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At about $100 million a plane, Mulally would have to sell some 200 of the new jetliners to save Boeing from ruin. A year after United Airlines took delivery of the first one in 1995, the order tally was already approaching 300. Boeing logged its 500th order four years after that. The 777 would become one of Boeing’s most successful—and profitable—aircraft ever. It would also make Alan Mulally a star.

When Boeing merged with McDonnell Douglas in 1997, he was given the unenviable task of weaving together the two companies’ space and defense businesses. Some in the industry wondered if that was even possible, particularly for a man with no military background. But Mulally did it. Then he was called on to save Boeing once again.

Despite the success of Mulally’s 777, the company found itself in serious trouble by 1998. Banking on the success of the new wide-body, the commercial aviation division had launched an ambitious growth program with the aim of doubling production. Instead, Boeing’s supply chain collapsed and work at its factories stopped completely. The company reported its first loss in fifty years. The group’s president, Ron Woodard, was fired, and Mulally was tapped to replace him. Mulally began a radical reformation of the Commercial Airplanes Group. Declaring that “you can’t manage a secret,” he ordered his senior managers to compile every possible piece of data about the company’s operations, organize it all into easy-to-read charts and tables, and present their findings in daylong problem-solving sessions held every Thursday. Based on this information, Mulally and his team quickly developed a restructuring plan. They streamlined every aspect of the group’s operations, cut thousands of jobs, and outsourced work that did not have to be done in-house. A year later, the division was profitable again and setting
new production records.

Mulally was named CEO of the commercial aircraft division in 2001, just a few months before terrorists hijacked four of its planes and used them to attack the World Trade Center and the Pentagon.
The attacks would prove devastating to Boeing as well. Over the next several months, half of Boeing’s orders were canceled or delayed. Airbus soared past Boeing to become the largest commercial jet manufacturer in the world. Mulally responded by slashing Boeing’s workforce in half and outsourcing even more production. He also streamlined the company’s product portfolio, canceled programs that no longer made sense, and used the money he saved to invest in the most advanced commercial airliner ever: the Boeing 787.

Dubbed the “Dreamliner,” this was a paradigm-shifting plane that promised to make air travel easier, cheaper, and less damaging to the environment. The 787 was designed to be 20 percent more fuel-efficient than the 767, which carries about the same number of passengers. That translated into lower greenhouse gas emissions and operating costs for the airlines. The 787 was also designed to break the hub-and-spoke model—which had long dominated civilian air transportation, to the chagrin of passengers everywhere—by encouraging more point-to-point flights. The airlines were impressed, and Boeing was soon on the rebound as airlines lined up to place orders for the new jet. Mulally’s promotion to CEO of the entire company seemed only to be a matter of time.

That job now belonged to his mentor, Philip Condit. But at the end of 2003, Condit was forced to resign in the wake of a controversy involving U.S. Air Force contracts. Less than two years later, his replacement, Harry Stonecipher, was also forced to resign after it was discovered that he was having an affair with another Boeing executive. Neither of these scandals had anything to do with Mulally, and it was assumed that he would be named Boeing’s new chief executive once the board had a chance to catch its breath. But Boeing’s biggest customer, the U.S. Department of Defense, was getting tired of the headlines. The Pentagon told Boeing to bring in someone from outside the company to make a clean break with the past. That man was Jim McNerney, then chairman and CEO of 3M and the former head of General Electric’s aircraft engine division. Mulally, who was about to turn sixty, had been passed over.

If Mulally was devastated, he did not show it. He seemed to shrug it off just as he had the news of his color blindness. However, there
were plenty of other people who were openly indignant on his behalf. One of them was Tom Buffenbarger, the president of the International Association of Machinists and Aerospace Workers. He had led strikes against Mulally and accused him of coming at his members “with a meat cleaver” after September 11, but he said Mulally deserved the top job at Boeing and called the decision to pass him over “a crime.”

M
ulally was used to getting calls from corporate headhunters interested in his obvious managerial gifts. He usually dismissed them out of hand. He was only interested in building airplanes. But this call was different. This one was from Ford Motor Company. It came not from a headhunter, but from board member John Thornton himself.
^*
And Thornton was calling to tell Mulally that William Clay Ford Jr. wanted to talk to him about running his company.

Bill Ford, the great-grandson of Henry Ford himself, wants to speak to me
, he thought as he hung up the telephone.
What an honor!

The Mulallys’ home was being remodeled, so he had moved his family into a small apartment. Mulally had claimed a tiny bedroom as his home office, and he sat there now, staring up at the ceiling, awed by the opportunity that had just been presented to him. Ford Motor Company. If there was a more powerful symbol of American manufacturing might, he could not think of it. Ford was the company that brought the automobile to the masses, created the moving assembly line, and lifted factory workers out of poverty. Mulally thought back to the old Ford pickups that were as much a part of the landscape of his youth as the Kansas prairie itself. Like Boeing, Ford was a legendary name associated with legendary products. Boeing had its B-17 and 747; Ford had the Mustang and the Thunderbird. America would not be America without Bill Boeing and Henry Ford. After a few long moments, Mulally emerged from his reverie, stood up, and opened the door. His wife and son were standing outside.

