Once Upon a Car Part 3

He made the announcement in a closed-circuit television address to GM employees around the world. Wagoner's opening remarks set a grave tone. "We are at a critical juncture in our company's history," he said. Drastic measures were necessary. GM, he said, would accelerate a broad cost-cutting effort that included reducing jobs and closing plants. The company was also considering selling off control of its single most profitable unit-the General Motors Acceptance Corporation financing arm that made car and mortgage loans-as a way of raising desperately needed cash. But the centerpiece of the turnaround plan was the health care deal.

"We've all got bags under our eyes," Wagoner joked about the marathon talks. He praised Gettelfinger and d.i.c.k Shoemaker for their "cooperative, problem-solving spirit" but never mentioned that GM had been prepared to cut benefits unilaterally if the union hadn't stepped up. "Frankly, these are challenging times for both of us," he said wearily, "and we are both being called upon to address issues that are difficult."

Gettelfinger, however, wasn't so forgiving about the decision he had to make. Later in the day, he released a one-sentence statement. "The tentative agreement on health care matters is the result of an in-depth a.n.a.lysis of GM's financial situation and many weeks of intense discussion between the UAW and GM," he said. The implication was clear: GM was in such bad shape he had no choice but to make a deal.

Between the health care savings and other cutbacks, GM expected to shrink its annual operating costs in North America by $5 billion a year. This was its biggest one-time reduction ever. Reporters pressed Wagoner to go further, to predict the future. Were all these changes enough to finally fix GM?

But Wagoner wouldn't bite on that one. "We'll see," he said. "But I think for today, this is a heck of a first step."

It was indeed a big step. Outsiders had no idea how tough it had been to get the union to do a deal of this magnitude in the middle of a four-year contract. It was the first piece of positive news at GM all year.

Unfortunately, Rick Wagoner wouldn't get much time to savor it.

At eleven o'clock the next morning, Jerry York was waiting outside his office. The two men hardly knew each other except by reputation. Wagoner was very wary of York. He had been thoroughly briefed by his staff on how York had spearheaded Kirk Kerkorian's efforts to manipulate Chrysler in the 1990s. Kerkorian now owned fifty-six million shares of GM stock, which was just short of 10 percent of the whole company.

He was also in a pretty deep hole. With GM shares now trading in the low $20 range because of the company's poor earnings and the trouble at Delphi, Kerkorian had lost more than $300 million on his investment. He might have been patient with GM a few months earlier, but he wouldn't be anymore.

When York sat down across from Wagoner, he was exceedingly polite but also clear about his mission: he wanted Wagoner to meet with Kerkorian in Las Vegas. For a brief moment Wagoner seemed tongue-tied. He hemmed and hawed, but there was no polite way he could refuse a meeting with one of his biggest shareholders. Sure, he would see Kerkorian. No problem. Check the calendar and set it up, he said. Good, replied York. And then he was gone.

As he walked out of the GM Renaissance Center, York dialed Kerkorian on his cell phone. "Okay, we're on," York said. "I have to say, though, Rick didn't exude much enthusiasm."

Chapter Eight.

In late October, Jerry York flew into McCarran International Airport in Las Vegas in his private plane for the meeting with Kerkorian and Wagoner. He brought along a ton of press clippings and GM financial statements to read on the ride. York was pleased that Wagoner had gone toe-to-toe with the UAW on health care. "A confrontation with the union was inevitable," he had told Kerkorian over the phone. "But I don't think they went far enough."

That was his general conclusion about the company's plan. "They're nibbling around the edges," he told Kerkorian. "They've got tons of middle management and too many brands and they just won't cut them."

York approved of Steve Miller's radical moves at Delphi but not his scathing attacks on the workers. He didn't, however, think GM needed Chapter 11 to restructure. What GM needed, York believed, was an alternative to Rick Wagoner-a cool and collected outsider with a point-by-point plan to streamline operations and repair the company's balance sheet. GM was so full of itself, so hierarchical and insular, that Wagoner and his deputies were incapable of admitting the ship was going down. And how could they? They had set this course. They were bred to defend its past. Without a shock to the system, Wagoner and his board would not deviate from this agonizingly slow, incremental turnaround strategy that was not producing results.

