Philip Caldwell, Ford CEO after Henry Ford II, dies at 93

Editor's note: Update deletes incorrect reference to celebrity Ethel Merman attending a Taurus preview.

DETROIT (Bloomberg) -- Philip Caldwell, Ford Motor Co.'s first CEO who wasn't a member of the founder's family, and who gambled the automaker's future on the Taurus sedan in the 1980s, has died. He was 93.

He died Wednesday at his home in New Canaan, Conn., his family said. The cause was complications of a stroke.

Caldwell followed in the footsteps of more famous executives. He became president of Ford in 1978 after Henry Ford II fired Lee Iacocca.

"Hank the Deuce," grandson of founder Henry Ford, then chose Caldwell as his successor, first as CEO in 1979 and as chairman the following year. His close relationship with Henry Ford II earned Caldwell the nickname "The Prince" inside the company, according to a New York Times profile in 1979.

He was "remarkably cool and resolute in a crisis," wrote Paul Ingrassia and Joseph B. White in their 1994 book, Comeback: The Fall and Rise of the American Automobile Industry. He "had enormous analytical skills and the determination to examine any problem from every conceivable angle," they wrote.

As president and then CEO, Caldwell presided over a turnaround. Ford endured almost $3.3 billion of losses during two U.S. recessions from 1980 through 1982, as well as questions over the design and safety of its Pinto model.

"Philip Caldwell had a remarkable impact at Ford Motor Company over a span of more than 30 years," Executive Chairman Bill Ford said in a statement.

"Serving as CEO and later as Chairman of the Board of Directors, he helped guide the company through a difficult turnaround in the 1980s and drove the introductions of ground-breaking products around the globe. His dedication and relentless passion for quality always will be hallmarks of his legacy at Ford. Our thoughts and prayers go out to his family."

Introducing Taurus

During his rise within the company, Caldwell had impressed his bosses by helping introduce the popular Fiesta. On his watch as CEO, Ford invested $3 billion on the aerodynamic Taurus, which became the best-selling car in the United States.

Caldwell unveiled the sedan in January 1985, just before he retired and was replaced as CEO by Donald Petersen. The vehicle went on sale later that year as a 1986 model.

"Caldwell couldn't stomach the thought of Petersen getting credit for the Taurus, a car developed mostly on Caldwell's watch," Ingrassia and White wrote in Comeback.

Ford previewed the car on Jan. 29, 1985, at Metro-Goldwyn-Mayer Studios in California with activities that included a dinner attended by such celebrities as Danny Thomas and Linda Carter, according to the book.

Caldwell remained on Ford's board until 1990.

Upon the 1987 death of Henry Ford II, Caldwell, on behalf of the board, pressed 30-year-old William Clay Ford Jr., known as Bill, whether he wanted to become custodian of his family's interests and eventually lead the company that his great-grandfather started.

"Whether Bill had thought about it, whether he really wanted to be a serious player -- that was something we wanted to know," Caldwell said in a 2002 interview with Bloomberg Markets magazine.

Bill Ford served as CEO from late 2001 until September 2006, when he became executive chairman.

Ohio born

Philip Caldwell was born on Jan. 27, 1920, in Bourneville, Ohio, and graduated in 1940 from Muskingum College, now Muskingum University, in New Concord, Ohio, where he majored in economics and debated on a championship-winning team. He earned an MBA from Harvard Business School in Cambridge, Mass., in 1942, served on the staff of U.S. Admiral Chester Nimitz during World War II and joined Ford in 1953.

After working jobs in purchasing, engineering and manufacturing, he was named a manager in Ford's truck product planning division in 1960 and general manager of truck operations in 1968, when he was also elected a vice president. He was assigned to Ford's Philco car-radio unit in Philadelphia and in 1973 became chief of Ford's international operations. Among his achievements was creation of the Fiesta, Ford's first small car in Europe, in 1976.

Iacocca's ire

A reorganization in April 1977 that elevated Caldwell to vice chairman intensified the feud between Iacocca, who remained president, and Henry Ford II.

"It was ridiculous that Caldwell, who used to work for me, was suddenly above me for no apparent reason except malice," Iacocca wrote in his 1984 memoir.

Fourteen months later, in June 1978, Ford named his younger brother, William Clay Ford Sr., as chairman of the executive committee. Caldwell became deputy CEO, with Iacocca reporting to him. The tense arrangement lasted a few weeks, until Iacocca departed. Caldwell then became president, succeeding Iacocca, who a few months later took charge at Chrysler Corp.

