Excuse Me, Mr. Ford

Mulally is pressuring Ford's execs, but hasn't recruited new blood. "The guys who created this mess are still running the company," says veteran auto analyst Maryann Keller. Mulally quickly learned how Ford's insular culture rejects outsiders. Soon after he arrived, execs began going to Bill Ford, saying the new guy didn't know what he was doing. Ford brushed them off, saying: "Talk to Alan. He's going to make the decisions." Mulally decided that some of those executives, whom he won't name, should find employment elsewhere. "People went around me," he says. "Once."

Despite their awkward alliance, Bill Ford and Mulally have developed a close bond. "In the past, people wouldn't come in and tell me when things were screwed up," says Ford. "Now it's terrific to have somebody that I can actually talk to with total honesty about fears, concerns, people."

Their candid conversations eventually came around to what Mulally saw as Ford Motor's greatest failing: its parochial view of an industry that is global. Ford sells similar family cars throughout the world that are all based on different designs, each costing billions to develop. Toyota, on the other hand, sells the same Corolla everywhere, which helps explain why it earned $13.7 billion last year. When Mulally, who drove a Lexus before joining Ford, bluntly asked why the company operated this way, Bill Ford responded, "Well, Alan, it was just too hard" to change the culture.

Mulally proceeded to overhaul Ford's structure, putting a single executive in charge of every car and truck Ford designs worldwide. Ford still lags behind GM in its efforts to emulate Toyota, but analysts say at least it finally has the right idea. "It really took somebody from the outside," says Ford, "to come in and see the blindingly obvious." Now this management odd couple must prove they've seen the light soon enough.

© 2007