By York's calculations, General Motors was spending $24 million more every day than the company took in. That could not go on forever. GM simply had too many mouths to feed. Brands such as Saab, Hummer, and Saturn consumed mountains of cash and consistently lost money. GM employed battalions of marketing and public relations people to justify its bloated product lineup-too many plants building too many cars that too few people cared about. "I hear they have six hundred people in PR," York said to a friend in Detroit. "What the f.u.c.k do you do with six hundred PR people?" York saw waste everywhere, from the roster of seventy vice presidents to the $2 annual dividend that the company had no business paying when it was losing its shirt.

Most of all, York was turned off by Wagoner's ever-polite, gentlemanly, above-it-all leadership style. He had worked side by side with some of the most aggressive CEOs in modern American history: Lee Iacocca at Chrysler, Lou Gerstner at IBM, Steve Jobs at Apple. Those guys stepped it up in a crisis. York was convinced that GM could do better, lots better, than Rick Wagoner.

This was a delicate juncture. Kerkorian and York had to play their hand carefully. If they pushed too hard, GM would circle the wagons and fight them the way Chrysler had done ten years earlier. York needed to get on the inside, to ask the hard questions and crack the facade that Wagoner and his team had all the answers. He had the credentials: twenty-nine years of experience in the auto industry, a stellar reputation on Wall Street, and the deep respect of inst.i.tutional investors. Still, he was under no illusions about the size of the task ahead.

This was GM they were taking on-the most inbred, hidebound corporate culture of them all, a virtual block of granite of tradition and resistance. With his thinning blond hair, oversize gla.s.ses, and mellow Tennessee drawl, York hardly seemed like a crusader ready to start a revolution. He was sixty-seven years old and independently wealthy, but behind the mild-mannered exterior was a fiercely compet.i.tive and astute businessman. Jerome B. York lived for big challenges, and there was none bigger than overhauling General Motors.

As he drove down the Las Vegas Strip, York pa.s.sed the mammoth emerald-green MGM Grand Hotel and Casino, the cornerstone of Kerkorian's gaming empire. He never forgot the first time he'd seen it, when it was under construction in the early 1990s and he was in Vegas for a big meeting between Chrysler and the leaders of the United Auto Workers. "I was in a cab and I asked the driver, what's that big hole in the ground?" York said. "And he told me that was going to be the new MGM Grand." With the MGM as the nucleus, Kerkorian a.s.sembled the biggest casino company in the world. And ever since going to work for him a few years later, York was in awe of his boss's vision, instincts, and daring. "That f.u.c.king hole in the ground is worth $10 billion today," he said. "Kirk is a builder. He sees what's possible. He sees what others don't."

Kerkorian was dapper as usual in a checked sport coat, starched white shirt, and silk pocket square when York met him at the MGM Mirage corporate offices in the Bellagio, another one of his boss's glittering Vegas properties. About an hour later, Wagoner stepped out of one of six black Cadillac Escalades at the front of the hotel. When he came in, York, Kerkorian, and couple of other executives greeted him. They adjourned to a conference room and talked for a few minutes about the car market, the economy, and a few other safe subjects. Then Kerkorian, who had barely said a word, spoke up. "Rick. I'd like to meet with you privately," he said.

The others left, and Kerkorian cut to the chase. "Rick, I'd like to have Jerry join the GM board of directors," he said. "I think he could be really helpful to you."

Wagoner found Kerkorian polite and soft-spoken, and thought that he looked great for a man who had just turned eighty-eight years old. This wouldn't be a long conversation. Wagoner had already decided that a board seat for York was not worth fighting over with a billionaire who owned 9.9 percent of General Motors.

"It would be okay with me, but I need to put this before the rest of the board," Wagoner said. "Maybe Jerry would meet with a couple of our directors and see how that goes."

Fine, said Kerkorian, he'd like that very much. York would be a great director, he a.s.sured Wagoner.

A couple of days later, two senior GM directors, George Fisher and John Bryan, traveled to Los Angeles to discuss the terms of York's addition to the board. Bryan, the retired chief executive of the Sara Lee Corporation, had been rough on Wagoner during the health care talks. He believed GM was so vulnerable to a labor strike that management was always on the defensive with the union. Maybe York could help them figure a way to change that.

