The Rebel Driving Ford

By Frank Gibney Jr./Dearborn

William Clay Ford Jr. knows it would have been easier to take the money and run. He's a fourth-generation favored son of America's first industrial family, a clan so ludicrously wealthy the members have their own accounting firm to manage their allowances. Life could easily have been a dividend-enriched affair of multiple parties, multiple mansions and multiple marriages, the big challenges being to avoid alcoholism and choose the right charity boards.

Instead, Bill Ford insisted on having a career at the family shop, Ford Motor Co., which is far more complicated than you would think. Any number of times since the 1920s, the carmaker's professional managers have had to take the keys away from actual Fords before they did irreparable harm to the business. Ford, 44, became chairman in 1999 only after parrying the objection of his predecessor Alex Trotman, who didn't care to see another Ford in the driver's seat--particularly this one. "I was a heretic," Ford admits. "There were a lot of people saying, 'Let's hope he doesn't get too close to the real business.'"

Too late. Having grabbed the wheel, Ford the rich kid is driving Ford Motor down a radical path. A fiercely principled environmentalist and congenial company man, Ford is fomenting a revolution to transform the family firm--now a worldwide industrial monster with $170 billion in annual sales--into a corporation that cares as much for consumers and the air they breathe as it does for its bottom line. And he's doing it at a time when Ford Motor's image is suffering from allegations that its Explorer models had design flaws that contributed to the failure of their Firestone tires, which have been implicated in 174 road deaths.

Ford believes that by reconfiguring Ford Motor, he has a shot at rearranging the entire 21st century industrial landscape. "We have the ability to transform a great old-line company into a vital, global model of sustainable manufacturing," he said recently in his office, gazing over the sprawling River Rouge factory complex that his great-grandfather Henry established in 1917. "But we're on a continuum, and I don't know if we ever declare victory."

In a sense, what Ford proposes is Ford Motor's second revolution. Some of his ideals are eerily similar to those of his great-grandfather, an environmentalist and pre-eminent bird watcher who pioneered the assembly line, the service station and, above all, the then heretical notion of a working wage. (And yes, the founder was also an anti-Semite and a union-busting tyrant who spied on his workers.) Henry Ford reinvented manufacturing and changed the world. Bill Ford wants to go Henry one better by embracing the notion of sustainability, or the idea that you can make things without damaging people and planets. In Ford's case, this means creating worker-friendly, environmentally pure factories that make emissions-free cars. He hopes to kill off the carbon monoxide-spewing internal-combustion engine by the end of his reign.

"Bill family values," as they are called derisively by his detractors, don't absolve the company of decades of enthusiastic polluting, during which Ford Motor's top executives fought environmental regulators every step of the way. And Ford has been called a hypocrite for having benefited from this corporate behavior.

Yet the notion of the sustainable corporation is getting traction in the most unlikely places. Just three years ago, companies like Ford were members of the Global Climate Coalition, a U.S. business lobby that claimed the global-warming threat (and the Kyoto accord) was nonsense. On the heels of BPAmoco, Ford abandoned the coalition in 1999, and so have the likes of General Motors and DaimlerChrysler. Once renowned polluters like chemical giants Dupont and Dow are spending heavily on "green" solutions to business.

Ford is well aware that there is precious little hard evidence to date that being green brings in greenbacks. And sustainability will absolutely require profitability. "Can we do this and make money? We have to," challenges Ford. "Has it ever been done? No. But it hasn't been tried either."

Ford has two valuable assets in his quest to change history. One is that his name is on the door: his family supports him, and they still own 40% of the company's Class B voting stock. Last year the family got $150.5 million in dividends--a number that stays constant no matter where the share price is. No cranky cousins or siblings are going to fire Bill.

The second is that this board chairman doesn't actually run the company; he lets the hired help do that, although that's probably not how CEO Jacques Nasser views himself. When the board appointed Bill, it promoted Jac (as he is known), considered to be the industry's top executive, and encouraged the two men to work out a power-sharing arrangement. Ford oversees the board and the long-term direction of the company; Nasser is the boss who makes the day-to-day decisions. Admits Ford: "My role here probably has no parallel anywhere."

The rich kid from Grosse Pointe, Mich., and the working-class Lebanese kid from Melbourne, Australia, have laid out an interesting blueprint for change and done some things that would have been unthinkable just a few years ago. They have broken ranks with other U.S. automakers. Last summer, for instance, Nasser announced that fuel mileage for all Ford trucks would be increased 25%, or 5 m.p.g., by 2005 (it is now about 20.5), well ahead of the government mandate that the other big companies are following. And they have gone to great lengths to promote a corporate culture that, as Nasser says, "looks at itself every day through the eyes of the consumer."

At last year's annual meeting, Ford unveiled the company's first annual "corporate citizenship" report. Replete with self-criticisms of the company's reliance on huge, emissions-belching SUVs, the 98-page report drew a bewildering avalanche of press--from environmentalists who saw it as a triumph, and from hardened SUV and truck lovers who saw it as the pinnacle of hypocrisy. Was Ford just going to stop making the ground pounders that account for more than 50% of its revenues?

