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Full Speed Ahead

David Leitch led Ford’s legal team through the auto crisis, preserving an iconic American brand

Published in Corporate Counsel Edition - January 2010 magazine

David Leitch remembers exactly where he was on Sept. 11, 2001. As chief counsel of the Federal Aviation Administration, he was leading a training and networking session with his team in Palm Coast, Florida. During an early morning break, he learned that a plane had hit the World Trade Center. He immediately called his deputy chief counsel in Washington, D.C.

“While I was on the phone, I had the TV on and saw the second plane hit,” he says. “At that point, I knew I had to get back to Washington as quickly as I could.”

The government’s first order of business was securing U.S. airspace—which meant that the fastest way for Leitch to return to Washington was to take his rental car and “head north,” he says. “I got in at 8 o’clock that night, went to the FAA, and hunkered down for days and weeks of pretty intense work.”

Dealing with such a national crisis prepared Leitch for taking the legal helm of Ford Motor Co., a Fortune 10 company with almost 200,000 employees worldwide and revenues nearing $150 billion. His team would play a key role in helping Ford successfully navigate a recession that took a severe toll on its two U.S. competitors, General Motors and Chrysler.

“You wouldn’t necessarily think that somebody serving in government would have the kind of background that would lend itself to success as general counsel to a major company like Ford,” says Reginald Brown, a former White House colleague and now a partner at WilmerHale. “It may be a bit counterintuitive, but it really was exactly the right kind of preparation. If you think about what general counsels do, a significant chunk of the job is crisis management.”

 

Growing up in the suburbs of Philadelphia, Leitch developed an analytical mind by observing his father, who worked as an engineer.

“There are a lot of similarities between the way engineers think and the way lawyers think,” he says. “I learned a lot from him about logical thinking, precise language, analytical skills. And I was always very interested in the political process, public policy, and the way in which government interacts with individuals. So it was natural for me, with those interests and that exposure, to think about practicing law.”

After earning his B.A. at Duke University in 1982, he went on to the University of Virginia School of Law. “I knew surprisingly little about being a lawyer when I went to law school,” he says with a laugh.

It was no matter—he graduated No. 1 in his class and landed clerkships with U.S. Circuit Judge J. Harvie Wilkinson III and then-Supreme Court Chief Justice William Rehnquist. He entered private practice as an associate at Hogan & Hartson in Washington, D.C., after being recruited by then-associate John Roberts Jr., now chief justice of the U.S. Supreme Court and a long time friend.

After a few years, he served President George H.W. Bush as a Department of Justice attorney, and then returned to Hogan & Hartson when Clinton took office, working closely with Roberts in the firm’s appellate and Supreme Court practice. From there he segued to the FAA, just three months before 9/11.

“Reviewing regulations, [managing] a big office, working on litigation matters, advising the administration—all those things that would be the ordinary stuff of life for an FAA chief counsel changed on 9/11,” he says. “And for the rest of my tenure as a chief counsel, they never fully returned.”

Instead, he was heavily involved in building up the Federal Air Marshal Service, placing more law enforcement officers on planes, establishing the Transportation Security Administration, and transferring private aviation war-risk insurance to government control.

The George W. Bush administration was impressed with his work, and in August 2002, Leitch was detailed to the Office of Management and Budget to lay the groundwork for the new Department of Homeland Security. He was set to serve as the department’s first general counsel when the job of deputy counsel to the president opened up.

“I was asked to do that instead,” says Leitch, who reported to Alberto Gonzales. “It’s an incredible privilege to work in the White House—to call the West Wing your office, to be that close to so many things that are of great historical importance, and to be working with people like the president, the vice president, Andy Card, Condi Rice, Tom Ridge, Karl Rove, Margaret Spellings and many others.”

Working for President Bush, in particular, he says, “was a high honor, particularly during such a momentous time in our nation’s history. I found him to be principled, courageous and focused.” He adds, “The president I was privileged to serve was far different from the image that was portrayed in the media.”

After four years of public service, Leitch was ready to move back into the private sector. “I was looking in-house and talking to law firms when I heard from a friend that Ford may be looking for a general counsel. I thought that would be an incredible opportunity, if I was lucky enough to be chosen.”

He was, and the challenges were extraordinary. The Dearborn, Michigan-based company would soon face high gas prices, rising corporate health care costs and a falling market share. Combined with increased unemployment, inflation and tightening of the credit markets, the auto giant desperately needed cash.

In 2006, Ford borrowed $23 billion using its corporate assets, including its famous blue nameplate, as collateral. It was a timely gamble that came early enough that institutions were still willing to lend. When GM and Chrysler went looking for similar funds two years later, banks declined, forcing the two companies to accept bankruptcy protection and federal bailouts. Despite the loan, Ford still lost $12.7 billion in 2006, the largest annual loss in the company’s history. Major changes were in order.

“The main thing we did was identify the issues facing us in a clear-headed way and act decisively to address those issues before it was too late,” he says. “The other thing that we did was to change our company so we were more focused on our core business, to right-size our business for the market we actually had. We sold several brands: Jaguar, Land Rover and Aston Martin. And we cut a lot of people from our rolls, salaried and hourly. We shrunk the company so we could preserve our resources and focus on our core, main brands. Although it was very painful, we thought it was necessary. And it proved to be successful.”

The company reported a full-year profit for 2009, and by early 2010, share prices were up significantly.

Leitch is quick to credit his team of 200 in-house lawyers for assisting with the turnaround. “One person cannot be expert in all areas of the law that come through a corporation,” he says. “I’m privileged enough to work with people who are expert in various types of litigation, in Securities and Exchange Commission matters, in intellectual property matters, in international tax, in pension law. As a general counsel, you see the talents and skills of different individuals, you match them with your own, and you work together to try and make sure the corporation is well served.”

Leitch also delegates work to a handful of outside firms, including Hogan & Hartson. “[David] mixes intense intelligence with a wonderful sense of humor,” says firm partner Jonathan Abram, who handles litigation for Ford. “The largest and most significant [lawsuit] was a class action initiated by the United Auto Workers union regarding Ford’s retirement health plan. In the course of three different lawsuits, we restructured the health plan into a trust [managed by the union] and removed that obligation from Ford’s books.”

Richard Cullen, chairman of McGuireWoods, also handles litigation matters for Ford. “Some people who are as bright [as David] are intimidating, and that makes it difficult for outside counsel,” he says. “One is often reluctant to tell that person something they may not want to hear. David is the opposite of intimidating. And he has been very successful both in terms of advising the Ford leadership and in running a first-class legal department in a time of great adversity both for the auto industry and the economy in general. He’s been able to do all of that and still make it fun.”

And he has also been able to do it while raising a family. He and his wife, Ellen, have three children—one son graduated from Clemson University in May, the other is a junior at the University of Colorado at Boulder, and their daughter will start at Wake Forest University this fall. So far, there is no talk of careers in law.

“We’ll see,” he says with a smile.

For his part, Leitch considers his career serendipitous. “Ford is an iconic American company,” he says. “Most American schoolchildren know more about Henry Ford than they do about many of our presidents. He changed the face of the country. He put the country on wheels and changed the way we do manufacturing. It was an incredible opportunity to come work for such an historic company, whose history is woven into the fabric of the country.”

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