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100 Years of Ford: The Family, New generation rallies to put a Ford back at top

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#1 ·
CEO Bill Jr. takes control at critical juncture

By Mark Truby and Bill Vlasic / The Detroit News

DEARBORN -- They gathered on a fall weekend in early October 2001, more than 30 members of an extended family facing a critical point in their history.

The Fords, heirs to the automotive dynasty, had met regularly for 15 years at the company founded by Henry Ford nearly a century before. But this time was different.

It was time for one of their own, 44-year-old Ford Motor Co. Chairman Bill Ford Jr., to save the company that gave them immense wealth and immeasurable pride.

When Bill Jr. addressed the group -- his parents, sisters, in-laws and cousins -- the message could not have been clearer. Ford was in deep trouble, and he was ready to move.

The response was unanimous. The family stood united behind him.

"We didn't like what was going on at all," said Anne Ford, Bill Jr.'s cousin and daughter of the last family leader, Henry II. "Something needed to be done."

Three weeks later, Bill Jr. summoned Ford CEO Jacques Nasser to his 12th-floor corner office at Ford headquarters and fired him, ending one of the most tumultuous periods in Ford's storied history.

After 22 years and five outsiders as chief executive, a Ford was in the driver's seat again at the world's second-biggest automaker.

While employees, shareholders and dealers cheered Bill Jr.'s ascension to the top, nobody was more relieved than the family whose name defines an industry that changed the American way of life.

Together, they control 40 percent of the voting power in a $163 billion global automotive Goliath and own company stock worth at least $1.3 billion. Other fabled business dynasties -- the du Ponts, Rockefellers and Firestones -- have faded away, but the Fords have marched in lockstep through generations.


"There's such tremendous pride in the company," Bill Jr. said. "That's the glue that has kept us together."

But even with a Ford at the helm now, maintaining family power indefinitely will be a titanic task.

If Bill Jr. fails to engineer a comeback, Wall Street could sour on the family's leadership. And down the road, complex inheritance-tax issues and the growing number of heirs could disrupt the family's singleness of purpose.

"It won't be easy for them to maintain cohesion," said Bob Casey, the longtime historian at the Henry Ford Museum. "They are a family, after all. The stakes are just a whole lot higher for them."

The family will convene again later this month, but this occasion will be cause for celebration.

Amid the gala events commemorating Ford's 100-year anniversary on June 16, the far-flung descendants of Henry Ford will bask in the glow of an industrial icon. They'll come from the stately estates of Grosse Pointe, and from homes in New York, Connecticut, Florida and California.

"I heard that 100 percent are expected for the centennial," said Edsel Ford II, a Ford director and retired company vice president.

And above all else, the Fords believe in -- and depend on -- unity.

"The family has the greatest loyalty to the business that you could ever imagine," said Philip Caldwell, Henry II's successor as CEO in 1979. "It's deeper than tradition."

Henry Ford II's death leaves gap

It was the darkest day that many Fords can remember -- the death on Sept. 29, 1987, of Henry Ford II, the patriarch and guiding force of the Ford Motor Co. for four decades.

He had retired as CEO eight years earlier but still loomed large over the company. The family had control of Ford through the special 40 percent voting power of its Class B stock, but it had lost its rudder.

Speculation began immediately on Wall Street, in the media and throughout the industry. Was there another Ford in the automaker's future?

Henry II's brother, Bill Ford Sr., became vice chairman in 1980, but displayed no ambition beyond that. Attention shifted to the next generation, the 13 cousins who were the great-grandchildren of Henry Ford.

Three of the founder's great-grandsons already were working for Ford, and a fourth wanted a voice in management as well.

The oldest, Walter Ford III, worked in marketing, but would become better known for his dashing lifestyle and two messy divorces than his accomplishments at Ford.

Henry II's only son, Edsel II, was on a much faster track as general sales manager of Ford's Lincoln-Mercury division. His cousin, Bill Jr., had just been named head of Ford of Switzerland, and harbored grander ambitions.

The fourth cousin, Benson Ford Jr., was the black sheep of the clan. When his father, Benson Sr., died in 1978, he scandalized the family by suing to control the estate. "I have money," he said in court. "I want to participate in the affairs of Ford Motor Co."

The fifth of Henry's great-grandsons, Alfred Ford, was not a factor. On a vacation in Hawaii, he joined the Hare Krishna movement and took the Hindu name Ambarish Das. Then he moved to San Francisco, far away from the demands of being a Ford.

"Nobody knows me as a Ford here," he said at the time. "I don't feel I'm strong enough to live in Detroit and be the spiritual person I want to be."

The eight women among the fourth generation had no illusions of scaling the corporate ladder at Ford. One married and bought a winery in upstate New York. Another became a teacher and wed an investment banker.

Charlotte Ford, Henry II's oldest daughter, summed up the gender gap:

"I have no desire to be on the board of Ford Motor Co.," Charlotte, a Detroit debutante turned New York socialite, said in 1978. "Anyway, I was born a girl and that takes care of that."

Outsiders keep control for 22 years

By the time of Henry II's death, management of the company was firmly in the hands of career Ford executives. Caldwell had been succeeded as CEO by Donald Petersen, a hard-charging product specialist who was leading Ford to record profits.

