End of an Era at Ford

End of an Era at Ford Bravos and battles at Henry II's last annual meeting

"Next year, you'll find me in the audience." So said a smiling Henry Ford II last week at the annual meeting of the huge auto empire attended by 2,850 Ford Motor Co. stockholders in Detroit's jampacked Henry and Edsel Ford Auditorium. As expected, Ford, 61, said that as of Oct. 1 he would step down as chief executive of the world's second largest auto company, which last year had sales of $43 billion. His successor, he added, would be the company's president, Philip Caldwell, 59, the first non-Ford ever to hold the top job in 70 years.

If Henry means what he says about his role's becoming "completely nonexecutive," one of the nation's last family-dominated corporate giants will be entering a new period in which its future course will be steered by professional managers. Caldwell, a reticent Harvard Business School graduate, joined the company in 1953. Like many of the company's top executives, he came up through Ford's European operations. But just how much power Ford intends to give up remains open to question, since he also declared last week that he will remain the company's board chairman for an "indeterminate" period.

Doubtless Ford does not want to step down entirely until he has resolved the legal and family tangles that have swirled up around him. The sometimes raucous annual meeting brought together most of the chief protagonists in these dramas. There was, for instance, Henry's rebellious nephew Benson Ford, 29, who was in Detroit not only for the meeting but also to push a lawsuit that is part of his fight to elbow his way onto the Ford board. Also present was Henry's only son Edsel, 30, who is assistant managing director of the company's Australian operation and the only member of the younger generation of Fords now being groomed for an important role in the firm.

In what has become something of a Ford tradition, the meeting had its full quotient of melodrama and mania. A woman stockholder fainted at the microphone after nominating Benson for the board. Professional Board Baiter Evelyn Davis, who came in a red plastic fire hat, dismissed the many present and former Ford employees in the audience as "stooges." Through it all, Henry remained the star. He was frequently applauded by Ford loyalists who had come to see the chairman preside at his last such gathering.

Others also came expecting fireworks from Ford's chief legal antagonist, Manhattan Lawyer Roy Cohn. For a year he has been pressing a suit filed on behalf of a handful of stockholders (that charges Henry with a series of misdeeds, including accepting bribes. A New York court threw out Cohn's suit in January on grounds that it should have been filed in Michigan, where Ford is headquartered. Cohn is appealing, but plans to pursue the case in Michigan if necessary.

Though he was somewhat more subdued than at last year's meeting, where he harangued Ford for more than an hour, Cohn was again on the attack. He asserted that an internal company audit found that Henry had lied when he said he never used Ford Motor funds to pay personal expenses. Cohn charged that when Henry was ordered to repay $34,585 that the company had spent to maintain an elegant Manhattan hotel suite, "he increased his salary by $45,000 to more than $1 million annually" to recoup his loss.

Cohn also rapped the chairman for firing Lee Iacocca, noting that a number of former key Ford executives followed the deposed president to Chrysler. Ignoring the fact that Ford had a robust first quarter, in which earnings rose 28% to a record $595 million, while Chrysler has been suffering sharp losses, Cohn asserted that the Ford men who followed Iacocca were "leaving a loser and joining a winner." To that Ford snapped: "You put your money in Chrysler and go to their meetings, O.K.?"

Ford also had some zingers for his nephew Ben. A week before, a committee composed of Ford and the company's nine outside directors had turned down his request to take the board seat held by his father, Benson Sr., who died last July. But Ben, who owns about $16 million worth of Ford stock, announced at the meeting that he still deserved a seat. Said he: "I do not intend to fade away." Asked by a stockholder why Ben was not given a seat, Ford barked, to loud applause: "Not qualified."

Ben has enlisted Cohn to represent him in a $2 million federal civil suit against Ford Estates, a company that manages the personal funds of members of the Ford family. He charges that the firm withheld vital information from him and failed to give him a just share of his father's estate. The suit promises to be bitter: the Ford family has hired Criminal Lawyer Edward Bennett Williams to defend its interests.

Under the will's terms Ben gets slightly more than 1% of the company's key Class B voting stock, worth about $7 million. But the stock was put into a trust of which Benson's mother is the sole trustee. She is obligated to name another trustee before she dies, or control passes first to Henry and then to his brother William Clay Ford, a member of the company's board. Through a complex arrangement, the B stock, the vast majority of which is controlled by the Ford family, permanently accounts for 40% of the total stockholder vote. Benson already owns some 2.2% and will receive another 1.8% next fall when he turns 30.

During last week's court hearings, Ben's squadron of lawyers from Detroit and California contended that his father had intended that he be a board member. But, says Benson, his father had changed his will in 1975 under heavy pressure from family lawyers. Benson Sr. was in no condition to resist, says the young heir, because he had become an alcoholic who drank "up to a fifth of liquor a day," and was further addled by drugs he took for his heart condition. Ben claims that family lawyers misinformed him about his rights and that the rest of his relatives conspired to keep him out of the business because they disapproved of his unconventional life-style in California, where he has dabbled in several shaky business ventures and has had brushes with the law for drug possession.

Despite his contentions to the contrary, there is little evidence that Ben took much interest in the company until his father's death; in marked contrast to his cousin Edsel, he has never held a full-time job with Ford. Ben has said he would join a management training program but has twice postponed the move. Still, he believes that with control of enough voting stock he can force his way onto the board. Uncle Henry disagrees. Says he: "There are no crown princes at the Ford Motor Company and there is no privileged route to the top." Still, speculation persists that Henry would like nothing better than to see his son Edsel move into the Ford driver's seat some day. And, as Henry well knows, there is rarely room for two at the top.

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