Why Bill Ford Fired Himself

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The record on family run public companies is a bit mixed. On the one hand, a scion CEO from a family with a large stake in a company should have a longer time horizon than an unrelated CEO who knows he could be out the door at any moment. So there should be less short term gain asset exploitation and more investment. On the other hand, a single family is a rather small pond in which to fish for executives and the regression toward the mean tendency of genes implies that the second generation might not share the brilliance of a company’s founders. Recent studies show the record on scion CEOs isn’t great.
Daniel Gross takes a stab at what went wrong with Bill Ford, Jr’s tenure at the helm of Ford. Unfortunately, what Gross thinks went wrong with Ford is that Ford wasn’t enthusiastic about thinks Gross is enthusiastic about—environmentalism and hybrid cars—and spent to much time making money with things that Gross doesn’t like—SUVs.

Yes, the company under Bill Ford continually rolled out new models, drew up new concept cars, and introduced hybrids. But its basic business model—riding the high-margin big trucks and SUVs for all they were worth—never changed. Bill Ford continually promised long-term, game-changing business initiatives—the type you would expect from a bold, secure, forward-looking family CEO—but, like hired-gun executives, he was quick to scale back ambitions when short-term results didn't go his way. If Ford had put resources, reputation, and effort into fuel-efficiency and hybrid production, it's likely the company's results would have been even worse during the past few years. But Ford would surely be better positioned for today's environment—and for tomorrow.

This strikes us as a bit of magical thinking. If only the world conspired to make all the things we liked profitable and the things we despise money losers. Unfortunately, this isn’t the Big Rock Candy Mountain. As one of our mentors used to say, just because you like drinking whiskey doesn’t mean you should try to make your horse drink it too.
Have You Driven Out a Ford, Lately? [Slate]

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