How Ford bounced back

April 12, 2012: 7:54 AM ET

Our Weekly Read column features Fortune staffers' and contributors' takes on recently published books about the business world and beyond. We've invited the entire Fortune family -- from our writers and editors to our photo editors and designers -- to weigh in on books of their choosing based on their individual tastes or curiosities. In this installment, senior editor-at-large Alex Taylor reviews American Icon: Alan Mulally and the fight to save Ford Motor Company, by Bryce Hoffman.

FORTUNE -- As a longtime follower of the auto industry, I am addicted to books that promise the inside skinny about the personalities behind the products. When a new tome arrives in the mail, I scour it for inside dope, untold stories, and back-room gossip that will unwrap another layer of this fascinating and complex business. Full disclosure: I also peek at the index to see if Fortune has been quoted.

At the moment, my bookshelf runneth over. The upturn in industry fortunes that followed the bankruptcies of Chrysler and General Motors (GM) has provided an irresistible story arc of near-death, repentance, and revival. Among a number of first-rate accounts that have appeared in the past 24 months, Bryce Hoffman's American Icon: Alan Mulally and the fight to save Ford Motor Company is a standout.

Unable to accommodate a deluge of requests from writers eager to document its revival under Mulally, Ford (F) chose Hoffman, a reporter for the Detroit News, and granted him unique access to tell its story without editorial oversight. It chose wisely. Hoffman has produced a book brimming with smart observations and fresh insights into Ford's success. (Another disclosure: Both Fortune and I are mentioned, briefly, in the book).

The outlines of the Ford turnaround are well known by now. Family scion Bill Ford lured Mulally, a former Boeing (BA) executive, to Detroit in 2006 after being rebuffed by two more experienced leaders. Mulally reshaped the company by dropping lines like Volvo and Mercury and focusing on one global Ford brand. He built a team of like-minded executives through persistence, persuasion, and force of personality.

"Ford's executives finally stopped making decisions based on what was best for their own careers and started trying to figure out what was best for the company as a whole," Hoffman writes. "That was something that had never happened before in Dearborn and it was the key to Ford's phenomenal resurgence."

At first telling, Mulally comes off like a character from a Preston Sturges movie, all "aw shucks" and "gee whiz." But behind the smiles, Hoffman reveals a toughness in Mullaly that surfaces when dissenters threaten his carefully-nurtured atmosphere of collegiality.

When one executive refused to follow his direction, Mulally simply eliminated his job. He pushed another manager into early retirement because he played badly with others. Hoffman also reports that Mulally withstood a threat from Americas president Mark Fields to quit when Fields was challenged over the use of a company airplane. Mulally stood his ground but didn't hold a grudge. Fields is now the clear favorite to succeed him whenever the 66-year-old decides to retire.

Hoffman also provides a full account of a long-rumored rift in the Ford family that surfaced in the early months of Mulally's tenure. With their dividends suspended and family jewels Jaguar and Land Rover headed for the auction block, dissidents members -- notably Bill Ford's sister and brother-in-law -- consulted with the boutique investment bank Perella Weinberg about ways to monetize their holdings, which included selling control of the company.

Bill and his cousin Edsel beat back the effort and placed their faith in Mulally. They were rewarded with a spectacular turnaround. After losing $14.6 billion in 2008, Ford snapped back and went on to make a $7.8 billion profit in 2011.

The long hours that Hoffman evidently spent with Mulally reveal a man with few flaws, except that he likes to beat everybody into the office by arriving at 5:30 a.m. But this is not hagiography. Hoffman doesn't try to finesse Mulally's ample compensation, which became an issue in labor contract negotiations. (Mulally made $29.5 million in 2011 -- the biggest Detroit payday since Lee Iacocca got $23.6 million from Chrysler in 1986). He's also made good use of his access to dig into previously neglected topics, like the protracted 2009 negotiations required to extract concessions from the United Auto Workers.

Hoffman has a good ear for dialogue and a thorough knowledge of the industry, though he sometimes resorts to clichés when dealing with less familiar topics. Describing Bill Ford's background, for instance, he writes that Ford grew up in a "posh enclave" and attended a "prestigious" school, yet was "down-to-earth" enough to "rub elbows with the common man."

The fortunes of American auto companies tend to rise and fall with the GDP, and Ford follows its own cycle of good and lean years. "Ford's history is a long list of stunning successes followed by epic failures, of against -- all -- odds comebacks that turn into retreats back into mediocrity and mismanagement," writes Hoffman.

The company still has weak spots. Ford has been slow getting to China, U.S. market share is falling, and its first two global cars (Fiesta and Focus) have failed to excite. The true test of Mulally's tenure will be whether the changes he has put in place -- data-driven management, consistent application of agreed-upon principles, teamwork -- survive him. If Mulally ever gets around to retiring -- say around 2015 -- I look forward to adding Hoffman's sequel to my bookshelf.

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