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Hinrichs had left Las Vegas challenging the UAW leaders to negotiate new, more competitive local operating agreements at their factories to close the competitiveness gap ahead of the 2007 national contract talks, warning them that Ford might not make it until then without their help. They were still debating how to respond when they received news of Delphi’s move. It pushed the local UAW leaders to the bargaining table.

So did the new head of the union’s National Ford Department, Bob King.

King was a gaunt intellectual with messy hair and thick glasses, the son of a Ford labor relations executive who had switched sides at an early age. A quiet Michiganian with socialist leanings, King could rouse himself to a revolutionary fervor when necessary. But like Gettelfinger, King was also a realist, and he soon realized that Ford was in serious trouble. After he was elected vice president in June, King got Ford’s usual spiel about how dire its financial position had become. With talks on a new national contract only a year away, he was skeptical.

“If that’s the case, I want to have somebody I trust come in and review all the numbers,” he told Ford. King knew he was in trouble when the company immediately agreed to open its books to whomever the union designated. The UAW had its own finance whiz, Eric Perkins, crunch Ford’s numbers. Chief Financial Officer Don Leclair went over everything with him.

“It’s worse than they’re telling you,” Perkins told King and Gettelfinger when he had completed his analysis.

King knew that if Ford failed, tens of thousands of UAW members would be out of work, and many times that number of retirees, spouses, and dependents could lose their pensions and their benefits. He was prepared to do whatever was required to keep Ford in business. That did not mean he had to like it. King believed many of Ford’s problems were the result of catastrophic blunders by the company’s management. But the past was suddenly a lot less important than the future. King worked with the automaker to put together the
buyout packages that were necessary to meet Mark Fields’ downsizing goals and allowed Hinrichs and Martin Mulloy, Ford’s vice president of labor affairs for North America, to pitch them directly to workers at each Ford factory.

The two Ford men made a bit of an odd couple. Hinrichs was young and willing to outshout workers who challenged his facts and figures. Mulloy, who went by “Marty,” was an older, quieter, and far more easygoing negotiator with a bald pate and quick smile who spent a lot of time unruffling feathers that Hinrichs had ruffled. But they worked well together—a bit like a latter-day vaudeville team—and with King’s help managed to exceed the buyout targets established in Ford’s Way Forward plan. They were also able to negotiate more competitive operating agreements at all but six of Ford’s U.S. factories by September 2006.

Hinrichs was pleased with the progress, but he was also working on a contingency plan. If Ford could not wrest even deeper concessions from the UAW in the upcoming national contract talks, he wanted to move the bulk of its U.S. manufacturing to Mexico. And he was not alone. But Alan Mulally had a different idea.

R
on Gettelfinger and Bob King were not entirely sure what to make of Ford’s new CEO. Mulally was not exactly known as a friend to labor. After all, he was the guy who cut Boeing’s factory workforce in half after the September 11 terrorist attacks, went on to outsource much of the work on its flagship 787 airliner, and battled its unions in a series of bitter strikes that were called as a result of these measures. Gettelfinger had firsthand knowledge of all of this. While most of Boeing’s hourly workers were members of the International Association of Machinists and Aerospace Workers, employees at some of its facilities were represented by the UAW’s aerospace division, which Gettelfinger headed from 1998 to 2002. During that time, he sat across the table from Mulally more than once, and while he had not been a big fan of the painful cuts Mulally demanded to save Boeing, Gettelfinger had always found him to be an honest broker. King was more concerned. He had gotten an earful from the West Coast unions
after Mulally was named president and CEO of Ford back in September. But he was willing to follow Gettelfinger’s lead.

Both UAW leaders were also a little concerned about Bill Ford’s decision to remove himself from the day-to-day running of the company. They were impressed by his humility but valued the long-standing relationship between the Ford family and the union. They knew that he and the other members of the Ford family genuinely cared for the company’s workers, and they were not entirely sure what Ford’s decision would mean for that relationship. However, those concerns were soon put to rest. Bill Ford contacted Gettelfinger shortly after Mulally was hired and told him that he would continue to hold private, one-on-one meetings with the UAW president. Even Mulally did not know about them, at least initially.

As Gettelfinger and King tried to figure out Mulally, he was trying to figure out the UAW. It quickly became clear to him that this union wielded far more power at Ford than the Machinists had ever known at Boeing. He could not believe the UAW could force Ford to keep factories open, nor could he believe the company had to pay union members to leave. And the jobs bank—that seemed like something out of Kafka. Mulally was not particularly interested in assigning blame for this mess. His predecessors had signed the contracts that made all these things possible, so they were as much responsible for making the company’s American factories uncompetitive as the union was. He was more worried about figuring out how both sides could work together to change the equation so that it once again made sense for Ford to build cars and trucks in the United States. Like everything else, labor relations were all about teamwork for Mulally. He rejected the traditional adversarial relationship between companies and unions. To him both sides were in it together. Both stood to lose if the company failed. Both stood to gain if it succeeded. And just like the white-collar workers, those on the assembly line needed to know what the real situation was so that they could make informed decisions about how to respond to it. But he also firmly believed that, if push came to shove, a company had to do whatever was required to stay in business.

