American Icon: Alan Mulally and the Fight to Save Ford Motor Company

Product Description

THE INSIDE STORY OF THE EPIC TURNAROUND OF FORD MOTOR COMPANY UNDER THE LEADERSHIP OF CEO ALAN MULALLY.

At the end of 2008, Ford Motor Company was just months away from running out of cash. With the auto industry careening toward ruin, Congress offered all three Detroit automakers a bailout. General Motors and Chrysler grabbed the taxpayer lifeline, but Ford decided to save itself. Under the leadership of charismatic CEO Alan Mulally, Ford had already put together a bold plan to unify its divided global operations, transform its lackluster product lineup, and overcome a dys­functional culture of infighting, backstabbing, and excuses. It was an extraordinary risk, but it was the only way the Ford family—America’s last great industrial dynasty—could hold on to their company.

Mulally and his team pulled off one of the great­est comebacks in business history. As the rest of Detroit collapsed, Ford went from the brink of bankruptcy to being the most profitable automaker in the world.

American Icon is the compelling, behind-the-scenes account of that epic turnaround. On the verge of collapse, Ford went outside the auto industry and recruited Mulally—the man who had already saved Boeing from the deathblow of 9/11—to lead a sweeping restructuring of a company that had been unable to overcome decades of mismanage­ment and denial. Mulally applied the principles he developed at Boeing to streamline Ford’s inefficient operations, force its fractious executives to work together as a team, and spark a product renaissance in Dearborn. He also convinced the United Auto Workers to join his fight for the soul of American manufacturing.

Bryce Hoffman reveals the untold story of the covert meetings with UAW leaders that led to a game-changing contract, Bill Ford’s battle to hold the Ford family together when many were ready to cash in their stock and write off the company, and the secret alliance with Toyota and Honda that helped prop up the Amer­ican automotive supply base.

In one of the great management narratives of our time, Hoffman puts the reader inside the boardroom as Mulally uses his celebrated Business Plan Review meet­ings to drive change and force Ford to deal with the painful realities of the American auto industry.

Hoffman was granted unprecedented access to Ford’s top executives and top-secret company documents. He spent countless hours with Alan Mulally, Bill Ford, the Ford family, former executives, labor leaders, and company directors. In the bestselling tradition of Too Big to Fail and The Big Short, American Icon is narrative nonfiction at its vivid and colorful best.

Product Details

• Amazon Sales Rank: #17113 in Books
• Published on: 2013-02-05
• Released on: 2013-02-05
• Original language: English
• Number of items: 1
• Dimensions: 7.99″ h x 1.10″ w x 5.20″ l, .70 pounds
• Binding: Paperback
• 432 pages

Review
“A standout…brimming with smart observations and fresh insights into Ford’s success.” –Alex Taylor, Fortune
 
“Fly-on-the-wall accounts of Mulally negotiating deals and Ford overcoming challenges from the inside and outside…A paean to the ingenuity, grit and optimism that once defined American industry and to capitalism played with government on the sidelines.” –Reuters
 
“A compelling narrative that reads more like a thriller than a business book.”–New York Times
 
“A must-read.” –Huffington Post
 
“A fascinating read for anyone who follows the car industry.” –Financial Times

“A Detroit News journalist’s in-the-room account of the resurrection of America’s most storied car company…With colorful anecdotes, sharp character sketches, telling details and a firm understanding of the industry, Hoffman fleshes out every aspect of this tale, reminding us of the hard work, tension, and high-stakes drama that preceded the successful result.” —Kirkus

“Bryce Hoffman has done a stellar job of capturing the Ford story—and more to the point showing us how Mulally did it.  American Icon is a story of leadership that offers valuable lessons for organizations of all sizes.” —Lee Iacocca

“Bryce G. Hoffman’s American Icon brilliantly recounts the Lazarus-like resurgence of the Ford Motor Company under the bold and inspiring leadership of CEO Alan Mulally. Hoffman, one of America’s best auto industry reporters, has written a timely book about the relevance of Ford that serves as a larger metaphor for America at large. Highly recommend!” —Douglas Brinkley, professor of history, Rice University, and author of Wheels for the World: Henry Ford, His Company, and a Century of Progress

