Petersen clashes with Fords over their role on the board
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Referring to other Ford family members who might want to follow in his footsteps, Henry Ford II said, "There are no crown princes in the Ford Motor Co., and there is no privileged route to the top."
Nine years later, two Ford family heirs added an amendment that said, in effect: "No crown princes perhaps - but don't mess with the Ford family."
The issue in 1988 was the role of Edsel Ford II and Bill Ford, cousins and fourth-generation heirs to founder Henry Ford, on the company's board of directors. CEO Donald Petersen's opposition to giving them any meaningful power contributed to his ouster in October 1989. The two young Fords were elected board members in January 1988, a move that reflected their roles as representatives of the family that owned a controlling block of stock, rather than their stature as senior executives.
Edsel Ford II, then 39, was sales manager of Lincoln-Mercury Division. Bill Ford, then 30, was managing director of Ford of Switzerland.
Uneasy at the top
Edsel Ford II acknowledged that it would be delicate to serve as board members - supervising Petersen and other corporate officers - while occupying executive posts several levels below them.
"We'd be foolish not to recognize that this is going to be somewhat of a sticky issue," he said.
But Bill Ford struck another note, saying, "We're not going to be wallflowers."
That became clear in December 1988, when the cousins appeared on the cover of Fortune magazine. The headline read, "The Young Fords: Struggling for Control of the Family Company."
Edsel Ford II bluntly complained about his and Bill Ford's lack of standing, specifically that they had not been appointed to any board committees. Those committees hashed out major issues, leaving the cousins on the outside looking in.
Regarding their attendance at board meetings, he said, "Typically, we walk in, shake a few hands and leave after the meeting."
In May 1989, Petersen relented. Both cousins joined the powerful executive and finance committees. But the enmity between Petersen and the Ford family remained, becoming an important factor in the board's October 1989 decision to pressure Petersen to resign. The following month, Petersen announced that he would leave the company on March 1, 1990.
Wrong side of family
In their book Comeback: The Fall and Rise of the American Automobile Industry, Paul Ingrassia and Joseph B. White write that Petersen's hot temper and business woes contributed to his departure. But, they added, one of Petersen's biggest missteps was "getting on the wrong side of the family whose name was on the building."
The episode echoed the firing of Lee Iacocca by Henry Ford II in 1978. The same dynamic played out in late 2001, when failure to keep a good relationship with Bill Ford, then company chairman, was one reason for the firing of CEO Jacques Nasser.
Today, a family member - Bill Ford - again sits atop Ford Motor Co. as chairman and CEO. And the company again has the ambiguous status that it did during Henry Ford II's reign: not quite a family-owned firm, not quite a corporate meritocracy.
You can reach Dave Guilford at dguilford@crain.com. -- Follow Dave on 
