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Nasser out as Ford CEO
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October 30, 2001: 2:15 p.m. ET
William Clay Ford, great-grandson of founder, to lead No. 2 automaker.
By Staff Writer Chris Isidore
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NEW YORK (CNNmoney) - Ford Motor Co. said Tuesday that Jacques Nasser will be replaced as chief executive officer by William Clay Ford Jr. as the nation's No. 2 automaker struggles to stem losses.
In addition, Nick Scheele, the group vice president for North America, will become the new chief operating officer of Ford Motor, while Jim Padilla, 55, group vice president for manufacturing and quality, will take over Scheele's job as head of the North America unit.
And longtime Ford board member Carl Reichardt, the retired CEO and chairman of Wells Fargo & Co. (WFC: Research, Estimates), will take the title of vice chairman of the board and take an active role overseeing financial operations, including Ford Credit.
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Jacques Nasser
Ford CEO is out of a job. | |
The moves come as Ford has been cutting management positions and other jobs in recent months during a review of company operations as it struggles to return to profitability.
Ford (F: up $0.04 to $16.09, Research, Estimates) stock was little changed in midday trading after the long-anticipated announcement.
Scheele, who was brought to North America this summer after making improvements in Ford's European operations and luxury brands, was already conducting a review of the businesses looking for cost savings. Scheele said Tuesday that review was about halfway done, although he said that the pre-Christmas deadline for a final cost-cutting plan could be pushed back to early January. He and Ford told a Tuesday news conference that all parts of the company are under scrutiny.
"We won't hesitate to pull the trigger if something isn't fitting in well," said Ford. "I think we have lost the focus in a couple of areas."
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William C. Ford talks about his new role as CEO of Ford Motor Co.
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Ford, 44, is the great-grandson of company founder Henry Ford and nephew of the late former chairman and CEO Henry Ford II. He also is great-grandson of Harvey Firestone, founder of the tire company that has clashed with Ford Motor Co. in the last year over which company is to blame for fatal rollover accidents involving the popular Ford Explorer sport/utility vehicles and Firestone tires.
A Princeton graduate with a master of science degree in management from MIT, the scion joined the company in 1979 as a product planning analyst and was elected chairman of the board in September 1998.
He admits he has a different kind of reputation than the typical CEO, as he said his strong pro-environmental views have given him a "tree-hugger" label. He insisted Tuesday his views on the environment are not at odds with company's core objectives and will be integrated into Ford products through use of improved technology.
He also has a relatively pro-employee, even pro-union, reputation, and he said improving relationships with the United Autoworkers union as well as other employees and constituency groups would be a key to his job going forward.
"You can't rebuild the business if you don't have strong partnerships," Ford said. "Dealers, UAW, white collar employees, suppliers, Wall Street - we have a lot of relationships that are important to us. A lot of those are broken or not healthy."
Ford becomes the third descendent of founder Henry Ford to hold the top executive job, but the first since his uncle Henry Ford II stepped down as CEO in 1979. Ford also said that while his name and his family's control of the company's voting stock was a factor in his selection, he didn't think it was the deciding factor.
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William Clay Ford, great-grandson of Ford Motor Co. founder Henry Ford, is the new CEO of the world's No. 2 automaker. | |
"I would hope the board of directors takes their job more seriously than putting in the guy with the right last name," he said at the press conference. He insisted that despite reports of problems between him and Nasser, the two have a good relationship and had a cordial conversation Monday when discussing the change. While there has been speculation about Ford assuming the CEO for some time, he said it was "fairly recently" that he and others on the board decided it was time to make the change.
"Until very recently (Nasser) and I felt the model we had in place was going to work," he said. The recent problems at the company had raised the level of speculation about a change to such a level that a change became necessary, he said.
"To say we were distracted was an understatement," he said. "It was reaching a paralysis point for a lot of our management."
Ford also is a black belt in the martial art of tae kwon do and the vice chairman of the Detroit Lions football team, which his family also controls.
"You'd think the Lions won a game or something," he joked when he was greeted by applause before his remarks to employees.
Nasser, 53, joined Ford of Australia in 1968 as a financial analyst. Known as Jack, his cost-cutting efforts earned him the nickname "Jack the knife."
Some analysts said that Nasser's departure was a good thing for the company.
"Nasser's been the primary architect of a failed transformation of Ford from its core automotive heritage to some expansive consumer-centric organization, which we think employees, dealers, suppliers and investors have found to varying degrees to be somewhat incomprehensible," said Scott Hill, auto analyst with Sanford Bernstein, told CNNfn's Market Call Tuesday.
Nasser was the company's point man in the dispute with tiremaker Bridgestone/Firestone Inc. over which company was responsible for the safety problems and hundreds of deaths linked to Ford Explorers equipped with Firestone tires. Ford Motor eventually decided to replace Firestone Wilderness AT tires on its vehicles at its own expense.
In addition to the replacement of Firestone tires, which cost Ford about $2.1 billion after taxes, the company has been hit in recent months with declining market share and narrowing of its competitive advantage over other U.S.-based automakers in measures of productivity amid a series of recalls and problems with the launches of new vehicles.
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On Monday, the company announced it was following General Motors Corp. (GM: Research, Estimates) and DaimlerChryler AG (DCX: Research, Estimates) in extending popular but expensive zero-interest financing for many of its new cars. The company has pointed to the cost of those incentives as part of the reason for its losses in the third quarter, and warned it would have trouble making money in the fourth quarter as well. Ford executives confirmed that warning Tuesday without giving more specific financial guidance.
In his comments to employees Ford emphasized the continuation of much of Ford's other top management in his announcement.
"We have a strong, experienced management team in place," he said. "Ford Motor Company is not, and never has been, about one person." 
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Ford extends zero-interest incentive - Oct. 29, 2001
Ford hits 3Q loss target, warns on 4Q - Oct. 17, 2001
Ford considers more job cuts - Aug. 30, 2001
Ford cutting managers, lowers targets - Aug. 17, 2001
Ford shuffles execs in bid to lift quality - July 13, 2001
Automaker productivity report shows GM gaining on Ford - June 14, 2001
Ford posts narrower-than-expected loss - July 18, 2001
Ford to replace 13 million Firestone tires - May 22, 2001
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