“Bryce Hoffman has written a riveting tome based on deep insider information about the resurrection of the Ford Motor Company from a near death experience and the establishment of a business model that promises to be a prototype for large organizations of all types. It features the transformation from a top-down style of leadership to that of a coach led by CEO Alan Mulally whose focus is the team, the team, the team.” —David E. Cole, chairman emeritus, Center for Automotive Research

“From the precipitous demise of an American icon through decades of infighting and self-destructive management to a turnaround not only financial but also in terms of forging the foundation of a new, healthy culture, this book reads like an un-put-downable novel. Bryce Hoffman’s amazing inside access tells the story of how Alan Mullally built on Henry Ford’s own management principles—which quickly got lost in the company—and created one company, with one purpose and a passion for product and customers. A great story.” —Jeffrey Liker, professor, University of Michigan, and author of The Toyota Way

“Amazing. I would give Alan Mulally twelve D’s for his work at Ford, for Discipline, Data, Daring, Determination, Design, Direction, Decisiveness, Delivery, Doubt-Free, Debt Free, Downsizing, and of course, Dearborn.  I thought I was disciplined until I read how Mulally worked. Bryce is a gifted writer, and American Icon is both educational and entertaining.  Most telling of all—I learned from reading this book.” —Lee Cockerell, former Executive Vice President, Walt Disney World Resort, and author of Creating Magic

“After decades of stories about the failure of America’s traditional industries to meet world competition, it is heartening to encounter a signal success. But Bryce Hoffman’s rendering of how Alan Mulally reversed the fortunes of Ford Motor is more than heartening; it is riveting. Almost certainly one of the best business books of the year.” —H. W. Brands, professor of history at the University of Texas at Austin, and author of Traitor to His Class andThe First American

“This superbly reported book is not just about cars. It is an authoritative and inspiring account of leadership, management, corporate culture, and the prospects for American manufacturing.” —John Taylor, author ofStorming the Magic Kingdom

From the Hardcover edition.

About the Author
BRYCE G. HOFFMAN is an award-winning journalist who has covered the auto industry, both in the United States and around the world, since 1998. He began cov­ering Ford Motor Company for the Detroit News in 2005. That beat gave him a front-row seat for many of the events chronicled inAmerican Icon. Hoffman has been honored by the Society of American Business Edi­tors and Writers, the Society of Professional Journalists, the Associated Press, and others for his coverage of Ford and is one of the world’s foremost authorities on the automaker. He lives in Grand Blanc, Michigan.

Excerpt. © Reprinted by permission. All rights reserved.
CHAPTER 1

The House That Henry Built

Business men go down with their businesses because they like the old way so well they cannot bring themselves to change. One sees them all about-men who do not know that yesterday is past, and who woke up this morning with their last year’s ideas.

-HENRY FORD

While many of Ford Motor Company’s problems were shared by the rest of Detroit, the Dearborn automaker also faced some challenges all its own. Ford’s woes had not begun with the arrival of the Japanese in the 1960s or the oil crises of the 1970s. The company had been struggling with itself since Henry Ford started it on June 16, 1903. It invested massively in game-changing products, and then did nothing to keep them competitive. It allowed cults of personality to form around large-than-life leaders, but drove away the talent needed to support them. And it allowed a caustic corporate culture to eat away at the company from the inside. These were birth defects that could be traced back to the automaker’s earliest days. Henry Ford liked to boast that he had created the modern world. In many ways, he had. But he also created a company that was its own worst enemy.

Henry Ford began that company with a simple vision: “I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one-and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”

Ford made good on that promise with his Model T, a simple, reliable, no-nonsense car that transformed the automobile from a rich man’s toy into a means of transportation for the masses. When the Model T went on sale on October 1, 1908, most cars cost a small fortune. It started at $850-less than $20,000 in today’s money. “Even You Can Afford a Ford,” the company’s billboards proclaimed. But Ford did not stop there.

