By Alex Taylor III

(FORTUNE Magazine) – IS THERE A NEW LEADER IN FORD'S future? Chairman and CEO Bill Ford, 48, has apparently been doing some soul-searching about his ability to rescue the company that his great-grandfather started. His conclusion: Somebody else may be able to do the job better than he can.

People close to the situation describe him as distracted, avoiding operational decisions, and unwilling to make the tough calls needed to resize the company. Having grown up thinking of Ford Motor as part of his extended family, he has difficulty ordering layoffs or firing favored executives, preferring to kick them upstairs into new jobs. He's stretched thin by his outside life too, which includes serving as an eBay board member, a Princeton trustee, and vice chairman of the Detroit Lions.

Indeed, his conflicted behavior recalls a certain melancholy Danish prince. The CEO has already extended job offers to two of the brightest stars in the auto industry: Carlos Ghosn, CEO of both Nissan and Renault, and Dieter Zetsche, the newly named chairman of DaimlerChrysler. But in Hamletesque fashion, his recruiting pitch was halfhearted. Contrary to well-circulated rumors, he apparently did not offer the CEO job to either man. Rather, he dangled only a No. 2 job to start. No wonder that while Ghosn was reportedly tempted by the chance to live in the U.S., both men turned him down.

Ford's moves also show concern about the lack of depth in the management team under him. A reorganization of the company in the 1990s called "Ford 2000" stripped out layers of managers with profit-and-loss responsibility. More executives left a few years later when then-CEO Jac Nasser recruited a pack of since-departed outsiders to make over the company. Important jobs like chief financial officer and Ford of Europe head have become revolving doors that seem to spin on an annual basis. In September, Bill Ford put North American operations under the control of 44-year-old Mark Fields, a talented Harvard MBA but one whose entire operating experience has come overseas.

Ford Motor needs help now to shrink its operations to fit its U.S. market share, which has fallen from 26.4% ten years ago to 18.8% today. Its North American auto business produced $907 million in pretax losses during the second quarter alone. The company has already said it will cut at least 2,750 salaried jobs this year, but there are reports that as many as 30% of North American salaried workers--about 10,500 people--could be on the block. Ford has been slow to make public the details of the massive restructuring, which will probably include closing several assembly plants and furloughing thousands of blue-collar workers, because of ongoing negotiations with the United Auto Workers.

Will the board step in and ask Bill Ford to give up his CEO post to make room for a new gunslinger like Ghosn or Zetsche? Not likely, since Ford's family controls 40% of the shareholder votes. But that doesn't rule out the possibility that he could decide to step down himself while remaining as chairman. In a chat with reporters recently, he seemed to leave open the option. "I'm not looking to go anywhere from this job," he said. "But if you're asking, 'Am I going to continue talking to executives around the industry?' Absolutely."

He can't move fast enough. Analysts from Standard & Poor's rating agency worry that Ford's competitive position has deteriorated in the past few months as SUV sales have plummeted, further endangering its financial health. And Merrill Lynch predicts another big sales slump as the impact of employee discounts wears off. Time is running short for Prince William. -- Alex Taylor III