Nasser was flashy, but he nearly wrecked Ford by going on an acquisitions binge that included not just Volvo and Land Rover but car repair shops, salvage yards, even stakes in e-commerce ventures. His problems were compounded by the dotcom crash and, worst of all, a scandal implicating Ford Explorers equipped with Fire-stone tires in dozens of deadly vehicle rollovers. By the time Bill Ford replaced Nasser as C.E.O. in late 2001, product quality had plummeted, lawsuits had piled up, development of new cars and trucks had faltered, and the company would have a $5.5 billion loss for the year. The debacle continued to haunt the company in the form of a weakened management team and a dangerously anemic product pipeline.

Although he’d initiated the board talks that led to Nasser’s ouster, Bill Ford had not been gunning to take his place. “Bill took on the C.E.O. job because he thought he had a responsibility to take up the challenge at a particularly difficult time for the company,” says eBay C.E.O. Meg Whitman, who has become a good friend. They both have houses in Telluride, Colorado, and he is on her company’s board. “He feels a responsibility that a big part of the engine of American growth and a big part of American identity has a chance to be successful.”

But Bill Ford the C.E.O. was nothing like Bill Ford the iconoclast. “I was afraid that if I really pushed all the things I believed in, the world would think Ford was in the hands of a madman,” he says. Instead he anointed the old guard, consulting with retired executives and persuading one to return to the company. “I wish that I had listened to my instincts and less to the people around me.” He says he spent too much time trying to mollify Wall Street. “I was very proud of the fact that we’d had 12 quarters in a row of meeting or beating our estimates. But I don’t think it made any difference.” The focus on short-term profits only perpetuated business as usual, prolonging Ford’s dependence on the fat profits of S.U.V.’s and trucks and delaying the expensive retooling required to winnow costs and stave off Toyota, which was steadily gaining market share in the U.S.

Numerous times, Ford looked for a high-powered C.O.O. He says he offered the job to Carlos Ghosn in 2002, when Ghosn was C.E.O. of Nissan, and to Dieter Zetsche in 2004 when Zetsche was C.E.O. of Chrysler. Ghosn turned him down, and Zetsche said he would not consider anything less than C.E.O. Ford offered Ghosn that spot in 2005, but it was too late; by then Ghosn was C.E.O. of both Nissan and Renault.

Early last year, Ford began to worry that the company was spinning out of control. Product development was consistently over budget; sales missed their mark. The more Ford tried to find out why, the more his executives pushed back, assuring him the problems were under control. His unorthodox decision to hold off replacing his retiring chief operating officer, Padilla, “was a critical moment,” says former chief of staff Hamp. “He wanted to remove the goddamned layers and stick his fingers in the guts of the place and find out how screwed up we really were.”

What Ford found was a lot of lip service and robust PowerPoints but not a lot of action. “Things I’d assumed were happening were not,” he says. “When I gave a directive, the system would slow-walk it.… You know, if you have enough meetings … if you just slow the train down long enough, people will lose interest.” The effort to make development of new cars and trucks more efficient across the globe was way behind. So was the hybrid program. Customers were confused about what Ford’s brands stood for, but marketing was “soft stuff” and therefore got short shrift. The company remained a collection of warring fiefdoms that still operated ass-backward—“Build a great vehicle and throw it out there and hope somebody buys it.”