Ford, Scott T. 1962–
Scott T. Ford
President and chief executive officer, Alltel Corporation
Education: University of Arkansas, BS, 1984.
Family: Son of Joe T. Ford (retired Alltel CEO) and Jo Ellen Wilbourne Ford (daughter of Allied Telephone Company founder Hugh Randolph Wilbourne Jr.); married, 1984; children: three.
Career: Stephens Group, 1986–1996; Alltel, 1996, director and president; 2002–, chief executive officer.
Address: Alltel Corporation, 1 Allied Drive, Little Rock, Arkansas 72202; http://www.alltel.com.
■ Scott T. Ford, the president and chief executive officer of the Alltel Corporation, made his first business deal at the age of 12 with his father, Joe T. Ford. The two agreed that Scott would never work at Alltel. Joe wanted to spare his son what he himself had endured since coming to work for his father-inlaw, Hugh Wilbourne Jr., in 1959. After the passage of the Telecommunications Act of 1996, however, the Fords rethought their agreement, and, at age 35, Scott Ford became executive vice president of Alltel. Within two years he was appointed CEO, following in the footsteps of his grandfather Wilbourne, who formed Allied Telephone Company in 1943 in Little Rock, Arkansas. Allied merged with Mid-Continent Corporation in 1983 to form the Alltel Corporation. Joe T. Ford, married to Wilbourne's daughter, became the president of Alltel, while his son, Scott, received a finance degree from the University of Arkansas.
After graduating from the Walton College of Business at the University of Arkansas, Ford went to work at Merrill Lynch, where he sharpened his skills in acquisitions. After two years he moved to the Stephens Group in Little Rock. Stephens, an investment firm, was also one of Alltel's largest stockholders. Ford continued gaining experience and a reputation for his energy and acquisitions acumen. After eight years his boss, the legendary Arkansas businessman Jack Stephens, suggested to Ford's father that the son should be brought into Alltel to help the company handle the changes occurring in the telecommunications industry.
Ford wasted no time acquiring purchases for the rural telecommunications company. By 2004 he had been at the forefront of Alltel's most lucrative acquisitions, hostile and friendly. Ford eased into the company not only at a crucial time in the industry, but also at a time when his father began thinking of retirement. Even though many detractors thought Ford received the job because of his relationship with the head of the company, he soon showed his aggressive and stubborn tenacity in moving Alltel into the expanding field of wireless communications.
EARNS REPUTATION IN ACQUISITIONS WITH STEPHENS GROUP
At the Stephens Group, Ford served as the assistant to Stephens, working mostly in private wealth management. His experience with mergers and acquisitions at Merrill Lynch came in handy at Stephens, where he served on the team that managed some of the company's largest mergers.
Ford's first big opportunity came in 1990 when he worked in the background on a deal to purchase Holly Farms by Tyson Foods. He learned a lesson during this transaction with Tyson when the food powerhouse led with a low price. Tyson "led with a twenty-five percent premium, and it ended up costing them fifty percent," Ford explained to Telephony (October 15, 2001). "When you start low everyone knows you're starting low, so everyone assumes you're going to have a series of escalations. When you start high, they have to wonder whether there's an escalation at all or whether they're running the risk of getting zero."
When the Stephens Group went after the Donrey Media Group in 1993, Ford was the point man for the purchase. He said that at the time he was perfectly content working in acquisitions, but when Joe Ford asked him to come on board at Alltel in 1996, Scott decided that he could not turn down the offer. As he said to a writer for Arkansas Business, "How many times does your father come to you, with a real belief—and you can see it in his eyes—that you could help him?" (July 1, 2002).
ACQUISITIONS WIZARD GROWS COMPANY
Starting as an executive vice president at Alltel, Ford soon began climbing the ranks. By 1997 he had been appointed president of the company.
Alltel also reported sales of 3.26 billion in computers, wireless, and wireline phone service in 1997. Under Ford's leadership, the company began aggressively buying smaller telecommunications companies and offering a full range of services to customers.
Ford credited the company's competitiveness with the larger markets to its decision to offer one-stop phone service. Bundling local phone service, long distance, wireless, paging, and Internet access helped bring new customers to the company. In 1997 Alltel combined its wireless and wireline businesses into a vertical offering for customers. By 1998 the company began billing all of its offered services on one bill, something most customers appreciated.
Ford cited Alltel's previous track record in acquisitions as his reason for continuing that trend. By 1998 Alltel had acquired at least 250 businesses over its 50 years of existence. The purchase of Cellular Plus in Georgia in 1998 brought in more than 23,000 new customers. However, the largest purchase of that year came when Alltel successfully bid for 360 Communications, Sprint's former cellular operation. Th following year Alltel merged with Aliant Communications in Nebraska.
FORD MAKES LARGEST ACQUISITION BY STANDING FIRM
From the time Ford took over at Alltel until 2001, he spent $12 billion in purchasing smaller competitors. He laid out this money even though the revenues for Alltel hovered around $7.5 billion.
In 2001 Ford was ready for the biggest acquisition yet when he bid for CenturyTel, a rural carrier in Monroe, Louisiana. The first offer, in August 2001, was $6.1 billion, or $43 per share, a 40 percent premium over the actual trading price. CenturyTel turned it down because it wanted to sell only the wireless portion of the company and retain a strong local core of phone business. Ford wanted the whole thing, and when CenturyTel refused the offer, Alltel went public with the information that CenturyTel wanted to sell their wireless market. In turn, CenturyTel sued Alltel, and industry analysts assumed the merger was off forever.