Still, Bryan was torn about giving Kerkorian an entree into the inner circle of the boardroom. "The thought was he wants to take us over on the cheap, and that Jerry was coaxing him into buying General Motors," Bryan said. But like Wagoner, it was difficult for Fisher and Bryan to deny a huge shareholder representation on the board. It might take some time, but they were willing to do it. "The judgment was made," Bryan said, "to let the fox into the henhouse."

Delphi's first offer to the UAW was brutal-wages as low as $9.50 an hour, major cuts in health care, no profit sharing or cost-of-living raises, pensions frozen or eliminated. "There is no alternative," the company declared in its six-page proposal. "Unless Delphi can transform its U.S. operations, they will cease to exist." Miller was trying to land a knockout punch at the opening bell.

But the union had no intention of going down. "There is no way the UAW is going to accept this," said Skip Dziedzic, president of UAW Local 1866 in Oak Creek, Wisconsin. "If Mr. Miller is looking for a fight, I think he is going to get one." The Battle of Delphi had begun.

When Delphi relented slightly and raised its base wage offer to between $10 and $12 an hour, Ron Gettelfinger wouldn't respond. He flat-out refused to bring it to the union membership. "It's insulting," he said. "It's not even worthy of a vote." In his view, Miller was baiting him into rejecting everything Delphi put on the table so that the company could argue in court that the UAW was unwilling to negotiate.

This wasn't a respectful bargaining process, like the one the union went through with GM on health care. This was a bare-knuckled a.s.sault on labor, and Gettelfinger was ready to brawl. "We are on a collision course with them," he said. "This isn't just an attack on the people in this union. It's an attack on communities across this country."

Informational picket lines went up outside Delphi plants. Workers pa.s.sed out leaflets comparing the million-dollar bonuses for executives to the hardship on a family whose household income would fall to $21,000 a year under the company's hard-line offers. The fees that Delphi was paying its corporate attorneys and advisors incited the rank and file even more-$835 an hour for its lead law firm, $250,000 a month for its investment banker, $55 an hour for one consultant hired to process bankruptcy-related paperwork. "And the company is griping about paying us $26 an hour?" said Maureen Whitney, a Delphi worker on the picket line outside a plant in Flint, Michigan.

Internal company doc.u.ments had begun to leak out about factory closings. One doc.u.ment, code-named North Star, said Delphi planned to "execute ruthless portfolio management" on its U.S. facilities. If Miller got his way, the company's thirty-three thousand union jobs would be whittled down to ten thousand or less within three years.

When it was at the peak of its power, GM was the most vertically integrated automaker anywhere. Countless people earned a living off the production of the humble parts composed of plastic, steel, and rubber that make up a car. In the 1980s, the company woke up and realized that union labor was too expensive to sew seat covers or bundle wiring harnesses. Those tasks could be performed just as well at a fraction of the cost in Mexico and other low-wage nations.

GM got tired of fighting with the UAW over every plant it closed, and in 1999 it spun off its entire parts division to create Delphi. Now the corporate offspring had the same problems as the parent. Delphi wanted to keep its high-profit, sophisticated guidance and safety systems and electronics products. But it couldn't get rid of the low-tech stuff fast enough. One of the factories targeted for closure in Project North Star was Flint East, once the hub of a sprawling network of parts plants that employed fourteen thousand workers. Now there were only twenty-eight hundred workers left, making spark plugs, air filters, and other basic components that were already being manufactured for half the cost in China and India.

In the early days of the bankruptcy, Miller paid a surprise visit to Flint East. Clad in a blue shirt and pullover sweater, he walked the floor of the aged plant, some sections of which were a hundred years old. At one point he stopped at the workstation of Rebecca Oelfke, a thirty-two-year-old quality inspector on a line that made fuel-level monitors for GM trucks and SUVs. With her Delphi paycheck and benefits, Oelfke supported two young sons and a husband stricken with multiple sclerosis.

