(FORTUNE Magazine) – When William Clay Ford, Bill's father, aspired to become chairman of the board of Ford Motor in the late 1970s, he figured that all he had to do was talk to his brother the CEO--Henry Ford II. As it happened, Henry turned him down, and for the next two decades the chairman's job was held by a succession of professional managers. But when Bill Ford Jr. decided he would like the position, no family member was in charge, and no single conversation could get him the job. Bill had to sell himself to the board of directors, soothe hurt feelings among his family, work out a relationship with CEO Jac Nasser, and, more than anything, battle the stubborn and at times irrational opposition of the most powerful man at the company: former chairman, CEO, and president Alex Trotman.

Although the Ford family has provided a continuity of ownership for 97 years, its own stewardship of the company has sometimes been erratic. Founder Henry, Bill's great-grandfather, nearly wrecked Ford Motor after he created it, and Henry II, Bill's uncle, combined moments of brilliance with stretches of bad judgment or just plain inattention. The professional managers who succeeded Henry II as CEO, especially Trotman and Donald Petersen, who served from 1985 to 1990, tended either to ignore the family members or to treat them as wealthy meddlers. "There must be something in the water cooler that causes [the nonfamily bosses'] brains to get addled," says a former company executive.

By virtue of his background and his business career, Trotman suffered the family more poorly than most. "Trotman was not really a Ford family man," says Charlotte Ford, Bill's cousin and the eldest child of Henry Ford II. A plainspoken Scot who was CEO from 1993 to 1999, Trotman, who never attended college, started as a lowly parts runner and worked his way up in the company. Some attributed his resentment of the privileged Fords to an anti-royalist streak. The family may have owned some 6% of the common stock and controlled 40% of the shareholder votes, but it seemed to count less with Trotman than the average institutional shareholder. "Alex had grand contempt for the family," says one Ford executive.

The animosity between Trotman, who declined to be interviewed by FORTUNE, and the family grew as Bill Ford moved toward the chairman's job. Trotman stubbornly pushed to choose his own successor, but those efforts were stymied by the board of directors, on which Bill sits along with his father and his cousin Edsel (the only son of Henry Ford II). Trotman also fought against splitting the chairman's job from the CEO's; keeping the positions as one would have blocked Bill, because he lacked the operating experience necessary to be CEO. When the board finally voted to name the young Ford chairman in September 1998, Trotman could not contain his anger, telling Bill acidly, "So now you have your monarchy back, Prince William."

For the first 17 years of his life at Ford Motor, Bill followed the same path as any ambitious nonfamily member, moving through a series of executive assignments. Then, in 1995, his father, who had been in poor health, announced that he would resign as chairman of the board's finance committee. The job, which was held by Henry II before William Clay, had long been considered the second most powerful in the company. Bill decided that he would like it. After consulting with Trotman, who seemed taken aback by his interest, Bill took his candidacy to the board.

Some directors thought he wasn't ready for the finance job; others said it would be a bad career move. But in the end they agreed to let him take it, with one condition: that he relinquish his day-to-day responsibilities--in effect, leave the company. The directors felt that he couldn't continue in his current job and at the same time scrutinize his boss' budgets as chairman of the finance committee. Bill agreed with the logic of this explanation. Moreover, giving up the daily grind had its appeal. He wouldn't have to pass time in company backwaters, and he would have more time to devote to his outside interests.

After discussing the matter with friends, Bill left the company payroll effective Jan. 1, 1996. "I think I shocked a lot of people, but it felt right to me," he says. It turned out to be a smart move. "Bill did himself well when he resigned from active management," says financier Michael Dingman, a Ford director since 1981. "He started looking at the company as a shareholder, which is terribly important, and he was relieved of all the conflicts that tear at you from the other [employee] side." The change also allowed him to think about how badly he wanted the chairman's job. For counsel, he turned to directors like Irvine Hockaday Jr., CEO of Hallmark Cards, which also had a member of its founding family as chairman. "It is a big burden, being a Ford," Hockaday says. "The commitment is pretty all-consuming. I remember Bill asking me, 'Is this something I really want to do?' "