Ford's answer to that contradiction goes something like this: As long as customers want them, we will keep making SUVs, because if we don't, someone else will. We'll just keep making them cleaner and safer, and thus force every other auto company to do the same.

To understand that delicate and ambitious pursuit, you must enter the world of Bill and Jac--a relationship between two very different men half a generation apart. Simply speaking, Ford is the impassioned do-gooder, the green-tea-drinking fly-fisherman who has a hard time saying no to any worthy cause. Nasser is the corporate hardass who just as easily might have run the old, secretive Ford Motor and reveled in it. "When you look at how important openness has become for Ford [Motor], you have to remember that Bill has always been that way," says a longtime insider. "Jac supports it because he realizes it's good business."

From the minute they took office, rumors of discord between Jac and Bill have swept the hallways of headquarters in Dearborn, Mich. There has been talk of shouting matches between the rich brat and the corporate master. Nasser and Ford hate that and vehemently deny they have ever had a real falling out. "This company has always loved to form camps around its top players," says Ford. "We're trying to avoid that."

Their offices adjoin each other on the top floor of the company's green glass World Headquarters building, but one look at them gives away the stark differences between Ford and Nasser. Ford's is warm and wood paneled, plastered with pictures of his family and himself. Practically everything--except his grandfather Edsel's desk--is recyclable, and tropical fish swim in a tank on one wall.

Nasser's quarters are spartan, cool and movie-set corporate, his desk a black African-wengewood-and-brushed-chrome counter on a raised dais in front of a bank of computers and flat-screen televisions (all on, 24/7). He keeps his Blackberry communicator and a Nokia 8100 Worldphone at his fingertips, a slim purple Sony Vaio laptop at arm's reach.

One man is about deliberation, the other about speed. Nasser had to work hard and suffer the indignities of an immigrant growing up in Australia. A 30-year lifer who has run just about every Ford fief on the planet, he is a relentless taskmaster with a passion for machines, Savile Row suits and exquisite watches (he has 120 at last count). He lives the code of today's global corporate warrior, perpetually moving through time zones and making deals.

He was already moving when he took the CEO job, and within 18 months he acquired Volvo, Land Rover--and a divorce. Then he launched a complete corporate reorganization, in an everlasting quest to keep up Ford's rep as Detroit's best-run car company. "A lot of things came together," says Nasser. "We were a new generation in a new century and an incredible technological and communications revolution in which the consumers had the power. So it was time to make them the driving force."

By contrast, Ford is so devoted to his wife Lisa and their four kids that he's been dubbed Ford's No. 1 "soccer mom." Last year he moved to Ann Arbor, Mich., where he is building a modest (by billionaire standards) house to give his family a more normal existence than the legacy-ridden conclave of mansions in Grosse Pointe. His current vehicle of choice (he has a garageful, including a couple of juiced-up Mustangs): a chrome yellow Ford Escape, the company's new compact SUV.

Since Ford and Nasser took over, they have forced a markedly more humane agenda down through the company. They are spending $200 million for a program called the Model E, paying to put a computer in every employee's home. Last year the company announced plans to open 30 "family centers" at its U.S. locations, offering, among other services, free day care and adult education. Even the United Auto Workers have been impressed.

Bill Ford's biggest triumph so far is the company's commitment to a $2 billion plan to transform the vast Rouge complex outside his office window into a global showcase of sustainable manufacturing. The Rouge was an Industrial Revolution icon, embodying Henry Ford's vision of massive vertical integration, with iron ore being unloaded at one end and cars and trucks rolling off assembly lines at the other. But it had fallen into obsolescence.

For a decade the company had been wrestling with whether to demolish the complex when prominent ecoarchitect William McDonough sold Bill Ford on the idea of a 1,100-acre monument to sustainability, with a vast, open gallery of a factory and a 454,000-sq.-ft. "natural habitat" for a roof.

The board didn't approve Ford's ambitious plan until last October, after the designers provided analysis showing that the spending made sense because of long-term savings. "I remember thinking, 'There are a lot of intangibles here,'" says board member and former Secretary of the Treasury Bob Rubin. "But as hard as they are to measure, there are some compelling benefits. Bill is a kind of unique, maybe special, person with a real feel for maximizing success over a longer-term horizon than most of us look at."

Ask Ford, and he'll tell you that if he couldn't take the long-term view, he would have quit the company a long time ago. "I grew up in a wealthy neighborhood where there were plenty of second- and third-generation kids who were crushed by their family's expectations," he says. "I always thought I was good enough to go beyond that, but I was never sure whether I'd have the opportunity."

Ford's goals have always defied his pedigree. His parents drove the teenager from tony Grosse Pointe to the working-class neighborhood of St. Clair Shores to play hockey. Although he prepped at Hotchkiss and went on to Princeton, when he started working at Ford Motor 22 years ago, Ford made a reputation for himself as a guy more comfortable in a union hall than at headquarters. And his migration up the corporate ladder was a strange odyssey of brief stints working for bosses who were never quite sure how to deal with a Ford who wasn't just along for the ride.

