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4th Generation Seeks Power : Chairman Tries to Drive Off Ford Family’s Discontent

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Times Staff Writer

Ford Motor Chairman Donald Petersen, faced with a surprising new challenge to his authority from a younger generation of Ford family members, stood his ground Wednesday, suggesting that the time for family control over the management of the world’s second-largest auto maker is past.

In his first meeting with the press since reports surfaced that the younger members of the Ford family--which still controls 40% of the company’s voting shares--want more influence in the company, Petersen stressed that he believes Ford should stick with professional, non-family management.

“We are now in a position where I believe . . . decisions as to who will serve as the chief executive of Ford will be based on a judgment of who is in the best position to do that job in the best possible way,” said Petersen, choosing his words carefully and diplomatically. “Ultimately, when it comes to chief executives, our belief at Ford Motor Co. . . . is that decision is one that should be based on merit.”

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Yet Petersen, only the second non-family member to run the giant auto maker, also made it clear that he is trying to negotiate a deal with the family. He says he thinks he can satisfy the demands of the fourth generation of Ford family members--the sons and daughters of Henry Ford II and his two brothers and one sister--for increased influence inside the company, without disrupting the non-family management structure that has engineered Ford’s dramatic recovery over the past few years.

“I’m very optimistic that we will work out an approach as we proceed here, between the family’s fourth generation and the Ford Motor Co., that will be very favorable to both the family and the company’s interests,” Petersen said.

Standing quietly by as Petersen spoke to reporters at a press preview for the North American International Auto Show here was Edsel B. Ford II, a Lincoln-Mercury marketing executive and the 40-year-old son of Henry Ford II. Edsel Ford refused to comment on the situation Wednesday and cheerfully joined Petersen in front of Lincoln-Mercury cars for the benefit of a crowd of photographers at the auto show.

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But Edsel and his cousin, 31-year-old William (Billy) Clay Ford Jr., who runs Ford’s Swiss sales operations, are reportedly leading the campaign by the fourth generation of Ford family members to regain at least some of the influence that the family has lost since Henry Ford II retired as chairman of Ford in 1979.

That family influence declined further after Henry Ford II died in 1987. Even after his retirement, he retained enormous influence and remained chairman of the board’s powerful finance committee until his death. That post has been given to his brother, William Clay Ford Sr.--Billy’s father. But while he also holds the title of vice chairman, William Clay Sr. doesn’t play nearly as active a role inside the company as did his brother, preferring instead to be involved with the Detroit Lions, the National Football League team that he owns.

Edsel and Billy sparked the current controversy by going public with their frustrations over their lack of influence in the company. Although they are both on the board--despite holding rather junior executive positions--the two Fords have told reporters that they feel that Petersen is trying to limit their power.

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For instance, Edsel, who apparently now hopes someday to be chief executive, complained to Fortune magazine that he and Billy are the only two board members not assigned to any of the board’s committees.

Some family members, including some of the younger Ford women who do not work at the company, also apparently want a fourth seat on the board, joining Edsel, Billy and William Clay Sr.

To improve their bargaining power at the company, the Ford family members are apparently trying to work jointly to keep their strong voting control over Ford stock. They have set up a fund to buy any stock that might be sold by family members in an effort to retain the 40% voting power provided their special Class B Ford family stock.

Sensitive to the potential power of a Ford family voting block, Petersen is clearly trying to tread lightly, while still guarding his turf.

“It’s very clear that we are a company in transition in our relationship with the Ford family,” Petersen said. “We’ve gone from working with essentially a third generation, to now, where there is a growing involvement of the fourth generation. The fourth generation of the Ford family is coming of age, if you will.

“Frankly, we are plowing new ground. We’ve never been here before. So we’re having a lot of discussions about it in a very informal way--continuing conversations. Many of those conversations are among Bill (William Clay Sr.), Edsel, Billy and me.”

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