(FORTUNE Magazine) - If Rick Wagoner has the toughest job in business, where does Bill Ford, chairman and CEO of Ford Motor, rank? On paper Ford appears to have it much easier. Despite losing $1.6 billion in North America last year, Ford Motor remains profitable. It has more cash and less debt than GM, its credit rating is higher, and its legacy costs are lower because it has shrunk less (and thus has fewer retirees to support). While Wagoner has to deal with activist shareholder Kirk Kerkorian, Bill Ford mostly has to keep happy the members of his own family, who control more than 40% of the company's voting shares. They aren't happy that their shares are worth just a third as much as they were five years ago, but they are still getting a 40-cent-per-share annual dividend.

Yet Ford Motor hasn't been running all that smoothly since Bill Ford took over as CEO in 2001. Ford executives have been changing jobs more often than countermen at Subway; the company just got its fourth sales and marketing boss in the past 17 months. Strategic direction looks like a lot of zigs and zags. Ford Division has dumped its overtly conservative design themes--embodied in the Five Hundred and the Explorer--and will pursue more eye-catching ones from now on. The Taurus, Ford's bestselling car in 2005, is being discontinued in 2006 (it hopes the Fusion will fill the vacuum). Lincoln has gotten yet another facelift, while Mercury is still seeking a personality after decades of searching.

To get his company up to speed again, Bill Ford has produced the second turnaround plan of his tenure, called "Way Forward." When it was announced in late January, bad news dominated the headlines: 14 anticipated plant closings, 25,000 to 30,000 layoffs by 2012. Still, they merely reflected Ford's shrinking market share, which is two-thirds what it was a decade ago. Less dramatically, the plan promises cost cuts, improved quality, and increased productivity. Those are all essential in an industry that gets more competitive by the day, but the pledges seemed flimsy because they were accompanied by few targets or deadlines.

Bill Ford did draw a line in the sand on two issues. He committed to stabilizing U.S. market share in the near term and expects to break even in North America by 2008. But sales are driven by new model introductions, and analysts say Ford--despite a big bump in 2007--is replacing less of its product line over the next three years than any other major manufacturer. At the same time, Asian and European automakers will be adding 600,000 units of incremental capacity in the U.S. Deutsche Bank analyst Rod Lache called Ford's plan "unconvincing."

Events beyond Bill Ford's control could make his job even trickier. As he told FORTUNE, "We've stress-tested the plan, but will the world unfold the way we think it will? What if there is a recession? What if oil prices behave in an erratic manner?" Ford could have added a third factor that would rock the company: a GM bankruptcy. Under the protection of Chapter 11, GM could stretch out payments to suppliers and strike new deals with labor, lowering its costs. Bankruptcy would also create havoc in the marketplace. Dealers could put GM's cars and trucks on sale as distressed merchandise, driving prices far below the market level. Some analysts think a GM bankruptcy would force Ford to follow suit.

There's one way Bill Ford could make his job a little easier: Remove the scrutiny of analysts and shareholders by taking the company private. "The Ford family could pursue its vision free of second-guessing and would get any upside from any turnaround," writes Bernstein Research analyst Brian A. Johnson. The numbers look doable. With Ford's market cap at $15.5 billion, the price would be cheap, and Johnson figures that the family could raise money by distributing stakes in Ford Credit and brands like Mazda to shareholders. But Johnson says that increased attention to pension obligations would force the Ford family to come up with a big chunk of the $15.5 billion in cash, which would saddle the company with debt. Among other things, that would make it difficult for the family members to keep paying themselves a regular dividend--probably a deal breaker. Bill Ford could be forgiven for wondering whether Great-Granddad had it easier.