In 1988, Petersen acceded to Henry II's long-stated desire to have Edsel II and Bill Jr. join the board of directors, but denied the young Fords spots on any board committees.

Quietly, the family coalesced. They began holding regular meetings, rallying around Bill Sr. and their two hopes for the future -- Edsel II and Bill Jr.

Together, they put a stop to the sale by some family members of the priceless Class B shares. A trust was formed to vote the majority of the shares, with Bill Sr., and later Bill Jr. and Edsel II, serving as the key trustees.

Whether management wanted their involvement or not, the family was determined to protect its enormous interest in the business.

"The family has always voted together," Bill Jr. said. "I can't imagine where that wouldn't be the case."

Bill Ford Jr. starts climbing

With Ford cruising along with robust sales and profits in the 1990s, the family had little incentive to rock the boat. But in 1995, a seemingly obscure event changed the course of the company.

Soft-spoken and diplomatic, Bill Sr. had proved to be a stabilizing force both in the family and on the board of directors. However, in a critical passage of power, he gave up the chairmanship of the board's influential finance committee.

His replacement: Bill Jr., who resigned as a full-time Ford employee. Two years later, he broadened his power base by adding a committee post overseeing environmental and public policy issues.

"It was a real change in the representation of the family, a generational change from Bill Sr. to Bill Jr.," said Allan Gilmour, Ford's current vice chairman.

Bright, personable and politically savvy, Bill Jr. had emerged as the favorite to one day run Ford. All doubt was removed when Edsel II, then president of Ford's credit arm, retired in 1998 after 24 years with the company.

The stage was set for Bill Jr. to make his mark.

Standing in his way, though, was the latest professional manager to serve as Ford chairman and CEO -- Alex Trotman.

When the board discussed succession plans, Trotman boldly opposed Bill Jr.'s desire to serve as nonexecutive chairman.

In one meeting, Trotman proclaimed that there was no place for "royalty" at Ford.

Bill Jr. didn't back down, and shot back a retort at the Scottish-born Trotman, who had been knighted by the Queen of England.

"That's easy for you to say, Sir Alex," he said.

Trotman's dismissive attitude incensed Ford family members. At that point, they put their muscle squarely behind Bill Jr.

"We really pushed for Bill to become chairman," said his cousin, Charlotte. "Everybody wanted it. It was just how it could be done."

Bill Jr., Nasser team up at top

Major changes were at hand. Ford's outside directors grilled Bill Jr. on his goals and vision for the company. When the smoke cleared, the board elected Bill Jr. as chairman and Jacques Nasser, head of worldwide automotive operations, as CEO.

They made an odd couple. Born in Lebanon, raised in Australia and a veteran of Ford postings around the world, Nasser epitomized the globe-trotting CEO armed with loads of operating experience.

Bill Jr. came from a different world. A Grosse Pointe-raised blue blood and avowed environmentalist, the blue-eyed, boyish Bill Jr. was a fresh, if untested, force in the executive suite.

Together he and Nasser vowed to lead Ford into the 21st century.

The odd man out was Edsel II. Bill Jr. downplays the idea that he beat out his cousin to win the chairmanship.

"The truth is there wasn't a runoff between Edsel and I," Bill Jr. said. "That would have been something the family would not have wanted. It would have been divisive."

Historian Doug Brinkley, who researched Ford for five years for a new book on the company, "Wheels for the World," said the family turned to Bill Jr. to guard its interests.

"The feeling was that Bill was willing to deal in a cutthroat business manner and would better protect the family's 40 percent stake," Brinkley said.

Edsel II, for his part, won't entertain any notion that he lost a power struggle. "Bill," he said, "was the right person at the right time."

Company plummets under Nasser reign

The tandem of Bill Jr. and Nasser hit the ground running: buying European luxury brands Land Rover and Volvo and launching an all-out push to transform Ford into a diversified consumer company.

But in August 2000, the first Firestone tire recall stopped Ford's momentum dead. The following year was a nightmare -- employee lawsuits charging age discrimination, anger among dealers opposed to Nasser's policies, poor product quality and evaporating profits.

Now on the inside, Bill Jr. still wasn't sure he had a true grasp of the company. By early 2001, he was questioning if the dynamic, but polarizing, Nasser could manage Ford out of its downward spiral.

Nasser has declined comment on Ford matters since his firing. But, according to current and former Ford executives, Bill Jr. pushed hard for more day-to-day involvement in operations.

In July 2001, the board established the "office of chairman and chief executive" to give Bill Jr. more hands-on input. By then, the company was careening over a cliff.

Family members grew increasingly worried by the frightening turn of events. In family meetings, the tension ratcheted up with every new revelation of Ford's festering troubles.

"We saw what was happening to the company and we didn't like it at all," Charlotte said. "We were ready (for Bill to become CEO) whenever he decided it was appropriate."

In late October, with Nasser attending the Tokyo Motor Show, Bill Jr. quietly held discussions with board members about forcing Nasser out. Irv Hockaday, the retired chairman of Hallmark Cards Inc., and Carl Reichardt, former head of Wells Fargo & Co., helped him build consensus among other outside directors.

