Ford family let an outsider run the company — and avoided bankruptcy

By 2006 Ford was losing billions, posting a $254M loss in Q2 alone and a $12.6B loss for the full year; Bill Ford, a member of the founding family, had struggled for five years to turn it around.

On September 5, 2006, Ford announced that Bill Ford would stay as executive chairman but that Alan Mulally, who had led Boeing's commercial-airplane recovery, would become president and CEO — the first outsider in the job.

Mulally mortgaged most of Ford's assets, including factories and the Blue Oval trademark, to borrow $23.6B in late 2006. Ford used the cash to fund restructuring, avoided bankruptcy and government aid, and posted $2.7B profit in 2009 and $6.6B in 2010.

Ford mortgaged its assets for $23.6B, avoided bankruptcy and government aid, and turned a $12.6B loss in 2006 into $2.7B profit in 2009 and $6.6B in 2010.

Bill Ford recognized he was not the best CEO for the turnaround and hired a proven outsider.

The $23.6B mortgage funded restructuring before the 2008 credit crisis made borrowing impossible.

Family control through Class B shares let management make painful long-term decisions.

Mulally's One Ford plan unified the company and focused it on a coherent product lineup.

A family owner can save the firm by separating ownership from management: keep control, but hire the best operator available, and let long-term ownership justify painful short-term bets.

Ford never entered bankruptcy and did not take the government aid that GM and Chrysler received. Mulally retired in 2014 having restored Ford to investment-grade status, and the Ford family retained its special voting control through the Class B shares.