"This job is our livelihood," she told Miller. "I want you to know how you're affecting my family and all of us here." Miller listened intently and a.s.sured her that he would do what he could to save the plant-even though he knew there was no way Delphi was keeping Flint East.

"Parts like this are going to be made in low-wage countries and there's nothing we can do about it," he said afterward.

Union officials were irate at Miller's expressing empathy to workers when he had already made up his mind to close their plant. "He's bulls.h.i.tting people, and it's sickening," said d.i.c.k Shoemaker, the UAW vice president.

Delphi was the harbinger of what the union had feared for years-a monumental restructuring of Detroit. When the Big Three dominated the U.S. market, General Motors, Ford, and Chrysler were primarily focused on gaining advantages over one another. GM's ownership of its own parts plants was considered an a.s.set back then. Those days were long gone. GM and every other car company were constantly trying to drive costs down, to buy components from the cheapest source possible and still produce a quality vehicle. And the true commodity-type products-hoses, fasteners, wires, even spark plugs-were pouring in from Asia and the former Soviet bloc nations in Europe. Even Mexico was getting undercut on wages by the Third World.

But the more distressing trend for the American autoworker was the steady, consistent decline in U.S. sales by the Detroit companies. GM was growing in China, South America, the Middle East, and Africa. But it was losing sales every month in its home market to the j.a.panese and more recently the Korean carmakers. The costs a.s.sociated with union labor kept rising, particularly health care for retirees. Meanwhile, the compet.i.tion kept growing stronger. GM could outsell Ford all it wanted and still lose out to the high-quality Toyotas and Nissans flooding the marketplace. It wasn't a zero-sum game. The American companies were being swamped in their own backyard. And with each percentage point of market share lost, thousands of union jobs became a burden that GM, Ford, and Chrysler could no longer afford.

The rhetoric was harsher at Delphi and the confrontation uglier, but the stakes were higher at GM as Rick Wagoner and his board grappled with what to do with too many factories and too many workers. There was really only one way to go, and it would be painful.

On November 21, 2005, General Motors announced the deepest cuts in its North American workforce since the recession of the early 1990s. At a press conference at GM headquarters, Wagoner said the company would slash thirty thousand jobs and close down nine factories, including four big a.s.sembly plants located in Oklahoma, Georgia, Michigan, and Ontario, Canada. The shutdowns would eliminate a million vehicles from GM's annual production, nearly one-fifth of its total capacity in the United States, Canada, and Mexico. White-collar jobs were in jeopardy too, and as many as six thousand would be cut in the year ahead. In the most important address of his career, Wagoner said this dose of "tough medicine" would cure the ills threatening to topple the company. The only way GM could survive was by cutting loose people and plants that it could no longer support with its dwindling sales.

Still, Wagoner would not ever consider bankruptcy as an option. "We're not taking these actions to relieve pressure," he said. "We're taking these actions to get the business right."

But how would GM dump thirty thousand union workers? The UAW contract technically protected those jobs. If the workers' plants closed, they were ent.i.tled to enter the swelling ranks of the so-called jobs bank, where laid-off workers collected nearly their entire paycheck until new positions opened up elsewhere. Wagoner was deliberately vague on the details, saying the cuts would be spread over the next three years through attrition, early retirements, and possibly buyouts. "We're not going to get thirty thousand people from one day to the next," he said. "But we'll get it on a c.u.mulative basis."

A huge buyout plan would be extraordinarily expensive and would definitely require the consent of the union. Ron Gettelfinger didn't sound like he was on board with any of it. "This is all extremely disappointing, unfair, and unfortunate," he said. He had given GM the health care concessions it demanded, and Steve Miller was sticking it to workers at Delphi. Now he was supposed to swallow Wagoner's lame explanation that GM's problems were all the union's responsibility? "GM's decline in market share is not the fault of workers or our communities," the union president said. "But it's those groups that will suffer because of the actions announced today."

Wagoner was as stoic as ever. He conceded that the epic job cuts were "very difficult" and acknowledged the devastating impact on workers and their families. But he saw no other choice. He was running out of time. GM could not delude itself that better days were just around the corner, that the market would rebound, or that the new cars that Bob Lutz and his team were developing would suddenly reverse years of crumbling sales.