“That was Ford!” Mulally beamed. “They want me to run the company.”

The Mulally clan quickly swung into action. His son Googled “Ford” on the home computer while his siblings away at college began their own research efforts. They scoured the Internet for information about the company and the Ford family, forwarding everything to their father. Mulally spent the next several days learning everything he could about the automaker. He printed out the latest financial data, product photos, and scores of recent articles. As he leafed through it all, his initial enthusiasm waned a bit. Ford may have once been a great company, but it was in deep trouble now. Reviving it would be a herculean task. But if he pulled it off, he would be a hero. And he would be a CEO.

But how can I leave Boeing?
Mulally asked himself.

Boeing was his baby. Mulally had nursed it through the ups and downs of the business cycle and an array of unprecedented challenges. After slogging it out with archrival Airbus, Boeing was about to deliver a decisive blow with its best airplane yet. How could he walk away before it was finished? Mulally was still weighing that question when Bill Ford called and asked him to come to Dearborn to hear his pitch in person.

O
n Saturday, July 29, 2006, Ford sent a Gulfstream V to pick up Mulally in Seattle. On the way to Michigan, he pored over the thick file of data he had collected on the company. The research he had been doing on Ford since that first phone call had generated a myriad of questions; he was about to meet the man who he hoped could answer most of them. Mulally began writing his questions out on the back of a copy of Ford’s most recent annual report.

The plane landed at Willow Run Airport, which had been built by Ford during World War II when the company was in the bomber business. When Mulally stuck his head out into the humid summer air, he found a driver waiting for him next to a Ford Expedition. The man took his bag and opened the rear door, but Mulally climbed into the front passenger seat. As the big sport utility vehicle navigated the
winding road through the woods near Ann Arbor, Mulally found himself growing excited. He tried to temper his enthusiasm.

I’m just here to gather information
, Mulally reminded himself.
I’m not deciding anything
.

They pulled up to Bill Ford’s gate at noon. Mulally admired the leafy estate. He recognized that he was in the domain of the truly rich. But as the Expedition pulled up to the front door, he was surprised to see the lord of the manor emerge from the front door in shorts and a polo shirt, accompanied by his wife, Lisa. Mulally surprised the Fords by greeting them with big hugs. Bill gave Mulally a brief tour of the grounds, then invited him inside. The two men sat down on couches in the spacious living room and started with football. They both knew Tod Leiweke, the CEO of the Seattle Seahawks. But they soon got down to the business of the business itself.

Ford started by outlining the history of his company, from its founding by Henry Ford, through the heady days of Hank the Deuce, to the debacle that was Jacques Nasser, culminating in his own frustrated efforts to save it. He talked about the competitive landscape—railing against Toyota, which he accused of working with the Japanese government to manipulate the yen in order to boost exports and of other devious practices. He told Mulally that the upcoming 2007 contract negotiations with the United Auto Workers would be critical to the company’s survival, and outlined the concessions he hoped to wrest from the union: wage cuts, more competitive work rules, and an end to the infamous jobs banks, where idled workers continued to collect pay and benefits—sometimes for years—while waiting for new positions to open up. If Ford could not get these concessions, it might have to move most of its production to Mexico.

Mulally seemed hooked. Clearly there were a lot of challenges facing the storied automaker. And he had a lot of questions that needed answering before he would consider taking charge of such a troubled company. But here was a chance to fight for the very soul of American manufacturing.

If I’m going to do this, I’m going to need to know everything
, he thought. So Mulally began his interrogation.

“Why are there so many brands?”

“What is the strength of the dealer network?”

“Why all these different regional organizations?”

“Why aren’t you leveraging your global assets?”

Ford was a little taken aback by Mulally’s intensity, but he answered every question Mulally put to him. He told Mulally about Nasser’s dream of building a house of brands. He acknowledged there were too many dealers, and told Mulally about his push to globalize product development.

“Until we do that, nothing else is going to work,” Ford said. “Our costs are going to be too high. Our product cadence is going to be too slow. We’re just going to fall further and further behind.”

“Why haven’t you done it already?” Mulally asked.

Ford explained that he wanted to, but was getting pushback from his executives, who saw it as a threat to their regional fiefdoms. If Mulally took the job, he would have to find a way to overcome that resistance.

“That will be the enabler to get everything else done,” Ford told him. “If you can’t do that—if we can’t get that—then we’ll just be whistling past the graveyard.”

The internal politics of Ford troubled Mulally. He asked Bill Ford for more details. Ford grabbed a piece of notebook paper and sketched out the company’s organizational structure in black pen—a family tree of sorts that listed the head of each division and showed who reported to whom. All of the lines seemed to run through Ford’s chief of staff, Steve Hamp. Mulally was shocked to see how few people reported to Ford directly.

He is too insulated
, Mulally thought as he studied the paper. Mulally was even more surprised to learn that Hamp was Ford’s brother-in-law.

Ford continued his unflinching assessment. The automaker was in deep trouble. It was being pulled apart by internal and external forces. The board of directors was actively considering selling Ford or finding another automaker to merge with. The chief financial officer, Don Leclair, was pursuing his own agenda.