Bryce G. Hoffman. American Icon: Alan Mulally and the Fight to Save Ford motor Company. New York: Crown Business, 2012. 422 pp. $26.00 (Hardcover), ISBN 978-0-307-88605-7.
Today the automotive world looks to Ford Motor Company as a standard in quality in the industry. This had not always been the case. In fact, this is a very recent development, coming only in the last five years. Like General Motors and Chrysler, Ford had been viewed as complacent in the market and bloated in brands in the late 1990s and early 2000s. This was only made worse under the leadership of CEOs Alex Trotman and Jacques Nasser. In 2001, Bill Ford become CEO of the company that bore his family’s name, but he began to realize Ford was in poor shape, and he was not the man to run the company.
Automotive journalist Bryce G. Hoffman explores this early history briefly in his book American Icon: Alan Mulally and the Fight to Save Ford Motor Company. Bill Ford realized that Ford was desperate and needed to find someone who could save it. The man chosen for the job was Boeing executive Alan Mulally. Mulally had worked at Boeing after the terrorist attacks of September 11, 2001 when Boeing’s sales were cut by over 50% following the attacks, and Mulally began to cut Boeing and reorganize it into a global business. This record attracted the attention of Bill Ford and he brought him to Ford as CEO in September 2006.
Hoffman uses his connections, as well as the cooperation of Mulally and many within Ford, to tell the story of one of the greatest turn-arounds in business history. When Mulally arrived at Ford, he encountered a poison corporate culture that encouraged competition and backstabbing among its executives. His job was to save Ford from bankruptcy, by some estimates Ford was only a few months from this reality, but Mulally would have to train the executives to think, and act, as a team. He did this by having weekly meetings with all senior executives who were required to present the data from their respective departments to Mulally each week. He wanted openness, something that had never been stressed in Detroit.
As the openness began to spread, the problems within Ford became clear to Mulally and this allowed him and the team to begin restructuring the company. His goals was to simplify the Ford lineup by eliminating the majority of its brands (Ford owned Ford, Lincoln, Mercury, Aston Martin, Jaguar, Land Rover, Volvo, and a stake in Mazda). At the same time, Mulally brought the organization methods used at Boeing to make Ford global. This organization saved Ford a great deal of money allowing them to sell the same cars worldwide and build a number of cars on the same vehicle platforms.
What set Ford apart was the fact that it was not bailed out by the United States government during the 2008 economic crisis. Ford had begun its restructuring two years before the meltdown and had seen the recession coming. It borrowed $23 billion in preparation for the crisis and came through the recession as a winner. The brand was praised by the public for not having to take federal bailouts like its competitors, but Ford had also begun improving quality and this was getting the attention of automotive publishers and Consumer Reports.
Hoffman’s description of Ford’s recovery is extremely detailed. This is due to his access to Ford executives and Mulally, but also due to the fact that he promised to not associate particular stories and quotes to their respective sources. This made people from Ford open up to Hoffman and he uses every piece of information to his advantage. His exploration of Ford’s restructuring is both informative and instructional.
The story of Ford’s resurgence is nothing short of amazing. It is striking similar to Steve Jobs’s return to Apple in 1997. But the one difference is Mulally. While Jobs is often described as a product visionary and, at times, difficult to work for, Mulally is more business minded and openly kind to employees at every level of Ford. Both men’s systems of leadership have proven to be successful in the last decade despite their different leadership styles.
It may be a stretch to call Alan Mulally the greatest CEOs ever, but he is certainly the greatest automotive CEO in history. He knew how to read customers and the market and develop plans to meet both. Hoffman describes how the CEOs of GM and Chrysler scoffed at Mulally, an outsider, in 2006, but today Mulally is still head of Ford, they are no longer employed by the auto industry.
Hoffman’s analysis of Mulally’s business restructuring plans is the most important aspect of this book. The openness and sharing of ideas, weekly meetings with department heads, and a matrix organization system. He concludes that this plan is one that can be applied to a variety of businesses. Unlike books on Apple and Steve Jobs which specifically say their books are not intended to be instructional, Hoffman’s book is. The case of Ford and Mulally will likely be studied by business students in the future.
Hoffman has pieced together a great book that explains how Mulally was able to save Ford Motor Company. Mulally’s fight was not easy, battling the United Auto Workers, his executives, the government, and the Ford family. Each time, Mulally came out on top. The greatest fear at Ford today is when Mulally will retire. At 66, he is likely the oldest employee at Ford, if not in the auto industry. Many worry that his changes will not remain in place after he is gone. Only time will tell, but one thing is for certain, Ford is looking stronger now than it has it the history of the company, thanks to Alan Mulally.