With Kerkorian and York lurking in the shadows and Wall Street questioning his every move, Wagoner had to deliver results, and he needed to be tough, deliberate, and confident. Yet too often at times like this, he came across as isolated, detached, and chillingly mechanical. The men and women who worked with Wagoner every day unfailingly described him as a warm and sensitive human being in private, a "nice guy" who sent birthday e-mails to staff members and always asked about their families. Yet as the public face of GM, Wagoner never seemed to grasp the raw, emotional element of effective leadership. How could the vast number of people at GM believe in him if he never really acted like he cared about them?

Every year before the Christmas holidays, GM threw a party for the Detroit media. It was never meant to actually be fun; it was more of a quasi-social occasion that allowed reporters and editors to mingle with the top bra.s.s. The loquacious and ever-quotable Bob Lutz was usually the center of attention, holding court on any topic thrown his way. But this year, even Lutz was conscious of the stress enveloping GM. He had printed up little cards for himself and his fellow executives with tongue-in-cheek instructions on how to keep the media at bay. "If you are asked something that you should not, cannot or do not want to answer, there's nothing wrong with politely declining to discuss the subject," the card said. "The key is not to react defensively." Of course, after reading his card aloud to a group of reporters, Lutz couldn't resist talking all night long.

Wagoner didn't need any guidance to be on guard with the media. Almost always, he resolutely controlled his comments and never revealed anything beyond the carefully vetted corporate line. But on this night, something happened. One question kept coming and coming. What about the people who would suffer because of GM's woeful condition? How did he feel inside about telling thirty thousand workers they had to give up their jobs to save General Motors? For an instant, Wagoner's armor of self-restraint cracked.

"What do you expect me to say?" he snapped. "That I don't give a s.h.i.t about them? That I feel like s.h.i.t about closing plants? We don't do this stuff because we like it. You want me to feel bad about it? Well, I feel bad."

The GM public relations people looked stunned. Other staffers around Wagoner stared at him in disbelief. Then, as quickly as he had let loose, Wagoner pulled back. He composed himself and singled out the reporter who had broken the unwritten rule: nothing personal.

"Come on, that's not fair," he said. "You know better than to be asking me stuff like that."

It was January 10, 2006, and the ballroom at the Marriott in the GM Renaissance Center buzzed in antic.i.p.ation of the guest speaker at the annual gathering of auto a.n.a.lysts. Usually the Detroit auto show was all about new products, and there had been plenty unveiled during the week. But this event had overshadowed everything else.

When Jerry York entered the ballroom with his wife, Eilene, at his side, a half dozen camera crews descended on them. The bright lights followed the couple, illuminating York in a white glare as he shook hands and said his h.e.l.los. Eilene York wondered when her husband had become so famous to be treated like a movie star. But this was high drama. York had come into GM's backyard and was about to go public for the first time about Kerkorian's investment. This was his one shot to tell the world that there was a better way to run GM. And when he was done, n.o.body in the auto industry-not even Rick Wagoner-could say they hadn't heard him.

He t.i.tled his speech "General Motors at a Fork in the Road." The crisis at Delphi, York said to the hushed room, was just the beginning. GM and the entire domestic auto industry were at a fateful crossroads. "The wrong fork," York said, "is the one that a.s.sumes that 'better products' and 'some capacity reduction' are about all that is needed-that the companies, their employees, and their unions can continue doing business in other respects pretty much as they have been."

This was not nearly enough, he said. The "right fork" required change, big change. "All of the old ways of doing business have to be scrutinized," York said, "recognizing that some aspects of the business that were affordable a decade ago are no longer economically possible." While he mentioned Wagoner by name only once or twice, his point couldn't be sharper. GM, York declared, was facing insolvency in a thousand days if management did not shift immediately into what he called "crisis mode." If it failed to do so, General Motors was headed in the same direction as the steel and railroad and airline industries: bankruptcy.

