Trouble in the House of Ford
One of Henry II's attackers teams with a nephew
For 34 years Henry Ford II has been the driving force behind the Ford Motor Co. Since he took control of the then ailing corporation as a young man in the 1940s, he has devoted his prodigious energies to helping build Ford into a worldwide auto empire with 495,000 employees and annual sales of $43 billion. Now, at 61, as he prepares to step aside as chief executive, he is finding himself embroiled in a series of bitter legal skirmishes.
One cause of Ford's difficulties is Roy Cohn, the Manhattan lawyer. Since his days as a get-the-dirt investigator for Senator Joseph McCarthy, Cohn has built a deserved reputation as a maverick who relishes the pursuit of the powerful and is as ready to do his pursuing in newsprint as in the courts. For about a year, Cohn has been pressing a suit charging the motor company's boss with a variety of improprieties and seeking a still undetermined amount in damages. Last week Cohn got an assist from a fairly surprising quarter: Henry Ford's nephew. Benson Ford Jr., 29, who is already involved in a legal battle to gain control of a $7.5 million inheritance, including roughly $6 million in Ford stock, announced that he was planning several suits against Ford officials. His choice of counsel: Roy Cohn. The lawyer describes his new client as yet another stockholder "who wants to end the autocratic regime" at Ford.
Cohn denies that he has any personal dislike of the company's chairman, but readily admits that "I'm anti-Establishment when it comes to people like Ford." With his great power, Cohn says, Henry Ford "represents an era of American business that supposedly went out of style with the turn of the century." Cohn's suit was brought on behalf of a handful of stockholders. The suit charges, among other things, that Henry Ford, who scarcely needs money: 1) pocketed $2 million from the "highest officials of the Philippines government" in exchange for building a stamping plant in the islands; and 2) took $750,000 from Canteen Corp. in return for a food concession at Ford plants.
Ford has vehemently denied all the charges, and the suit has had little visible support from the firm's other 335,400 stockholders. At the annual meeting last year, Cohn attempted to shout accusations at Ford, but was frequently booed by other shareholders, many of them present or former company employees.
Last month the appellate division of the New York State Supreme Court threw out Cohn's suit, saying that it should have been brought in Michigan, where the company is headquartered. Cohn, who vows to pursue the suit, is pondering whether to appeal the decision. Mean while, he has been trying to keep the case alive in the press.
Last week, after lunching with Cohn and Benson Ford, New York Times Columnist William Safire wrote a savory story. He reported that New York Governor Hugh Carey, the longtime suitor of Ford's daughter Anne, had prevailed on Frank Sinatra to meet with Ford. Safire speculated broadly that Ford hoped that Sinatra's gangland contacts would get to Cohn's underworld law clients and persuade the lawyer to lay off. The column raised such a furor that Safire rather grudgingly wrote another piece reporting the many disclaimers.
On top of all this, the Department of Justice is looking into Securities and Exchange Commission charges that Ford Motor paid a $1 million bribe to an Indonesian general to get a contract to build a $29 million satellite communications ground network in his country. What is clear so far is that some Ford people did agree to make the bribe but, according to company lawyers, the offer was withdrawn. The key question is whether Henry Ford knew anything about the bribery plan.
Benson's suit is another nettle in the chairman's side. Benson, or Ben as he is called, has lived in California since 1969 and has devoted himself to racing cars and running an auto parts business. In January he was arrested in San Francisco on charges of possessing 9.5 gm of hashish and less than two grams of cocaine. Ben owns and controls about 2% of the company's Class B voting stock, worth some $12 million (Henry Ford has 8.6%, worth more than $50 million). The B shares are entirely controlled by the Ford family and permanently account for 40% of the total stockholder vote. When Ben reaches 30 in October, he will come into another 2% or so of the stock.
He is suing to reopen the will of his father, Benson Sr., who was Henry's brother. Benson Sr. died last July, leaving his son yet another 1% of the B stock. What bothers Ben is that control of the stock, along with some other money, will be given to a trusteeship. Ben's mother is the sole trustee, but she is obligated to name another trustee--and not Benson--before she dies. If she does not, the trusteeship would go first to Henry Ford and, after him, to another uncle, William Clay Ford. Benson also wants the seat that his father occupied on the Ford board and would eventually like to be considered for the chairmanship. That runs counter to Henry's plans. Since he suffered an angina attack three years ago, the chairman has been concentrating on setting up a succession of his own choosing. Henry would prefer that his only son, Edsel, eventually take over as chief executive.
These distractions at the top come at a sensitive time for the company. Like all automakers, Ford is facing challenges. It will need as much singleminded managerial skill as it can muster to meet proliferating federal regulations and increased competition at home and abroad. It could well be that such considerations were weighing on Henry Ford's mind when he decided to get out of the way and step down before January, a year ahead of his original schedule.
This file is automatically generated by a robot program, so viewer discretion is required.