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THE FORD FAMILY

Source : Family Wars – Grant Gordon & Nigel Nicholson

YOUNG HENRY

So much is the Ford car business a part of industrial history, still standing as an icon of the modern age, that one tends to forget its family origins, and the continuing relevance of its heritage. As a family, it rates high in passion – a saga of a powerful entrepreneur who lost his only son and heir prematurely, was forced by his daughter-in-law to abdicate power, and left a trail of psychological debris.

The Ford story is also a testament to business success via the classic values of hard work, ingenuity, ruthless persistence in the face of obstacles, and a blindingly intense single-mindedness. But there is a dark side to these qualities of entrepreneurial determination, which he also embodied. Not least was his spectacular failure to have any awareness of his own limits and his total neglect of succession management.

Henry Ford was born in Dearborn, Michigan in 1863, eldest son of Mary and William Ford. He was educated locally and at an early age developed an interest in engineering. His mother encouraged Henry’s passion, letting him use her darning needles to make screwdrivers for fixing timepieces. When Mary died while giving birth to the Ford’s ninth child, the family was devastated. Young Henry had lost his chief supporter. Driven by his passion, the young man worked days and nights on his inventions and studied in his spare time to acquire the business skills that he thought he would need to succeed. He fought hard, often against the odds, becoming one of the greatest entrepreneurs of his era. Through his focused determination he established the automobile industry in North America, arguably initiating a new era in the industrialized world.

But he was an obsessive personality, a sort of ‘mad genius’. It was his practice to take all the credit for the company’s successes, giving no recognition to the contributions of others, even decreeing that press releases from the organization would only mention his name. After the Great Depression, when Ford’s high-wage policy was no longer tenable and labour negotiations got tough, Henry Ford became a bête noire of the unions. Later in life his obstinacy never subsided; to the last he was rejecting change in the business long after it had become a necessity.

His life embodied these contrasts. He pioneered the introduction of mass-produced automobiles, transforming society, and even earning within industrial sociology, an ‘ism’ – ‘Fordism’ – for the mass- production factory system that was imitated throughout the industrialized world. Yet he was a stubborn man who wouldn’t take no for an answer. During the Second World War he was tarred with the brush of being a Nazi sympathizer, partly because he vetoed his son’s decision to support the war effort by producing Rolls-Royce aero engines for the British. Later in life, his persistence became his Achilles’ heel – following his gut instincts to stick to outdated policies. The best-known example, perhaps, was his stubborn insistence that the company produce only one model of car. Ford, a victim of his own iconography, was blinded to how fast the market for automobiles and public preferences were changing. He left the door wide open for General Motors to steal market leadership from under the company’s nose.

EDSEL

Born as the son of this legendary father, Edsel Ford’s challenge to achieve distinction was enormous from the outset. For sons of towering figures the best advice is, get out from under the shadow: which means, take an independent path and find your own way to make a mark. But Henry’s looming presence was more than a shadow. It could grip, and so it did. Edsel’s father anointed him very early on as his successor to lead the Ford Motor company. Henry forbade his son from enlisting to fight in the First World War on the grounds that he was needed for the business. From a very early stage it became a certainty that Edsel would join the family firm, which he did on leaving high school. Henry didn’t want his son to go to college. He claimed that his own success proved that work experience was more important than education. Yet the most important experience Edsel needed for success in business was denied to him by his father, and that was experience of real power. Throughout his career Edsel was the executive who was the boss’s son.