Bill also had to deal with Edsel's ambitions. His cousin, 51, had worked at the company since college and was appointed to the board at the same time as Bill. But Edsel had mostly limited himself to sales and marketing jobs, and wasn't perceived to have Bill's dedication, consistency, or scope. To resolve the dilemma, Bill came up with an innovative solution: He and Edsel would stand united on family issues but go their own way with their individual careers. It seemed to work. When Edsel realized he wasn't going to rise through the company, he quit and now serves as a $500,000-a-year consultant, mostly on dealer relations. Friends say he is bitterly disappointed not to have advanced further, but he has so far kept his feelings private. Like Trotman, Edsel declined to be interviewed by FORTUNE.

Despite its difficulties, Bill's relationship with Edsel was much smoother than the one with Trotman. Trotman, who became chairman and CEO in November 1993, seemed preoccupied from the beginning with choosing his replacement, even though the board has kept such a tight grip on leadership issues in recent years that no nonfamily CEO has gotten his first choice of a successor. Early on, Trotman backed Edward Hagenlocker, a stolid truck executive never seen in public without a vest. To prepare Hagenlocker, Trotman promoted him to a key job, head of worldwide auto operations, and put him in charge of the global reorganization known as Ford 2000. But the outside directors who controlled the succession process told Trotman that they, not he, would choose the new boss. And as Ford 2000 stumbled in its early days, they quickly lost confidence in the uninspiring Hagenlocker. "It was hard for Alex to accept this," says a retired Ford executive. "He had huge faith in Hagenlocker."

Next Trotman recommended that Hagenlocker join in running the company with Jac Nasser, then head of global product development; Trotman also floated the candidacy of CFO John Devine. When neither idea gained traction, he pushed to give Nasser both the chairman and CEO jobs, effectively preventing any consideration of Bill. "You never had any trouble understanding where Alex stood, and it is accurate to say that he was not a fan [of Bill's candidacy]," says Hockaday. "He thought there would be confusion with two people, aggravated by the fact that one of them was named Ford." Hockaday and others, by contrast, saw a lot of value in having a Ford family member at the top of the company. They believed Bill could become a powerful living symbol of the Ford brand.

Nasser's emergence was fortunate for Bill because the energetic Australian possessed heavy-duty operating experience. Says Hockaday, who has sat on the board since 1987: "I don't think he [Bill] would be chairman if we didn't have somebody like Jac." As the deliberations on succession proceeded, says one board member, Trotman "reacted emotionally and not practically." In the fall of 1996 his emotions boiled over. He became irritated that sensitive information about upcoming models and planned management changes appeared in the press. When he learned that FORTUNE was about to publish a story in its Oct. 14 issue identifying Bill as a candidate for chairman, he became enraged. Says a former Ford executive close to the situation: "Alex was very secretive, and he could get furious about things that appeared in print. He was very angry."

Trotman tried to kill the story by asking a mutual friend to appeal to Gerald Levin, CEO of Time Warner (parent of FORTUNE's publisher). When that effort was rebuffed, Trotman began what one insider called "a great witch hunt." He ordered Ford's general counsel John Martin to find out if someone had leaked the story. Company lawyers, along with attorneys from Ford's Washington law firm O'Melveny & Myers, formally interviewed members of the board, including Bill, as well as some top executives. They also searched business and personal phone records looking for calls to news organizations.

Several weeks later Trotman told the board that the investigation had been inconclusive. But feelings were bruised. One director compared it to the Nixon White House plumbers' operation that set off Watergate. Bill won't talk about the investigation for the record, but he told friends he found it insulting. Says one: "When you're the owner of the company, this is a highly offensive thing to be quizzed about." Bill still remembered another investigation in the late 1980s when clipped wires suspected of being listening devices were discovered in his and Edsel's offices on the 11th floor of world headquarters. Such incidents reinforced his fears that Ford Motor continued to suffer from the intrigue that had swirled around the company in the old days. At one point Henry Ford's top lieutenant, Harry Bennett, who had friends in Detroit's Mob, carried a pistol at work and ran a large internal security operation.

