Q & A 'We Understand We're in Trouble'

Talk about your Motown meltdown. The full-throttle crisis afflicting General Motors has suddenly moved across town to Ford Motor Co. It's not that GM is fixed, it's just that Ford is more of a wreck at the moment. It lost $1.4 billion in the first half of the year as rising gas prices drove down sales of its SUVs and pickup trucks. What's worse, analysts don't see hot new models riding to Ford's rescue any time soon. Sure, Ford hopes its Edge wagon coming later this year will help. But this fall, the new model in Ford's showrooms is a supersize version of its already jumbo Expedition SUV (14mpg city).

With car buyers steering clear of guzzlers like that, Ford's biggest engineering project now is coming up with a new business model that's less dependent on big gulps. The chief mechanic of that job: CEO Bill Ford Jr., 49, great-grandson of the founder. This month, Ford will roll out his second fix-it plan this year, which analysts expect to cut deeper and move faster than his earlier effort to shed 30,000 workers and 14 factories. He's also busy selling off pieces of Ford (he announced a possible deal last week to unload Aston Martin). And he's working the phones, calling Nissan-Renault's superstar CEO, Carlos Ghosn, this summer to express interest in joining forces--that is, if Ghosn's alliance talks with GM don't work out. There's also a growing chorus of critics calling for his head. Amid the frenzy, Ford sat down with NEWSWEEK's Keith Naughton to explain how he's trying to repair the family firm and how he might eventually put himself out of a job. Excerpts:

FORD: We did see this coming. But we didn't anticipate the severity and the speed at which oil rose. We did plan our future products with the notion that oil was going to be a dearer resource and a more expensive one over time. And therefore the shift is already underway to make our product line more fuel-efficient and, in many ways, smaller.

Absolutely, we do. We announced a plan in January which began to restructure our North American operations. As we saw the price of oil causing a dramatic shift in the marketplace toward smaller vehicles, we concluded that we needed to accelerate our restructuring plan. And we've been hard at work doing that.

You know, look, I've always said that titles are not important to me. This company has been part of my life since the day I was born and will be until the day I die. What's important is getting this company headed in the right direction. When I came in [as CEO in 2001], we were awash in red ink. Most of our operations around the world were losing money. And we turned it around in relatively short order. And even last year, we were profitable as a company.

To me, that's not important because I'll always be part of this company. And I'll always look to bring talented people in who can help us. In that regard, I'm not a traditional CEO. Ford is part of my life.

I talk to Carlos all the time, but I'm not going to comment on that.

I'm always looking to bring talent into this company. If I can find somebody--I thought Carlos was an exceptionally talented executive who could help the company--I'll go get him. That is regardless of the position.

Absolutely.

I'm not looking to replace myself. I'm looking to make sure the company is stocked with talent. But look, right now I'm focused on getting the North American operations back on track. That's where my energy and time is going. That's my passion.

I would turn it around and say many potential partners would find having a 40 percent shareholder a real asset, because of the stability of knowing where the vote is and where the control is and not having to wonder who is influencing their partner and what is going to happen next. You know the family just wants the company to do well. And there's never been a time that I can remember--and I can remember almost 50 years now--where the family's interest and the company's interest have diverged. The notion that now, all of a sudden, that would happen is something that I don't think any of us quite understand in the family.

Bob is a great adviser for a lot of people in this country. Bob is probably at his most effective behind the scenes. He's the kind of guy who a number of high-profile Americans call for advice and counsel. And I plan to continue to do that.

Absolutely not, and his [resignation] letter was very clear on that. He said, I think Ford and you are doing all the right things. Bob was very supportive and was a great director.

No. There's not a talent drain. We probably do need to look to add some directors. But not with a big sense of urgency.

There's a lot of anxiety, and understandably so, until we let everyone know what the game plan is and where they fit into it. I also think, though, there's a tremendous sense of resolve. For any employee who has been here 20 years, this is not uncharted waters. It's a battle-tested employee group.

I don't read all that's written about this company, but I do read a lot of it. I don't obsess over it, because that coverage can change tomorrow morning. In the course of my career with Ford, I've read glowing things about me and I've read horrible things about me. In the end, I can't pay too much attention to it. I just have to do what's right for the company.

It's important people understand that we get it. We understand we're in trouble in North America. We understand that it requires extraordinary action, and we are taking that.