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Silverdome Potentially SOLD!
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Nintendo's Mario endures even as games come and go
Founder's descendants stick together to weather changes in auto industry
By Bill Vlasic
New York Times
Published on Sunday, Jun 28, 2009
DEARBORN, MICH.: They met in late January at a nondescript conference center near Ford Motor Co. headquarters, just as they have every three months for the last 20 years.
Yet this meeting was hardly routine for the dozens of descendants of Henry Ford, who are the controlling shareholders of the nation's second-largest auto company.
The American auto industry was on the verge of collapse. The federal government was funneling aid to General Motors and Chrysler to keep them from going bankrupt — and possibly dragging Ford down with them.
The value of the family's 70.9 million special-voting shares had hit a new low that month, dwindling to about $140 million from $2.2 billion a decade earlier, and the company was burning through its cash reserves.
During the meeting, family members fired question after question about Ford's shaky finances at the company's chief executive, Alan R. Mulally.
For the Ford family, it was a gut-check moment — the kind that has led to splits in other famous business families, like the Bancrofts who owned Dow Jones until they sold it to Rupert Murdoch's News Corp.
The Fords have had their tense times, most recently in 2007, when a few family members tried — unsuccessfully — to hire a Wall Street firm to advise the family on possible exit strategies.
But as they have done for decades after their meeting last January, the Fords rallied behind the family's appointed leader: William C. Ford Jr., a great-grandson of the founder and chairman since 1999.
He is also the face of the company in Detroit and much of the world, given the prominent role he played in advertisements during his
tenure as chief executive.
''The last thing this company needs at this point is for the family to be difficult,'' Ford said in an interview. ''And rather than splinter, we have pulled together.''
With no apparent drama to distract its focus on the company, the family instead has made some of the riskiest moves of Ford's recent history. For the first time, it went outside the auto industry for a chief executive, hiring Mulally from Boeing. Then it backed a plan to mortgage all of Ford's assets to borrow $23 billion.
''People look to Alan. People look to Bill,'' said David Hempstead, a lawyer who has advised the family for more than 30 years. ''When Alan said, 'I've got a plan and it's going to work and we're going to turn this thing around,' these people believed him.''
So far, the decisions have paid off. The money that Ford borrowed has kept it solvent and independent, while GM and Chrysler have been pushed into bankruptcy. Ford has streamlined its global operations and set a new course toward making smaller, more fuel-efficient vehicles.
GM's managers must answer to a new majority owner, the federal government, which in turn hopes to sell off its stake to other investors. Chrysler executives are learning to work with the Italian automaker Fiat, which acquired most of its assets.
Ford's top managers said they have no such worries about their controlling shareholders.
''These people are so steadfast,'' Mulally said. ''They believe in this company so much.''
The Ford family members own a special class of stock that gives them 40 percent voting control.
''I feel this is one of Ford's greatest assets, and one that GM has never had,'' said David L. Lewis, a business historian at the University of Michigan. ''The family has been an oasis of stability through the years.''
The regular, quarterly meetings started after the death of Henry Ford II in 1987. The current generation — with 13 cousins, including Bill Ford — has brought its children into the fold. The meetings now include up to 35 family members.
''After my father died, people in the family needed to start talking,'' said Edsel Ford II, a longtime Ford director and Henry Ford II's only son. ''The meetings have become like a call to arms.''
In all, five family members work in some capacity or serve on the board at Ford. Besides Bill and Edsel Ford, three fifth-generation Fords are on the payroll.
Elena, Edsel's niece, is a rising executive who is currently director of global marketing. Her cousin, Alessandro Uzielli, son of Anne Ford, works in Ford's Los Angeles office on projects involving the entertainment industry. And Edsel Ford's oldest son, Henry Ford III, is also a full-time employee with the potential to one day join top management.
Uzielli, 42, said being a Ford comes with a ''sense of honor and trust.'' The last few months have been ''very tough at times,'' but not nearly enough to shake the family's commitment.
In 2001, the family asserted its power by replacing the chief executive, Jacques Nasser, with Bill Ford, who had been chairman for two years.
By 2006, the company was floundering, and appeared to be in worse shape than GM. Bill Ford sought family support to hire Mulally.
''No question, that was a time of high anxiety for us,'' Bill Ford said. ''There were lots of events playing out, all of which were very risky.''
Mulally's vision for Ford included shedding brands and operations that Nasser had built up, and borrowing heavily to restructure. To help persuade banks to lend Ford the money, the company canceled its dividend, which cost family members tens of millions of dollars a year.
''Our plan required sacrifices from everybody, including the family,'' Mulally said. ''But they agreed to do whatever it took to save the company.''
In the spring of 2007, less than a year into Mulally's tenure, some family members, including Bill's sister, Sheila Hamp, and her husband, pushed to hire the Wall Street firm Perella Weinberg Partners, to advise them on long-term strategy — including possible mergers or even a sale.
But Bill Ford and Edsel Ford opposed the move, as did Elena Ford, Edsel's niece. The family voted, and agreed with them.
Elena Ford said the family's strength is rooted in open communications — ''everybody can ask whatever they want,'' she said — and unwavering support once decisions are made.
''We are going through uncharted waters and we're going to stick to our plan,'' she added.
Ford is still losing money — $1.4 billion in the first quarter alone — and its cash reserves are shrinking as auto sales have dried up for the entire industry. Even so, Ford family members said they could not envision any situation that would cause them to sell out.
''If this were just a financial investment, the family probably would have been out of it years ago,'' Bill Ford said. ''This is very much an emotional commitment.''
DEARBORN, MICH.: They met in late January at a nondescript conference center near Ford Motor Co. headquarters, just as they have every three months for the last 20 years.
Get the full article here.
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