Bill and Trotman didn't clash just on succession. An ardent environmentalist, Bill pushed Ford Motor to be a leader on ecological issues, while the bottom-line-oriented Trotman wanted to do only what the law required. Bill also tried to broaden the company's exposure to technology by inviting Detroit native Scott McNealy, chairman and CEO of Sun Microsystems, to talk to the directors. Bill told friends he thought McNealy would be a good addition to the board, which then had only one active CEO among its members. But Trotman rebuffed Bill, and McNealy eventually joined the board of General Electric.

With the succession question still unsettled, the board announced on March 13, 1997, that it would extend Trotman's contract for 18 months beyond his normal retirement date of July 1998. Personalities aside, Trotman had turned out to be a profit spinner, and the company was reporting record earnings. Besides, the board needed more time to evaluate Nasser, who had only returned to Detroit in May 1994 from overseas assignments. The directors wanted to assess Nasser's performance as head of global auto operations, as well as gauge his motivational and visionary skills.

Bill, in the meantime, was impressing the directors with his business acumen. "We looked at this quite closely," says board member Carl Reichardt, former CEO of Wells Fargo. "Nobody was unaware of the crown prince title that could be applied to Bill." He had been on the board since 1988, and several members felt that since he would likely serve for several decades, naming him chairman was a sensible way to make his tenure most useful. The Ford family also weighed in. They meet twice a year in Detroit for briefings from company executives and opportunities to drive the latest models on the Dearborn test track. Now that the two surviving grandchildren of Henry Ford--William Clay Ford and Josephine Ford--were aging, the 13 members of the fourth generation were taking charge. They talked about developing a family Website--properly secured, of course--to improve communications with far-flung members and to remind everyone of its heritage in Dearborn. After chafing under Trotman, the family wanted to put a relative in high office who could watch over its investment and serve as a reminder to others of the family's historic role with the company. "We decided we'd really like to have a family member in there, and Bill was the likely person," says Charlotte.

For the directors, the big question became how Bill would share power with Nasser. Rather than set guidelines, they told the two men to work it out themselves. So in the fall of 1997, Bill and Nasser began a series of meetings with each other and with the board. "We wanted to ensure that there was clear accountability and clarity with the roles so that we didn't confuse the organization," says Nasser. Even though the two were friends, they had trouble sorting out their jobs. On at least one occasion the board sent them back to do more work. When negotiations dragged, the directors held separate meetings with each man to say, "You guys need each other." Bill was told that given his age and relative lack of experience, he needed a CEO with strong operational skills to help him run the company. With Nasser, the directors emphasized the value of having a family member at the top. And they made sure Nasser understood that in the event of a shootout, the Fords had all the guns. Nasser did: "Facts are facts," he says.

After a year of work, Bill and Nasser finally negotiated a separation of duties that satisfied them and the board. "The real issue," says Bill, "is not how we delineated the jobs but how decisions would be made and how issues would be resolved." At the September board meeting in New York City, the directors voted to install the two men in January 1999. Trotman agreed to retire at age 65 1/2, a year earlier than his extended contract stipulated.

There is plenty for Bill and Nasser to do. Despite the momentum provided by record U.S. car and truck sales, Ford Motor is losing money in Europe and South America. At the same time it is struggling to reshape its business for the Internet, in part to boost the price of its stock, which is selling at its 52-week low and has a single-digit p/e. And it is intent on playing a leading role in the consolidation of the global auto industry by bidding for the likes of Korea's Daewoo Motors. "I love where I am," Bill said recently. "I think it is the right thing for Ford, and it is the right thing for me." He has already demonstrated that he possesses more tenacity and political skills than most people realize. Now Bill must prove, among other things, that he can turn his relationship with Nasser into a true partnership that will benefit the company, its outside shareholders, and, lest anyone forget, the Ford family.

REPORTER ASSOCIATE Ahmad Diba

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