Laymon warned Mulally that his track record at Boeing would
worry many Ford workers, and Mulally did his best to assuage those concerns. The day after his hiring was announced, Mulally went on the radio in Detroit and said his mission was to save Ford Motor Company, not destroy the UAW.

“
I am absolutely not Mr. Ax Man,” he promised.

Mulally also remembered Gettelfinger. When he was overseeing the integration of the Rockwell and McDonnell Douglas aerospace and defense operations in the late 1990s, he had come to Detroit to meet with the UAW president at Solidarity House and hash out details of that transition. Mulally recalled that Gettelfinger had excused himself in the middle of those talks because he was engaged in his own negotiations with the union representing the UAW’s office staff. A few minutes later, Gettelfinger returned and dropped into his seat with a sigh.

“Boy!” he exclaimed with a wicked grin. “These unions are tough.”

Laymon told Mulally that there was no way he could save Ford without Gettelfinger.

“You might not like the guy,” he told Mulally. “But you gotta appreciate the power and influence he has over your ability to produce product.”

Laymon urged Mulally to begin a dialogue with the union boss as soon as he arrived in Dearborn and scheduled a meet-and-greet for the two men on September 28, 2006, just a few weeks after Mulally was hired. During that first visit, Gettelfinger spent most of the time listing all of the things the UAW had done to help Ford to date. He talked about the competitive operating agreements, the quality pushes, and the buyouts. Mulally got the message: We’ve already done a lot, so don’t expect us to do much more. But he was impressed with the genuine pride Gettelfinger took in these accomplishments—and with the UAW president’s stories about his own time on the Ford line in Kentucky.

He’s really got a personal connection with Ford
, Mulally thought.
He wants Ford to succeed
.

They agreed to keep talking.

O
n May 11, 2007, Mulally held a secret meeting with Gettelfinger and King at the Dearborn Inn, a stately redbrick hotel hidden behind a screen of trees across the street from Ford Motor Company’s proving grounds.
^*
They convened in a large suite with Leclair, Laymon, Mulloy, and Hinrichs, who had recently been promoted to vice president of manufacturing for North America. It was a casual gathering. There was no conference table. The men sat in armchairs clustered around a blank flip chart. Mulally stood next to the easel, a black marker in his hand. It was a beautiful spring day, and a gentle breeze blew through the open windows. A large American flag flapped audibly outside the window as Mulally began outlining his plan to make the United States a manufacturing leader once again.

At the top of the first blank sheet, Mulally wrote “Our World.” Beneath it he drew a simple chart plotting the decline of Detroit’s Big Three and the rise of their Japanese competitors.

“All three companies have been going out of business for decades. When they finally do, they’ll take the UAW down with them,” Mulally told the union leaders. “We’ve got to deal with this reality.”

Of course, this was not news to either Gettelfinger or King. The UAW had its own financial advisers. They had reached the same conclusion. The only question was what to do about it. Mulally said he had some ideas.

He drew three intersecting circles. In one he wrote “Customers,” in another “Dealers,” and in the last one “Ford.” Then he wrote “UAW” underneath the automaker’s name. These were the company’s stakeholders, Mulally explained. They all stood to benefit from Ford’s success, and they all would lose if Ford failed.

Mulally drew three more circles, labeling these “Products,” “Production,” and “People.” Under that he once again wrote “UAW.” These, he said, were the levers Ford could pull to effect its transformation into a viable company—the inputs into his equation.

Beneath these two diagrams, Mulally charted Ford’s finances, projected out over the next five years.

“Look at how much money we’re losing,” he said, tapping the chart with his pen. “We’ve got to get to break-even by ’09.”

But Mulally’s chart showed the company losing $4 billion in 2009, the current internal forecast. If Ford could not figure out how to transform that loss into a profit, it might as well turn the lights out.

“We’re going to run out of time,” he said.

Gettelfinger and King complained that Ford was investing too much in its money-losing foreign brands. Why not start there? Mulally smiled, and wrote the initials of each brand on the bottom of the sheet, starting with “F” for Ford, followed by “L” for Lincoln, “M” for Mercury, “J” for Jaguar, “LR” for Land Rover, “V” for Volvo, “AM” for Aston Martin, and another “M” for Mazda. Then he crossed all of them out, except for the “F” and the “L.” The union men were stunned.

“This is our plan. We’re going to do this to invest in Ford,” Mulally said with a grin. The only question was where to make that investment. The answer was up to the UAW. Right now Ford was losing money on almost every vehicle it made in America. It could keep doing that and go out of business, or it could use the money freed up by selling off the foreign brands to build new factories in Mexico, where it could build cars at a profit.

“What would you do?” Mulally asked. Neither Gettelfinger nor King answered.

Mulally said there was a third option: With the right contract, Ford could profitably build its cars right here, in the good old U.S. of A.

“If we can get back to being competitive, we can grow and we can provide more opportunities for salaried employees and UAW employees,” he said. “That’s my theme: Profitable growth for all.”

Mulally took a step toward Gettelfinger and looked him in the eye.

“We want to prove that we can do this in America,” he said solemnly. “Ron, will you hold hands with me? We’ll do this together, and we’ll go out there and say we did this together. We’re going to be able to make products in America and make them profitably and successfully. Or, we’ll just go out there and tell everybody it was too hard. We just couldn’t do it. It’s up to you.”