As demand for these Tin Lizzies grew, the pioneering manufacturer began building them on the world’s first moving assembly lines. This cut the average time it took to produce a Ford from thirteen hours to just ninety minutes. But workers got bored on Ford’s assembly lines, and turnover was high. So, in January 1914, the company stunned the world by announcing that it would pay workers $5 a day. It was America’s first minimum wage, and it was more than twice what most other laborers made at the time. As news spread, tens of thousands of men-particularly in the underdeveloped South-threw down their picks and hoes and headed for Detroit. Ford’s $5-a-day wage sparked one of the largest economic migrations since the California Gold Rush and created the industrial middle class. As Henry Ford would later boast, it also made his workers as reliable as his machines. Mass production allowed Ford to cut costs and boost efficiency. He passed the savings on to consumers and made his money on the added volume. Henry Ford claimed that every dollar he shaved off the price of his car bought him a thousand new customers. By 1925, the price of a Model T had dropped to $260-just over $3,000 today-and Ford was making more than 1.6 million of them a year.

It was an impressive figure for the time, but it was nearly 200,000 less than the company was making just two years before. Despite the massive price cuts, sales of the Model T were slumping. So was Ford’s share of the market, which peaked in 1921 at 61.5 percent. Other automakers, like General Motors, were regularly introducing new models-each one an improvement over its predecessor. The Model T had seen few updates. It was old technology, yet Henry Ford stubbornly refused to begin work on a replacement. He thought it was all the automobile the average person needed. When his engineers began work on a new prototype anyway, Ford destroyed it with a sledgehammer. But Ford’s dealers were clamoring for something new. So was his son, Edsel. By the time Ford finally began work on his new Model A in 1927, demand had fallen so dramatically that he was forced to close his factories and lay off 60,000 workers.

As Ford retooled, General Motors passed it to become the largest automaker in the world. Many thought Ford was finished. But on November 28, 1927, people all over America waited in line for hours outside dealerships for a glimpse of the first new Ford in twenty years. It did not seem to matter that the only thing inside most of the stores was a cardboard cutout. By the end of the day, more than 10 million people-10 percent of the U.S. population-had seen the Model A. It combined the Model T’s practicality with something entirely new to Ford customers: style. Thousands placed orders on the spot. Ford’s factories surged back to life, unable to keep up with the unprecedented demand for its new car.

Within two years, the company had sold more than 2 million Model A’s and its share of the domestic market doubled. Yet once again, Henry Ford rested on the laurels of his phenomenal success as his competitors continued to improve their offerings. The next new Ford would not arrive in showrooms until 1932. By then, other manufacturers were introducing new models every year, and Ford was losing money. Fortunately for the Dearborn automaker, its new flathead V-8 motor was another innovative hit. But Ford would not really begin to diversify its product lineup until after World War II, and even then it would continue to make the same mistake with products like the Thunderbird and the Mustang.

By the 1980s, Ford was fighting for its life once again-this time against new competitors from Japan. Ford and the other Detroit automakers had been ceding sales to the import brands for a decade, and many doubted whether the Big Three would be able to mount a counterattack. Then Ford stunned the automotive world with the most radical new design in years. In 1985, it unveiled the Ford Taurus, a streamlined sedan with rounded corners that featured the tighter suspension and precise steering more typical of European automobiles. Critics said it looked like a jellybean, but it was a hit with consumers and pushed Ford’s profits past GM’s. The Taurus was so successful that General Motors and Chrysler were soon copying Ford’s aerodynamic design, as were the Japanese.

For a while, it seemed like Ford might finally have learned its lesson. It introduced an upgraded version of the Taurus in 1992 that was even better than the original. The Taurus became the bestselling car in America, seizing that title from the Honda Accord. But Ford’s investment in the popular sedan soon petered out. In 1997, Toyota’s Camry claimed its crown, and the Taurus was soon relegated to rental car fleets. When production finally stopped in 2006, few even noticed.

Ford’s overreliance on a single product was surpassed only by its overreliance on a single man. In the beginning, that man was Henry Ford. Instead of leading a team of managers, Ford preferred to rule his industrial empire like a potentate. He had a good eye for talent and initially tried to fill his court with able executives, but he often drove them away once they began to exert significant influence over his organization. Ford was even unwilling to share power with his own son. Edsel Ford replaced his father as the company’s president after the family bought out the other investors in 1919, and he held that position until his death in 1943. But Henry Ford still made all the decisions, large and small, often countermanding any orders his son tried to give. He even rehired men Edsel had fired.

Though Henry Ford did not create Ford Motor Company by himself, he often acted as though he had. James Couzens, the company’s first general manager, played the prudent businessman to his mad inventor-at least until he resigned in 1915.