York's voice rose and fell like a preacher's giving a sermon. No more sacred cows, no more halfway measures. Sell brands such as Saab and Hummer that can't carry their own weight. Cut unneeded operations to the core. Whack the $2 annual dividend to shareholders in half. Slice the salaries of the top earners-starting with the board of directors and the senior officers of the corporation. Above all, York called for a "sense of purpose," "a degree of urgency," and an acknowledgment that "time is of the essence." He was laying down a challenge and stirring up the deep reservoir of pride and pa.s.sion that had once made Detroit the most dynamic industrial engine on earth. The cynics, York said, were convinced it could never come back, that its glory days were ancient history, that the domestic auto industry was fatally wounded and headed for destruction.

"But can't we prove them wrong?" he said. "Can't we just grab hold of the steering wheel and make sure this industry gets headed down that right fork in the road? I think we can-or I wouldn't be standing up here this afternoon!"

When he finished, the applause was deafening. Even the GM executives in the front row stood and clapped. The camera crews and journalists were already lining up to get their turn for interviews. York was tingling and allowed himself a small, satisfied smile. "I knew," he told a confidant later that day, "that I would get their attention."

Chapter Nine.

Once the conflicts were out in the open, the tension inside General Motors seemed to release like steam from a boiling kettle.

After provoking the United Auto Workers to the brink of a strike, Steve Miller abruptly retreated. Instead of pet.i.tioning the bankruptcy judge to void its union contracts, Delphi requested a six-month extension to file a reorganization plan in hopes that some compromise could be reached with the UAW.

In public appearances, Ron Gettelfinger a.s.sailed the General Motors job cuts. But behind closed doors, he quietly began negotiating with GM for an unprecedented package of cash buyouts for workers.

And shortly after Jerry York laid into GM for failing to step up and attack its problems, the company's board of directors graciously invited him to join their ranks.

General Motors ended 2005 with an $8.6 billion loss for the year, the second biggest in its ninety-eight-year history. Forty percent of the red ink was from charges taken in advance for the pending plant closures and to cover a portion of pension benefits owed to former GM workers at Delphi. At a somber press conference, Wagoner called it "one of the most difficult years" the company had ever had. He didn't even try to put a positive spin on the numbers. "It was a year," he said, "in which two significant fundamental weaknesses were fully exposed-our huge legacy cost burden and our inability to adjust structural costs in North America."

Wall Street pounded GM's stock, driving the price down to $23 a share. a.n.a.lysts seemed resigned to a long, rough road ahead. "We believe things will get worse before they get better," said John Murphy of Merrill Lynch.

But at least GM's enormous issues were on the table. There was no hiding them anymore and no excuse for avoiding them. The "fundamental weaknesses" that Wagoner referred to could kill the company. Unless it succeeded in reducing its costs by billions and billions of dollars, there would never be an opportunity to prove it could still make world-cla.s.s cars. GM's critics wondered whether the harsh, new reality would finally end its inst.i.tutional arrogance and knock the company off the imaginary pedestal it no longer deserved.

The biggest auto company in the world was now, in terms of financial performance, the worst. Even its new chief financial officer, Fritz Henderson, conceded as much during a conference call with a.n.a.lysts. "It was a thoroughly forgettable year," Henderson said. "There are no highlights, really."

The implosion at GM was a loud wake-up call for the Ford Motor Company. Bill Ford knew how fortunate he was that his company was treading water while GM sank like a rock. Ford managed to earn $2 billion in 2005, despite losing another big chunk of market share in the United States. But those profits were hardly solid. The company lost nearly $4 billion on its automotive operations. All the money it made came from Ford Credit, its finance division. Financially, Ford was preparing for the worst by h.o.a.rding cash. It finished the year with $25 billion in the bank versus the $20 billion that GM had.

And even though GM's breakthrough with the UAW paved the way for Ford to have the same deal, the company was still heading in the same miserable direction as GM. For one, Ford had waited far too long to address its own overcapacity issues. It had enough factories in North America to build 4.8 million cars and trucks a year.Unfortunately, it sold only 3.3 million in the region during 2005. Though it made money in Europe, Asia, and South America, the core operations in its home market had become a black hole. Jim Padilla, Ford's president and Bill Ford's right-hand man, had not distinguished himself as anything other than what he was-an old-line manufacturing exec who rode herd on the plants, coerced suppliers into cutting their prices, and bargained hard with the UAW. The other key player in the executive suite was Don Leclair, an abrasive but brilliant number cruncher who wielded tremendous power as the chief financial officer. They were an intimidating pair, but neither one was the leader Bill Ford was desperate for.