Ford believed that the purchase of CenturyTel would enable Alltel to become the dominant rural market, both wireless and wired, and the lawsuit did not deter him from his path. Industry insiders praised his move as a smart preemptive strike by Alltel before the industry heavyweights realized the benefits of developing the rural markets.
But CenturyTel, with its solid base in markets in the rural South, did not overlap Alltel's market, and CenturyTel had also achieved its success through acquisitions. By October of 2001 the offer from Alltel had increased to $9 billion, and again CenturyTel turned it down. Tom Burnett, president of Merger Insight, told Telephony that CenturyTel was merely playing hard to get. "Lawsuits are fairly standard," said Burnett. "It's the way you build a moat around the castle. You discourage Alltel by showing them you're going to fight hard and be a pain in the ass, which will eventually motivate them to raise the price" (October 15, 2001).
After a standoff of nearly six months, Ford decided to buy only the wireless portion of the business, for $1.65 billion, expanding Alltel's hold on the southern wireless market.
STRONG PROFITS IN A SHAKY BUSINESS
Even though Ford did not get exactly what he wanted from CenturyTel, Alltel continued to exert its presence in the field of telecommunications. By the end of 2002, as others in the business suffered, Alltel prospered.
Ford told Business Week in November 2002, after his appointment as CEO, that Alltel's success came from fiscally responsible moves and continued acquisitions. He noted his family's history of running the company with the strategy of maintaining a strong balance sheet. He also credited the markets that Alltel had developed. While not going after the major U.S. metropolitan centers but staying steady in the smaller cities and rural areas, Alltel rode the ups and downs in the business with ease. Ford said that both upswings and downswings in the economy greatly affect the large urban areas, while the smaller markets do not feel the pinch as swiftly. To further solidify its balance sheet, Alltel sold its financial services business for $1.05 billion in 2003, giving it earnings of $1.33 billion, up from $924 million in 2002.
MANAGEMENT STYLE AND STRATEGIES
Ford's management style included careful and watchful consideration of the competition. Although Ford might have been tempted, he resisted the urge to jump into the new technologies developing as the new millennium began. He told Telecommunications Reports in 1998 that he was concerned about each of his competitors, but he would wait before jumping into wireless loops, a newly emerging wireless technology.
In order to compete against the industry giants, Ford stressed local customer service with a good product and pricing that would take care of being swallowed by others, such as BellSouth or AT&T. Even while Ford expanded Alltel's services, customer satisfaction remained at the forefront of company policy.
Ford's success in these areas did not stop the telecommunications union from questioning some labor practices of Alltel. In 1998 the Communications Workers of America let Alltel know that employees needed to be given the same consideration as customers. Charges against Alltel included union breaking and increasing costs of health insurance to workers. Not all customers felt that Alltel treated them fairly, either. A class-action suit filed in Florida in 2002 accused Alltel of using bait-and-switch tactics with new customers. The charges said that the fine print in the contract allowed Alltel to raise prices during a one-year contract period when most customers believed that they were signing up for a set price.
Perhaps mindful of these difficulties, when Ford was appointed CEO of Alltel in 2002 he stressed the importance of communication with employees and shareholders. He was also vocal in his insistence that the traditional long-distance carriers were finished in the telecommunications business, and until they were gone, companies like Alltel would be slow to grow. Until that happened, Ford said, he would continue Alltel's policy of not passing along the cost of competition between too many communications companies to the customer. He told Arkansas Business, "You don't charge your best customers your worst business price. They switch. You can't build a sustainable business that creates jobs, provides good service and really earns a good return for shareholders over a long period of time thinking that way" (July 1, 2002).
An editorial in Telephony portrayed Ford as "articulate and effusive in describing his vision of where he planned to take Alltel" (October 15, 2001). And even though some insiders suggested that Ford's appointment was a form of nepotism, others credited him for bringing new life to the company. Telephony called Ford a contradiction because his youth and easygoing manner were coupled with the intensity required to be a hard-hitting executive and the experience to match—no matter what the reason was for his appointment.
A profile of Ford in the same issue of Telephony cited his penchant for participating in team-roping rodeos, which explained much about his style of business leadership. He has competed in national team-roping finals, with $100,000 of prize money for the winner. Ford said the pressure of the money and the competition made the sport all the more exciting for him. He practiced the same type of pressure in some of his acquisitions for Alltel, while maintaining an assured sense of confidence.
Even when the tensions were high between Ford and CenturyTel's founder, Clarke Williams, Ford laughed at the sniping going on between the two firms. In fact, when Williams made a sarcastic response to one of Ford's bids, Ford smiled with admiration for Williams's style, according to Telephony. And even though Ford lost the chance to acquire all of CenturyTel in 2001, industry analysts said his tenacity in the deal sealed his reputation as a businessman who could withstand high-stakes risks.
By 2004 Alltel's earnings met Wall Street's expectations, but Ford continued to strengthen the balance sheet. He eliminated 600 positions within the company, while consolidating wireless and wireline portions of the business. Even as the wireless industry appeared to be ready for more consolidation, Ford announced that Alltel would buy $750 million of its own shares because there were no major acquisitions on the horizon. Ford maintained that there was no better way to invest the company's profits than in its own shares.
See also entry on ALLTEL Corporation in International Directory of Company Histories.
sources for further information
"Alltel Uses Convergence to Consolidate Market Position," Telecommunications Reports, March 2, 1998, p. 47.
Gubbins, Ed, "Never Blink," Telephony, October 15, 2001, p. 38.
"Looks Can Be Deceiving," Telephony, October 15, 2001, p. 9.
Turner, Lance, "Scott Ford Ascends at Alltel: Third Generation Takes Reins at Arkansas' Telecom Giant," Arkansas Business, July 1, 2002, p. 1.
—Patricia C. Behnke