“Mr. Couzens said that, while he was willing to work with Mr. Ford, he could no longer work for him,” wrote another early Ford executive, Charles Sorensen. “The paradox is that but for Couzens and his organization and domination of sales and finance Ford Motor Company would not have lasted long.”

William Knudsen, a manufacturing prodigy who helped orchestrate the company’s shift to mass production, was also driven away-right into the arms of General Motors. There he became head of Chevrolet, leading it past Ford in factory output by 1931.

“Mr. Knudsen was too strong for me to handle,” Henry Ford later conceded. “You see, this is my business. I built it, and as long as I live, I propose to run it the way I want it run.”

Instead of capable executives with their own ideas, Ford preferred to surround himself with yes-men and hired guns like Harry Bennett, the éminence grise with reputed underworld connections whom he hired to keep order at the River Rouge factory complex. Bennett was quickly promoted to chief of the Ford Service Department, which under his leadership grew into the largest private police force in the world. Men like Bennett fostered an enduring culture of intrigue and backstabbing among Ford’s senior leadership. Employees lived in fear of being fired by capricious managers and thought carefully before answering questions to make sure they gave the expected response, even if it was wrong.

By the 1930s, Ford had become “a dark, almost gothic place, with a shadowy administration, activities shrouded in mystery, and a roster of dubious characters running rampant on the premises,” in the words of historian Douglas Brinkley, who also noted the absence of any real corporate structure at the company. “Henry Ford had preferred to receive reports on his company anecdotally, even through espionage, rather than in the numeric rationale of accounting.”

The Flivver King, as Ford became known, ran his dominion by instinct and intuition. The only way anyone in Dearborn knew how much cash the company had was by looking at its bank statements. Ford actually figured out how much money to set…

Customer Reviews

Most helpful customer reviews

36 of 38 people found the following review helpful.
If you liked the Walter Isaacson book “Steve Jobs”, you are going to love this one on Alan Mulally. Both are of similiar quality
By S. Power
I highly recommend that you read this book and fully agree with what the other positive reviewers are saying about it. This book itself was not just a good read about a stalwart man, and an incredible company, it is an epic tail of a Great American Manufacturing Dynasty brought back from the brink of extinction. Reading it really inspired me to learn even more about Mulally, The Ford Motor Company, and their products. After reading the book, or while you wait for it to arrive, check out some of the videos and movies about Alan Mulally on the internet. His appearances at local universities, on late night talk shows, and in a documentary done about his work at Boeing all make for really interesting supplements to this book.

This book is different from, but every bit as well done as Walter Isaacson’s book on Steve Jobs. Both of the biographies are appealing in many of the same ways. You get a history lesson, a solid business book, a solid overview of the automotive industry, a human interest story, and a biography not just of Mulally but also of other key people in the industry. You also get a really fully developed business case study that demonstrates the lessons of teamwork, core competency, strategic management, benchmarking, business ethics, the importance of liquidity among many other concepts. Although Steve Jobs and Alan Mulally are as different as two men can be, I see similarities in their importance, vision, and impact on the World. Their biographers and their biographies are also very different, but again similar in quality and importance.

The factual accuracy of this book seems to be very good. Bryce Hoffman has a lot of credibility in this part of the country and it doesn’t seem that he has any agenda except to tell the story and write a good book. At times, he seems to be exaggerating the dichotomy of how bad Ford was and how great Alan Mulally and Bill Ford were, but a lot of people I know deep inside ford have the same opinions. I don’t think that the author has any nefarious agenda in writing this book, and he is so hard on the automotive insiders in this country that I don’t think anyone will accuse him of being self-serving. In the last chapter he does a nice job of pointing out how no one man saved Ford and reaffirming the strengths that some of the ‘characters’ brought to the situation.

The entire book is suspenseful and captivating from start to finish and in the events or perspective of each chapter. There are really funny anecdotes throughout the book and more than enough drama to keep even fiction readers interested. There is also a lot in this book that will make for worthy quoting. The chapter starters are all relevant quotes from Henry Ford himself, but there are also a lot of very useful and powerful quotations from more recent people, events, and situations.

