Author Bryce G.

Hoffman outlines the key steps taken by Ford CEO Alan Mulally to turn the
automaker around, as detailed in Hoffmans new book, American Icon: Alan Mulally and the Fight
To Save Ford Motor Company.

Alan Mulally is credited with saving Ford Motor Companyand doing it without the taxpayers
money. But what he really did was save Ford from itself.

In the American automobile industry, Ford was notorious for its caustic corporate culture.
Executives put their own advancement and the success of their own departments ahead
of the bottom line. The company was divided into warring fiefdoms. Different sets of data
were used to make different points to different constituencies. And the automaker
consistently bet big on homerun products only to let them languish after their initial
success.
Applying the same methods he had used to save Boeing after the terrorist attacks of
September 11, 2001 annihilated its order book, Mulally transformed this short-sighted,
cutthroat, careerist culture into a model of collaboration and efficiency. He achieved that
result by doing the following:

FORCING EVERYONE TO "JOIN THE TEAM"

Before Mulally arrived in Dearborn, Ford meetings were arenas of mortal combat.
Executives entered them eying each other for advantage, looking for weak spots in each
others armor, ready to drive home a shiv at the first sign of vulnerability. As a result, little
was accomplished beyond self-preservation. Mulally made his weekly executive
meetings a safe environment where data could be shared without blame. "So-and-so
has a problem. Hes not the problem," the upbeat CEO told the assembled executives.
"Who can help him with that?"
To make sure they got the message, Mulally tied each executives performance to the
success of the company as a whole.

INSISTING ON A RIGOROUS RELIANCE ON THE FACTS

At pre-Mulally Ford, the truth came in many different flavors. Different numbers were
used for different audiences. Ford was also big on excuses. There was always a reason
why things did not work out according to plan, but it rarely had anything to do with the
root causes of Fords dysfunction.
In Mulallys weekly "Business Plan Review" meetings, each executive was required to
provide a comprehensive update on the progress their division or department was
making against the backdrop of his turnaround plan. Because all of Fords senior
executives were required to attend every week, any discrepancies in the data were
quickly exposed. And because no explanations were allowed in these sessions,
everyone had an opportunity to concentrate on the facts of the companys performance.
"Theres nowhere to hide," Mulally told me.

CREATING ONE FORD

It did not take Mulally long to realize that there was not just one Ford, but many. In
addition to just plain Ford, there was Ford of Europe, Ford of Asia and a host of other
divisions and subsidiaries. And there was little coordination, or even cooperation
between its many parts.
Mulallys first priority was to weld these disparate regional divisions together into a
single, global enterprise. By doing that, he was able to create previously unimaginable
economies of scale and create a multinational automotive powerhouse.
In an early meeting with reporters, Mulally was asked if he was interested in a merger.
"Yes!" he exclaimed with a big grin as we all whipped open our notebooks. "Were going
to merge with ourselves."

BUILDING CARS AND TRUCKS THAT PEOPLE ACTUALLY

WANTED
This might seem like a no-brainer, but in Detroit in 2006 it bordered on radical thinking.
Like General Motors and Chrysler, Ford was locked into union contracts negotiated in
better times that prevented it from laying off workers or closing plants. So it filled those
factories with cheap vehicles and sold them at a loss.
Before he agreed to replace Bill Ford Jr. as CEO, Mulally told the great-grandson of
Henry Ford that he intended nothing less than a complete, top-to-bottom reboot of the
product lineup. From now on, every new Ford would be the best vehicle in its class. This
product renaissance would not be cheap and Ford was running out of cash, but Mulally
insisted on it. "Youve been going out of business for 30 years," Mulally told Bill Ford.
"This is how to get back in it."