There was one executive, however, who showed real promise, someone Bill thought he could trust to make hard, smart decisions before things really got ugly. Ford had studied dozens of executives in the company, and one stood out: Mark Fields, the forty-four-year-old head of Ford of Europe.

Born in Brooklyn, raised in New Jersey, trained at Harvard Business School, and recruited from IBM, Fields was ambitious and successful, and he worked fourteen-hour days wherever Ford put him. He had been with the company for seventeen years. His first job had been designing marketing plans for the Thunderbird, and Fields learned quickly how Ford was ruled by pay grades, status, and t.i.tles. The first time he raised his hand in a big meeting, he was shot down by his boss. "It was like, 'You said something at the meeting,'" Fields recalled. "'You never say anything until you tell your manager.'"

But Fields had good ideas and refused to keep his mouth shut. He attacked problems. Coworkers underestimated his drive and work ethic because he looked smooth in sharp suits, combed his thick black hair in a mullet, and had movie-star good looks. But Fields was a natural leader and a lot tougher than people gave him credit for. He thrived in the grind of meetings with the product planners, advertising agencies, and especially the sharp-elbowed finance guys. When Fields was knocked down, he always got up stronger. "I have an inability to accept defeat," he said. "I really believe that no matter what, we will get it done."

He also loved the car business-the scale, the power, and especially the product. There was nothing like working on a new model from the early design stages to the day when thousands of finished vehicles rolled off the a.s.sembly line and into the showroom. "There's something intoxicating in how a car comes together and is brought to market," Fields said. "It's a male thing. We can't create life, but we can create a car."

Fields moved quickly through Ford's marketing department but was destined for bigger, operational jobs. He held several positions in North and South America before landing as the managing director of Ford Argentina. Then in 1998, he received orders from headquarters to move to j.a.pan to become the head of sales and marketing for Mazda. Ford owned one-third of Mazda, which was losing tons of money. But this time Fields didn't want to move. He was just getting started in Argentina. "I'm not asking you to go," said Jacques Na.s.ser, head of Ford's global auto operations. "I'm telling you." It turned out to be a career-changing a.s.signment. Fields may have been c.o.c.ky at times, but he made things happen. He took a debt-ridden j.a.panese automaker with dire prospects and made it profitable and exciting to be around. In two years, Fields was the president of Mazda, and an industry sensation as the first American executive to run a car company in j.a.pan.

In return, Dearborn promoted him again-this time to take over Europe and run the luxury brands that were draining billions from Ford's bottom line.

Now he was truly in the big leagues, and he was ready to shake things up. Every country had its own management fiefdom at Ford, whether it was England, Germany, or Sweden. Then there were the brands-Volvo, Jaguar, Land Rover, and Aston Martin, each with its own vehicles, factories, offices, and chief executives. And they all had excuses for why Ford couldn't make money in Europe. Bringing order to this mess would be a huge challenge.

That was fine with Fields. He considered himself a troubleshooter of the highest order. "Every a.s.signment the company gave me was a really s.h.i.tty situation that had to be fixed," he said. "It's a great platform to get people to change." The stuffy European executives at Ford were not at all comfortable with Fields and his hyperagenda of ninety-day plans, budget reviews, and strict deadlines. He went to work in Cologne or London or wherever he was at 5:00 A.M., and was on the run until late into the night.

To drive home the message that a new sheriff was in town, Fields put Ford's four-story London town house up for sale right after it had been renovated and furnished with millions of dollars' worth of artwork and antiques. "They believed this bulls.h.i.t about how you have to live in luxury to know it," he said. "I'm saying we've got to move."

Bill Ford followed closely Fields's every move. He liked the way Fields handled himself, how he wouldn't back down from the overbearing Europeans. He especially noticed how Fields stood up to David Thursfield, the burly, six-foot-four-inch Brit who had authority over international operations and global suppliers. Thursfield had a mean reputation. Some of the executives under his control were flat-out scared of him. But Fields wouldn't be bullied. "You won't be pushing me around like everybody else," Fields said when Thursfield got in his face. Bill Ford liked that a lot. He was fed up with all the confrontation and personal agendas and resistance to change. He needed someone like Fields back home in the American car market, where Ford was really struggling.

