watching. ``Hopefully, he'll do a good job,'' chides Bill Sr. ``If he doesn't, I'll cut his allowance. He's too big to spank.'' But those who know Bill Jr. suspect he'll be the one to kick himself the hardest should he fumble in his bid to keep one of America's great industrial dynasties going for yet another generation.