At least one family member, Henry II's daughter Anne, personally contacted directors to express her hope that Bill Jr. step in as CEO.

"I called board members to support Bill," she said. "I lobbied for Bill. We were all behind Bill, but the board had to make the decision."

She emphasized that the family never raised the issue of its 40-percent voting bloc to sway the board.

"We have a controlling interest but we didn't try to use that," she said. "Not to say we won't in the future."

It wasn't necessary. The board could not live any longer with Nasser, either. The mantle of leadership, once passed on from Henry Ford to Henry II, fell squarely on the shoulders of Bill Jr.

Keeping control won't be easy

Power has returned to the family. But can it remain there in the decades to come?

A difficult test will come upon the deaths of Bill Sr., 78, and his 79-year-old sister, Josephine.

They own a combined 28.3 million shares of Class B stock, or 40 percent of the total. Under current law, their inheritance taxes could run into the hundreds of millions of dollars.

Bill Jr. said a special stock fund should help their estates handle a huge tax hit. If the family was forced to sell too many of its Class B shares, its powerful voting stake would vanish.

That's a bridge the Fords hope never to cross.

"Before it got to that point, the family would probably go and seek out a buyer rather than just everybody dumping shares on the open market," Bill Jr. said.

Selling out, however, is not even discussed by the family. "Frankly, we are about 180 degrees from that," he said.

A trickier issue is what happens with the fifth generation of Fords. They number at least 34 and range from elementary school students to adults in their late 30s.

If the dynasty is to survive, some will have to take a role in Ford affairs. So far, only Charlotte's daughter, Elena, has decided to make a career at Ford.

She hopes that others will gravitate to the family business.

"This is not just for us, it's for our grandchildren and our grandchildren's children," said Elena, a mother of four children and an executive in Ford's international operations. "We have to deliver the future."

Edsel II has four sons, the oldest of whom is Henry III, a recent college graduate. Would he be pleased to see his sons join the company?

"The more members of the family working for Ford Motor Co., the better," said Edsel II. "As long as they work hard."

The corporate life is not meant for everybody, said Alessandro Uzielli, Anne's son. He spent six months at Ford of Europe before choosing to produce films in Hollywood. His second movie, the 1998 comedy "Bongwater," was a minor cult hit, and he is now reopening the storied La Dolce Vita restaurant in Beverly Hills.

Being a Ford heir can have its downside in L.A. business circles. "People try to take advantage of you," he said.

Yet even as he pursues another career path, he realizes the bigger responsibility facing all the Fords in the future.

"It is all of our intent to keep things as they are," he said, "for as long as we can."

(Photo)With the support of his family, including father Bill Ford Sr., Bill Ford Jr. took over the company's top job after 22 years of non-family CEOs. The fourth generation of Fords now has a firm hand on the automaker's future
 

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#2 ·
The Fords in 2002. Front, from left: Bill Ford Jr., Lynn Alandt, Martha Parke Firestone Ford, William Clay Ford, Charlotte Ford, Edsel B. Ford II. Second row, from left: Eleanor Bourke, Paul Alandt, Alfred Brush Ford, Martha Morse, Cynthia Ford, Josephine Ingle, Sheila Hamp, Steve Hamp, Anne Ford. Third row, from left: Francee Ford, Benson Ford Jr., Lindsey Ford Buhl, Jason Ingle, Avery Bourke, Elena Ford. Back row, from left: Alessandro Uzielli, David Buhl, Eleanor Ford, Joe Rippolone.
 

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#3 ·
Elena Ford, meeting with colleague Harry Jones in her office at Ford's World Headquarters, is so far the only one of the fifth generation to take an active role at the automaker. An executive in the company's international operations, she hopes the family will remain involved with Ford for generations to come.
 

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#4 ·
Three generations of Fords -- from left, Henry Ford II, then 21, grandfather Henry Ford and father Edsel Ford, then Ford president -- gather in 1939 at the World's Fair in New York City. Edsel Ford was the company founder's only child.
 

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#5 ·
Descendants exert influence
Anne and Charlotte, the oldest children of Henry Ford II, strongly backed efforts to put cousin Bill Ford Jr. in control of the automaker. Henry Ford II's son Edsel II, a director, was once considered a candidate for the top job.
 

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#6 ·
The third generation of Ford men -- Benson, left, Henry Ford II, standing, and William Clay Ford shown in 1953 -- were heavily involved in the company.
 

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Charlotte Ford, second from right after a recent speech at the Detroit Athletic Club before the Women's Economic Club of Detroit, said the family was concerned about mounting problems at Ford under former CEO Jacques Nasser.
 

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Edsel B. Ford II was long considered his father's successor to the Ford Motor Co. throne. But, Edsel says, "Bill was the right person at the right time." Edsel retired from the company in 1998 and still serves as a director.
 

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Anne Ford's son, Alessandro Uzielli, in his L.A. restaurant, worked briefly at Ford before moving to Hollywood to produce films. He says he and the family feel responsible for "keeping things as they are, for as long as we can."
 

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