Fields was in his London office when Bill Ford called.

"I really want you to come back and run North America and figure this thing out," Ford said. "We're in big trouble if we don't do something."

Fields hadn't expected this at all. But he didn't hesitate for an instant.

"Whatever you want me to do," he said, "I'm ready to do it."

Fields hardly knew Bill Ford. Their encounters had been limited to occasional presentations he had made at Ford board meetings. But they were about the same age, and Fields felt a natural rapport between them. He sensed that Bill needed an executive who wouldn't flatter or bulls.h.i.t him. "I didn't know Bill all that well, but I could see how everybody wanted a piece of him," Fields said. "He was being pulled in so many directions."

Fields made up his mind right then to be totally candid with Bill from the get-go. "I have two requests," he said at their first sit-down meeting in Dearborn. "First, what you should expect from me is a plan within ninety days for North and South America. You give me a deadline, and I'll give you a plan. The second thing is, I don't need a lot of interference from headquarters, especially from [CFO Don] Leclair. I can run this myself with your support."

By the end of his first week, Fields wondered what he had gotten himself into. He had been working overseas for ten years and wasn't at all prepared for the reality of Ford's decline in its home market. "From an operational fitness standpoint, I was shocked," he said. "It was like visiting my parents. I can see they're getting older."

He buried himself in the North American financial forecasts and realized that any money Ford was making came from shoving vehicles down the throats of the dealers. But if customers weren't buying, the dealers wouldn't keep swallowing more inventory. The raw numbers scared the Harvard grad in him. "This has the potential to be a f.u.c.king train wreck," Fields told his new executives. "We have to be ready for months and quarters where we are going to be down. It's going to take a long time for leaves to fall off the tree."

Then he went to his first weekly operating committee meeting. The discussions on product programs and marketing plans were substantial. Fields dug right in. But the agenda allowed only a few minutes for setting production schedules for all the factories. In a moment of clarity, Fields realized that the sales guys were driving the entire process. They didn't care that inventory was piling up; all they worried about was that the pipeline to the dealerships was always full. At one point in the meeting, Steve Lyons, the top sales executive, handed Fields a production order and expected him to just sign it. That was not happening.

"Excuse me?" said Fields. "I'm not signing this. In fact, I think we're going to change this whole process." He also b.u.t.ted heads immediately with Don Leclair. The steely chief financial officer was famous for slashing product budgets and accusing everybody of wasting money. Ford's cars were selling poorly as it was, and Fields felt that cheapening the product more would be disastrous. Meetings with Leclair and his finance wolves were always contentious and stressful. Almost everything Fields said, Leclair labeled as "stupid" or "idiotic," and then refused to talk about it more. "I don't see eye to eye on anything with this guy," Fields moaned after one session. "He just sucks the life out of the room."

But Bill Ford always had his back. Fields painstakingly put together a team of fifty people to draft a new turnaround plan for North America, and Bill vowed to support whatever they came up with. And when Fields and his people started adding up the a.s.sembly plants and said some of the company's oldest and proudest factories should be shut down forever, Bill didn't blink. As the chief executive, he couldn't let Ford slide as far as GM had. He had to move now.

The gossip around Detroit was that Bill Ford wasn't tough enough to take on the United Auto Workers, that he was too soft and sentimental to ruthlessly eliminate tens of thousands of jobs. Maybe he did need someone like Fields to carry out the dirty work. But there was no question in Bill's mind that his company had to radically shrink its operations-or suffocate from a fatal combination of higher and higher costs and weaker and weaker sales.

On January 23, 2006, Bill Ford made the announcement in one of the company's sleek design centers in Dearborn. Mark Fields, Jim Padilla, and Don Leclair were at his side. The auditorium was packed with camera crews, reporters, and Ford employees. Fields had dubbed the plan "Way Forward"-ostensibly to suggest a path to a brighter future.