The biography is written in a non-sequential style that can be a little unwieldy because it requires that you really keep on your toes about how the events relate as they are addressed in the various chapters. Despite this small flaw, or choice of style, the book is well organized, and I think the author made the right decision, overall in the presentation of the information. Just be prepared to have to go back sometimes to refresh your memory about where in time the topics that are being discussed occurred.

These two biographies, this one and Isaacson’s, are the most thorough and well done books in a very long time. I highly recommend that you read this one and consider tabbing it as you go. I wish I had tabbed mine as I went. There is certainly a lot of information that I’ll be referring back to as I try to emulate some of Mulally’s successes and avoid the pitfalls that are highlighted.

If there was anything that you wanted me to cover in this review that I failed to, please let me know in the comments and I’ll go back and cover them. I want this to be useful for you.

21 of 23 people found the following review helpful.
Fascinating, page-turning, idea-inspiring!
By James Korsmo
Simply put, this book is a page-turner. And that’s not what you’d normally expect from a business book. But there’s a great story here, well told, that excites the mind.

There hasn’t really been a bigger story in the last half-decade than the economy, and along with the banking and housing sectors, America’s “big three” automotive manufacturers have been key players in that story. But amid an economy in decline and two cross-town rivals falling toward default, Ford managed to plot a different course. This book is the story of that startling rebirth. It briefly chronicles the history of Ford, appraising its ups and downs and the resulting corporate culture its history had created. And it looks at the trouble it was facing (along with the rest of the auto industry) in the mid 2000s. But things took a decisive change for Ford when Bill Ford Jr. volunteered to step aside as CEO and bring in outside help. And the person he tapped for that responsibility was Alan Mullaly, a top executive who had just led a resurgence at Boeing.

American Icon is really three books in one: It is an interesting piece of modern American history, chronicling the inside workings of a key economic player in the midst of historic economic troubles throughout the country and the world. It is also a business book, with thoughtful and inspiring ideas for rethinking corporate culture, business workflows, and entrenched mindsets with cross-functional teams, openness, responsibility, and a carefully focused but always updating plan. And third, it is an interesting biography of both Bill Ford Jr. and Alan Mullaly, giving insight into their personalities and approaches to business.

Mulally’s ideas of emphasizing simplicity, comporting vision with reality, and demanding open collaboration and communication among team members worked wonders at Ford. He paints a compelling picture of how a corporate structure (at whatever level) could work constructively and agilely to effect productive change and breed success. I often had to put the book down so I could jot down ideas for making some of his principles work in my own workplace. This business book almost pulls new ideas out of you by stimulating your thinking; at least, it did for me.

I loved this book, and am happy to enthusiastically recommend it. It’s a fascinating case study in successful business coupled with compelling modern history told as a fast-moving story. You will not be bored; in fact, you’ll be pulled in to Mulally’s vision as you see it unfold before you.

18 of 20 people found the following review helpful.
Visionary
By Aaron Gutsell
Simply put, Ford is now exciting. Bryce Hoffman explains why and how. Alan Mullally was brought in to save a legend from itself, and he did just that. The Mulally model will probably be studied and taught for decades. Ford’s culture was poisonous at so many levels. Bad products, bad policies, and a toxic culture of backstabbing and oneupmanship had culminated in what would be an inevitable end. Executives bugged each other’s offices, phones were tapped, vehicles were overproduced and later sold at discounts; and that culture was decades old. Henry Ford started it all when a bunch of guys went behind his back, made some improvements to the Model T, and delivered a prototype. Ford destroyed it with a sledgehammer.
Bryce Hoffman was given unprecedented access and provides direct quotes from many of the defining moments and situations that occurred over the last decade, including talks with the Chrysler and GM CEOs, Ben Bernanke, Hank Paulson, candidate Obama, the Ford heirs, and so on. There have been complaints that the book is overly optimistic bordering on worshipful. Well, all you need to do is look at the product. I walked around a dealership. Ford’s new vehicles look great, and the company now has the highest quality rating for a non-luxury brand. In the book you read about the current advertising campaign that was conceived several years ago. Ford started off with ‘One Ford’ or something, and as quality improved, Mulally wanted to move to interviews with customers impressed with the new product; in other words using actual customers to sell great vehicles. And that is exactly what is happening today.
Mr. Hoffman has been an auto industry reporter for a number of years and knows what stories are relevant, where the bodies are buried, and where the shovels are at.

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