COMING UP WITH ONE PLAN AND STICKING TO IT

Ford had plenty of plans before Mulally. In fact, it usually came up with a different one
every year or so. And when that one did not work, it came up with another.
But Mulallys plan was different. It was simple, consisting of just four points. Youve just
read about three of them: Coming together as a team, leveraging Fords global assets,
and building cars and trucks that people wanted and valued. The fourth point was putting
together the financing necessary to pay for it all.
Mulally kept hammering home these four points in every meeting, every town hall
session, every analyst meeting and press conference. After Mulally delivered the same
stump speech at the New York auto show in April 2007, I asked him when he was going
to come up with something new. "But, Bryce, were still working on this plan," he replied.
"Until we achieve these goals, why would we need another one?"
He was right. And Ford kept working on that plan until it became the most profitable
automaker in the world.

How Outsider Alan Mulally Rescued Ford

Some people underestimate Alan Mulally when they first meet him. Ford Motor Co.'s
66-year-old chief executive, who grew up in Kansas and once aspired to be an
astronaut, looks and sometimes acts like an overgrown Boy Scout. He laces his
speech with words such as "neat," "cool" and "absolutely."
But the farm-boy exterior conceals one of business' toughest, most ruthless
managers. When a desperate Bill Ford recruited Mulally from Boeing in 2006, Ford
was heading for a $12.7-billion loss and on the verge of losing its No. 2 sales spot in
the U.S. to Toyota because of poor management and an uninspiring vehicle lineup.
Four years later, Ford reported a $6.6-billion profit the biggest in the sector that
year and Toyota was comparing its cars with Fords, not Hondas, in its ads.
In his new book "American Icon: Alan Mulally and the Fight to Save Ford Motor
Company," author Bryce G. Hoffman, a veteran reporter with the Detroit News,
details "one of the greatest turnarounds in business history" and, to a lesser extent,
the man behind it.
Published by Crown Business, the book makes for a fascinating read for anyone who
follows the car industry; others may find the story engaging too, if hard work in
places.
Ford was in deep trouble in 2006, with a poisonous culture in which executives
fought turf wars and sat through endless meetings but made the real decisions
elsewhere.
When Mulally arrived, many of its senior managers in Dearborn, Mich., did not deign
to drive Fords or even cars made by its rivals, preferring the Jaguars and Land
Rovers made by its loss-making British luxury brands. The new boss made them
drive Volkswagens and Hondas.
Importing a practice from Boeing, he introduced weekly meetings that were
mandatory for all senior managers. Executives were barred from using BlackBerrys
or belittling one another; they were required to grade their own progress on targets
truthfully and to confront problems head-on.

Initially, Mulally faced resistance in a company indeed, an industry that has

always viewed outsiders with suspicion.
But he made a series of canny decisions and astute appointments that protected Ford
as the U.S. car industry headed into a crisis in 2008 that nearly sank the century-old
company and its two Detroit competitors, General Motors and Chrysler.
Mulally protected product spending even as Ford cut thousands of staff and
economized on everything else, down to paper clips and plant watering.
He made tough decisions only a cold-eyed non-car enthusiast would, such as selling
Ford's European premium brands and its stake in Mazda so it could focus on its core
"blue oval" mass-market cars.
Some of the masterstrokes attributed to Mulally were already underway when he
joined. His predecessors had begun steps to borrow $23.6 billion in 2006, just before
credit markets closed.
But Mulally sealed that deal brilliant in hindsight because it enabled Ford to refuse
a federal bailout and a trip through bankruptcy that would have seen its shareholding
family's members diluted out of their birthright.
Avoiding Chapter 11 bankruptcy also gave Ford's cars an edge over GM and Chrysler
with U.S. consumers, while better vehicles developed on Mulally's watch began
rolling into dealerships.
Some of the stories in the book have been told before, but the author delivers much
new, excellent reporting collected in interviews with all the main people concerned.
Mulally is a constantly chipper, boosterish presence, whether bucking up dispirited
colleagues, preparing for a presentation in Congress or hugging a dumbfounded
customer at a dealership in Shanghai.
"Mulally ripped off the bandage, cauterized the wound and cured the disease," the
author concludes, with his typical gusto. "Only an outsider could do that."