The problems Caldwell inherited, the Times reported in November 1978, included the recall of 1.5 million pre-1977 Pinto subcompact sedans following court decisions ordering the company to pay damages for gasoline-tank fires caused by rear-end collisions.

At the company's 1979 annual meeting, Henry Ford II had declared that the chief executive role was no longer something that could be inherited.

"I have decided to make it clear beyond any shadow of doubt. … If any other member of my family achieves a senior position in the company, it will be through merit and by a decision of the board of directors. There are no crown princes in the Ford Motor Company," Ford said.

In a 2003 interview with Automotive News, Caldwell recalled that the handoff itself was somewhat anti-climatic.

"When I came in the room, in front of the desk he placed two chairs, side by side. He sat down in one and told me to sit down in the other. That's when he said, "I'm going to leave and I want you to run the company," Caldwell said. "It was as simple as that."

Crisis, comeback

Ford had set a U.S. sales record the year before Caldwell took over as CEO. Then, battered by an oil crisis and recession, the company's sales plunged more than 45 percent over the next three years. Its market share dropped 6 points to below 20 percent as Americans flocked to fuel-sipping imports.

As he charted Ford's recovery, Caldwell made quality the company's top priority. And he set the stage for a comeback by backing the bold styling on the car that came to symbolize Ford's comeback: the Taurus.

Caldwell recalled in the 2003 interview that he had put intense pressure on designer Jack Telnack to stretch with the Taurus.

Caldwell -- who had been known for being conservative when it came to design -- said to Telnack: "Are you going far enough? Are you going modern enough? Are you really doing a style and design that is going to be the beginning of a trend rather than the last cycle of a trend?"

Telnack later said: "I'd never heard a CEO say that. … They'd always back off and say, 'You've gone too far.' Phil didn't do that. He pushed us."

Lutz's view

In his 2005 book, Six Men Who Built the Modern Auto Industry, Rick Johnson, managing editor of Automotive News, quoted Henry Ford II as saying, "What do you do?" when Caldwell explained that he didn't drink or smoke.

Former General Motors and Ford executive Bob Lutz describes Caldwell as a quirky, humorless teetotaler with a relentless focus on quality and minute details of new vehicles.

In his latest book, Icons and Idiots, Lutz said Caldwell, a former Navy lieutenant, enjoyed collecting free soaps and jams while traveling through Europe and drank only special Malvern Water bottled in England.

Caldwell often invited Lutz to lengthy chats at the end of the workday.

Lutz wrote : "I routinely dreaded these and was always on my guard, taut as a banjo string, because while we talked for two hours, I never felt any genuine intellectual connection. Phil, despite his long-winded homilies, remained sphinxlike. But this one was different. After a while, Phil fell silent as if mulling a thought. Then he said, 'I'm going to show you something that not many people have seen.'

"With that, he reached into the credenza behind his desk and withdrew a heavy, dark maroon leather-bound album. It contained page upon page of pictures of Philip Caldwell in the presence of heads of state, princes, kings, sheiks, Chinese ministers and vice chairmen, notables from the worlds of politics, science, royalty, and show business. It was fascinating.

"Then, when show-and-tell was over and he ceremoniously closed the heavy book, my eyes fell on the gold-embossed title. Suddenly, I understood Phil Caldwell, his hopes, dreams, grandeur, and weakness, all brilliantly encapsulated in one simple phrase. It read: 'Important People Who Have Met Me.'"

Later years

After leaving Ford, Caldwell joined global investing firm Lehman Brothers as a managing director. He was also on the board of trustees at Muskingum University, where' he's the namesake of an academic building. In addition, he contributed to a business administration professorship in his name at Harvard's Business School.

A decade ago, as he reflected on his time at Ford, Caldwell said cars like the Taurus -- whose designs came from car experts and not the top executives -- enabled the company to survive.

"When you've been in the swamp, and we were in the swamp, and you get to dry ground, that's where the reward comes," Caldwell said. "You have the financial rewards, but you also have the rewards of accomplishment that you are indentified with."

With his wife, Betsey, Caldwell had three children: Lawrence, Lucy and Desiree.

Nick Bunkley and Adam Rubenfire of Automotive News contributed to this report.