His family was different. His father William Clay Ford Sr. is a man of wry humor and good sense who at one point oversaw planning for the Lincoln division (he's a design buff). Although Ford Sr. eventually became vice chairman, he and his wife, the former Martha Firestone (yes, those Firestones), encouraged the family to aspire to a non-billionaire-like existence.

Then again, most fathers don't own an NFL franchise. After Ford Sr. bought the Detroit Lions, Junior was deeply impressed by the beating his father took in the local papers when the team went downhill. After all, football matters. "There were days when I was a kid when the local columnists would just rip into my father, and I'd just cry," says Ford. "But it also taught me not to believe in your own press, because once you do, the house of cards just falls in."

By most accounts, Ford fought for almost everything he has at the company. When Bill and his cousin Edsel were appointed to the board in 1988, he fought off demands that he stop dealing with environmental groups. CEO Don Petersen refused to let either Ford serve on any board committees. Even when he was named chairman, Ford was taunted as "Prince William" by outgoing chief executive Trotman. "I had to decide whether to get in the dirt and wrestle or walk away," Ford recalls. He chose to rumble. "I'm a very competitive person, and it made me mad. I wasn't going to let the company beat me."

He also burnished his public image as co-owner and manager, with his father, of the Lions. When his father ceded him control of the team in 1996, Ford reorganized the team management and won a battle with the other NFL owners to keep the Lions' lock on the annual Thanksgiving game. The Lions are still mediocre, but Ford raised about $200 million to build a new stadium downtown, then persuaded his fellow owners to bring the 2006 Super Bowl to Detroit.

Last year Ford learned a lesson about the limits of soft and fuzzy when the Firestone crisis engulfed the company. Ford instinctively wanted the company to get out in front of the issue. Were there problems with the Explorer? "That was the first question I asked," he says. Some evidence showed the Explorer was safer than other SUVs. But Ford execs didn't have time for a full investigation when lawyers, Congress and the media were rolling out damaging allegations daily.

As late as September, Ford asked the board to allow him to be more visible on the Firestone issue, but it was decided that Nasser should take the heat. And he did. Nasser appeared on television ads, did interviews and charged down to Washington to beat back Congress. Everywhere he went, he blamed Firestone. Ford would stay in the background, in part to preserve his image. In the event that there was real evidence of wrongdoing on Ford Motor's part, then the credible Ford could step up and fess up. He is still being held in reserve on this issue.

Being a spectator during Firestone taught Ford a lot about the company that Nasser runs, and it tested their relationship. Many of the top vice presidents, most of whom sit on the 11th and 12th floors at headquarters, are new, not guys who grew up in the company. Although Ford and Nasser talk often, Nasser moves so fast that important decisions have been made without Ford's input. Ford has been frustrated at not having more say, although he realizes that he can't be seen to be interfering lest that tip the scales with Nasser, who, an executive says, can be "as sensitive as nitroglycerin." "One thing Bill has to grow into is a sophisticated understanding of the fact that he is playing a long game," says a top company official. "He was smart to hang back during Firestone. He can help now with the rebuilding in ways that Jac cannot." To that end, Ford is speaking out more on a range of company issues.

These days both men spend most of their time together talking about the sagging economy and trying to correct a rash of operating problems Ford Motor has faced, including a spate of new vehicle recalls. The company's new Explorer, a safer SUV, although it is not advertised that way, is one of the recalls.

What they don't worry much about anymore is Washington. In the old days, millions were spent lobbying against environmental and safety regulations. These days Ford Motor no longer feels pinched by those regs. On a recent visit with Dick Cheney, Ford as much as told the Vice President (between fly-fishing tales) that any backtracking by the Bush Administration on the government's environmental commitments wouldn't have any influence on Ford; the company was going ahead with its own efforts.

The company's latest report, released last week, confirmed that position. Last month the automaker announced it would join with environmental groups (and Toyota and Honda) in a call for consumer tax credits to help subsidize sales of high-mileage hybrid-fuel vehicles, which are still costly to produce. In any case, Ford will begin selling a hybrid-fuel version of its small SUV, the Escape, in 2003. Not to be outdone, General Motors says it will have its fleet of zero-emissions buses on the roads soon. "Two years ago, people couldn't wait to distance themselves from what we were doing," says Ford with a chuckle of satisfaction. "Now they announce that whatever we're doing, they can do better."

So the William Clay Ford Jr. Industrial Revolution No. 2 moves forward. If it succeeds, a man named Ford will have changed industry again. The worst that can happen is that the public will get better mileage and cleaner air from the auto industry. That's not such a bad legacy for a rich kid. "People always say, 'You have enough money; you could do what you want,'" muses Ford. "This is what I want."

--With reporting by Joseph R. Szczesny/Dearborn

With reporting by Joseph R. Szczesny/Dearborn