Henry’s refusal to countenance strategy change, and his deafness to the advice of people around him, was the backdrop to the family tragedy that was to unfold. In the early 1920s, under pressure from the rapid growth of GM’s Chevrolet brand, spearheaded by Bill Knudsen, a former Ford executive whom Henry had let go because he thought he was ‘too good’ for Ford, Edsel commissioned a redesign of the Model T car. His father reacted strongly against his son’s plan and ordered him to ‘rub it out’. In awe of Henry’s fearsome wrath, Edsel backed off, putting on hold any more initiatives to modernize. Henry undoubtedly loved his son, but could never let go any opportunity to put Edsel down, in private or in public. Try as he might to act out the role of president, Edsel was faced with the choice of either fighting his father openly or pursuing peace by disengaging. A more sensitive soul than his father, he chose the latter path of least resistance. Edsel adjusted his priorities, backed off from the company and focused on his private life. He had decided that he couldn’t shake off the malign influence of his father, and as long as he was at work he continued to be a victim of his father’s erratic behavior. Colleagues came to appreciate Edsel’s qualities. Despite being the perpetual crown prince, they admired his integrity in seeking to champion better labour relations. But Edsel’s escape routes from his father included a taste for alcohol, and his fondness for drink started to take a toll on his health. In 1943, just before he turned 50, Edsel passed away from cancer. Henry had lost his only son, leaving a bitter void in his heart and his life.

HENRY HUNKERS DOWN

The Ford dynasty however was not yet finished, and Henry acted to reassert his power, by firing many of Edsel’s supporters and associates. Perhaps he needed to shake off the sense of loss, following his son’s death. Meanwhile, his inflexibility and outdated business ideas were more than ever hampering the business. There was a crying need for fresh leadership but Henry’s response was a step backwards, elevating one of his old cronies, Harry Bennett, to be his right-hand man. Perhaps what attracted the ageing patriarch to Bennett was the image of strength that he felt had drained from himself. Bennett had a ruthless gangsterlike image. He would be the company’s tough guy; Rasputin to the ageing Tsar. Meanwhile the Ford dynasty was continuing, with the third generation now joining the company. First, Edsel’s eldest son Benson joined the firm, followed in 1941 by his younger brother, Henry II. Henry was much more talented than his elder brother. Henry senior recognized this capability in his grandson and reacted to it negatively, again as a neurotic fear of threat to his familial supremacy. First, the old man tried to freeze his grandson’s progress, ignoring him when he showed up for work; and even preventing him from moving into his late father’s office. Henry II for his part was driven by a need to make amends for his father’s crushed career at Ford, which he suspected might have led to Edsel’s premature death. Henry II and his mother blamed grandfather Henry for this tragedy. But Pearl Harbor and America’s declaration of war intervened to put this emerging drama on hold, as both brothers were drawn into service. Meanwhile the war at Ford had barely started.

YEAR OF THE LONG KNIVES

The battle for succession sprang to life in 1945 in the form of an outright confrontation between Henry’s protégé Bennett and Henry II. During the previous year a codicil to the founder’s will had come to light that established a trust to control Henry’s shares after his death for a full decade. The secretary to the trust was none other than Bennett. Henry II, seeing his career at Ford soon coming to an end, confronted Bennett. The battle lines were clearly drawn. On the one side was Bennett, the non-family leader and company heavy, backed by the immovable presence of patriarch Henry. In the other camp was the young scion Henry II with the support of much of the family. At a meeting the following day Bennett stunned everyone by publicly putting a match to the trust document. The odds were no longer stacked against the next generation.

Thus far the younger generations had avoided confrontation with the founder, but now they sensed that the moment for change had arrived. It was Edsel’s widow Eleanor, controlling over 40 per cent of the shares inherited after her husband’s death, who delivered the ultimatum to Henry. Abandoning her deference to her father-in-law she gave him an ultimatum – either hand over power or she would sell her shares. It also helped that the founder’s wife Clara had lectured Henry that he was destroying any hope of family unity by opposing his grandson. Henry, effectively cornered, reluctantly conceded the appointment of his grandson to the presidency of the company. However Henry II would only accept on the condition that he could ‘make any change I want to make’. His grandfather bristled but had no choice. At a board meeting the following day a letter of resignation that Henry II had ordered to be prepared for his grandfather was read out. Henry, a frail and crushed man, did not go quietly. He even shed tears in public. His business life had ended, and two years later, with nothing left to live for, his corporal life ended. He died at home on 7 April 1947 at the age of 84.