Two Henrys struggle for power

A fading founder suspiciously eyes an eager grandson ... and Ford women play a key role

Despite his famous surname, Henry Ford II was not an obvious candidate to inherit the corner office at Ford Motor Co.

His academic record was, to put it gently, undistinguished. While attending Yale, Henry once paid an agency to write a term paper about novelist Thomas Hardy. According to Robert Lacey's book Ford: The Men and the Machine, Henry II submitted the term paper with the agency's bill tucked inside.

Henry II was more diligent when studying Ford Motor Co. As a young man, he studied the Rouge's operations and quizzed Ford executives about company matters. But his famous grandfather clearly did not trust him.

After the death of his son, Edsel, in 1943, Henry Ford I wanted to leave the company in the hands of his sycophantic "fixer," Harry Bennett.

During his career at the company, Bennett cannily exploited his position as Henry Ford's chief of security. His men spied on hourly workers, executives and union organizers, and he maintained links to Detroit's underworld.

After suffering a stroke in 1938, Henry Ford had become noticeably capricious. He repeatedly countermanded Edsel's orders and allowed Bennett to acquire power, despite Edsel's protests. But old Henry was unable to outmaneuver the Ford women.

Clara, Eleanor step forward

The family's matriarch, Clara Ford (Henry's wife), formed an alliance with her daughter-in-law, Eleanor Ford (Edsel's wife). Both women believed that Henry Ford had mistreated Edsel, and they were determined to protect young Henry from a similar fate.

Eleanor and Clara were deeply suspicious of Bennett, and they managed to prevent Henry Ford from naming him president. The public gained a glimpse of the family's power struggle six days after Edsel died on May 26, 1943. Edsel had been president since 1919, although Henry clearly held the company reins.

On June 1, 1943, the company promoted a batch of executives and shuffled its board of directors. Bennett gained a coveted seat on the board, but the Ford family kept him in check. Henry II and his brother Benson retained board seats, and Eleanor also was named a director. Because Eleanor controlled Edsel's 41.9 percent of Ford stock, she had clout.

At that meeting, Henry Ford I named himself president, a decision that shocked his longtime production chief, Charles Sorensen. Henry was 79, had suffered strokes in 1938 and 1941, and was in no condition to run the company. Sorensen knew Bennett would gain even more influence as Henry's mental and physical health declined.

Back from the Navy

So when Henry II arrived in Dearborn on Aug. 10, 1943, the outcome of the family power struggle was in doubt. The Navy had released Henry II from his tour of duty so he could help run his grandfather's company.

The Roosevelt administration had lobbied for Henry's release because it feared that Ford Motor's increasingly erratic founder was endangering the company's war production.

Henry II had begun studying the Rouge plant's operations before he joined the Navy. While he was at the Great Lakes Naval Training Station near Chicago, where he was awaiting orders for sea duty, he requested regular reports on Ford's operations from Sorensen's assistant.

Upon his return, Henry II found the company in disarray. In a subsequent Look magazine interview, Henry said corporate cost controls were virtually nonexistent. "Can you believe it?" Henry is quoted as saying in Ford: Decline and Rebirth by Allan Nevins and Frank Hill. "In one department they figured their costs by weighing the pile of invoices on a scale."

Major obstacles

Henry Ford II discusses plans for the Rouge complex with his grandfather in April 1944. The younger Ford, then executive vice president of the company, would become president 17 months later.

But the doddering Henry I did not trust his grandson, and Bennett considered Henry II an interloper. In 1941, Henry I wanted to banish Benson and Henry II to California, after hearing reports that they resented his treatment of their father. The family rivalry was detailed in Lacey's book and in The Fords: An American Epic by Peter Collier and David Horowitz.

The grandchildren were never dispatched to California, but Henry Ford found other ways to make his grandson feel unwanted. After Henry II left the Navy, he tried to move into his father's former office in the engineering laboratory. His grandfather ordered that the office be locked, and Henry had to move elsewhere.

Young Henry knew he wasn't ready to challenge Bennett. So he feigned friendship with his grandfather's enforcer while he quietly sought allies.

Bennett also engaged in a charade, offering to take young Henry under his wing. At one point he took Henry in his plane for a flying lesson.

The show of friendship fooled no one. Soon after Edsel died, Bennett instructed the company's chief legal adviser, I.A. Capizzi, to draw up a codicil to Henry Ford's will. According to the codicil, the company was to be managed by a trust after Henry's death. Capizzi, Sorensen and Bennett were to be key members of the trust's management team.

The trust would have run Ford for 10 years, effectively neutralizing Henry II, but the plot fell apart. In January 1944, the young Ford heir found out about the codicil. In a panic, he sought out John Bugas, Ford's director of industrial relations.

In 1941, Bugas - who was the special agent in charge of the FBI's Detroit office at the time - had uncovered the theft of Ford parts from the Rouge plant. That scandal had implicated some of Bennett's people.

Bugas arrives

John Bugas became a key ally on Henry Ford II's battle for power.

Hoping to neutralize him, Bennett hired Bugas and doubled his FBI salary.

Then Bennett instructed his subordinates to freeze out Bugas. "I was as isolated as a tuberculosis germ," Bugas later remarked.

Bugas soon sided with Henry II and became the young heir's confidant. When Henry II threatened to quit the company, Bugas calmed him. He promised to straighten out the matter and confronted Bennett in his office.

Dismayed that Henry II had discovered the codicil, Bennett decided to destroy it. He lit the document with a match, burned it and swept the ashes into an envelope. Then he handed the envelope to Bugas and told him, "Take this back to Henry."

Later, Capizzi, the Ford lawyer, asked Bennett why he had destroyed the codicil. According to Bennett, old Henry had carried the original document around with him, scrawling random comments and Bible verses. The codicil was worthless.

Although Bennett made a show of conciliation, he couldn't hide his feelings. When Bugas came to the office the next day, he discovered that his desk had been moved into the washroom.

Despite the codicil's demise, the power struggle was not over. In January 1944, Sorensen - the man who had gained fame as the chief architect of Ford's war production - resigned. Weary of Bennett's interference and Henry Ford's paranoia, Sorensen retired to Florida.

Bennett appeared to be a front-runner to run the company - even without the codicil. As Time magazine noted, "With Sorensen out, there is no one in the empire now outside of Henry and Henry II … to challenge the absolute power of the one-time sailor, boxer and Ford bodyguard, Harry Bennett."

At that critical moment, Henry II demonstrated a gift for corporate infighting. On April 10, 1944, he got the board to name him executive vice president. Using the authority of his new position, he promoted reliable allies and began firing Bennett's supporters.

Eleanor's ultimatum

While Henry II battled Bennett, Clara and Eleanor pressured Henry I to name his grandson president. Eleanor issued a blunt threat: "If this is not done, I shall sell my stock!"

While it is not known exactly when Eleanor confronted old Henry, the final act of the power struggle came on Sept. 20, 1945. The 82-year-old patriarch summoned his grandson to his home and announced that he was stepping down.

"I told him I'd take it only if I had a completely free hand to make any changes I wanted to make," Henry II later recounted. "We argued about that - but he didn't withdraw his offer."

Young Henry moved quickly to consolidate power. After leaving Fair Lane, he called for a board meeting the next day to ratify his grandfather's decision. At that meeting, Bennett knew the struggle was over. He bitterly rose to leave the room before the meeting ended, but others at the meeting coaxed him to stay.

The bitter end

After the meeting, Henry II went down to Bennett's basement office and informed him that he was no longer the boss.

Bennett offered a parting shot, "You're taking over a billion dollar organization here that you haven't contributed a thing to."

According to one account, there was one final confrontation. Collier and Horowitz claim that young Henry feared that Bennett might make trouble. The next day, he dispatched Bugas to Bennett's office to fire him.

Enraged, Bennett pulled a .45 automatic out of his desk.

Bugas drew his own gun and said, "Don't make the mistake of pulling the trigger, because I'll kill you. I won't miss. I'll put one right through your heart, Harry."

Bennett backed down, and Bugas departed. Afterward, Ford employees smelled smoke in the office as Bennett burned his papers.

You can reach David Sedgwick at dsedgwick@crain.com.