- The Washington Times - Wednesday, October 31, 2001

From combined dispatches
Ford Motor Co. yesterday ousted its president and chief executive amid mounting troubles at the world's No. 2 automaker, replacing him with a descendant of the legendary industrialist who founded the company nearly 100 years ago.
The move followed reports of serious rifts between William Clay Ford Jr., the great-grandson of automotive pioneer Henry Ford, and outgoing CEO Jacques Nasser. Already Ford's chairman, the 44-year-old Bill Ford now becomes the first member of the family to take full control of the company since 1979.
Mr. Nasser was once regarded as among the best managers Detroit's Big Three automakers have ever had. But his unceremonious departure came shortly after the company reeling from the protracted Firestone tire crisis, an aging product lineup and string of quality glitches reported a $692 million third-quarter loss on top of a loss the previous quarter.
That marked the first time the company had posted two consecutive quarterly losses in nearly a decade, and showed that many of Ford's woes started well before any economic fallout from the attacks on the United States.
"We need to be a company that has quality products, that customers want to buy, and feel that they can trust. We need to be a company that investors want to invest in," Mr. Ford said in a brief speech to employees yesterday. "Finally, we need to be a company that the world looks to, to be a leader in doing things right, and doing the right thing."
The shake-up came on the same day that Ford announced it is recalling more than 1 million vehicles because a faulty switch on the windshield wipers could cause a fire.
Ford spokesman Mike Vaughn said 40 fires have been reported in connection with the problem, but no flames have entered the passenger compartment.
No accidents or injuries were reported, Mr. Vaughn said.
The recall involves 2000 and 2001 models of the Ford Focus, Taurus, Expedition, Excursion and F-series pickups; the Lincoln Continental, Town Car and Navigator; and the Mercury Sable. Nearly 1.1 million of the recalled vehicles were made between February and September 2000.
A switch on the plastic cover of the wiper motor gear case can malfunction and overheat. That can cause the wiper to fail and cause smoke or fire on the plastic cover.
Ford, based in Dearborn, Mich., also elevated Nick Scheele, recently named vice president for North America, to the post of chief operating officer.
Mr. Scheele, a former chairman of Ford's European operations, previously told employees that the company needs to get "back to basics," focusing on core automotive operations rather than electronic commerce and other ventures championed by Mr. Nasser.
Jim Padilla, group vice president for manufacturing and quality, will take over Mr. Scheele's job as head of Ford's North America division. The board of directors approved the management changes early yesterday, Mr. Ford said.
While Mr. Ford has held numerous jobs with the automaker, his experience is not nearly as broad as that of previous chief executives.
But he bridled, during a news conference, at a reporter's suggestion that he had only been given control over Ford because of his ties to the family.
The distribution of Ford's Class B shares gives family members 40 percent of voting rights on the company's board.
"I have a track record, the people around the company know me. The board felt that I was the person at this point to help heal the company and put it back on track," Mr. Ford said.
He stressed that he would be relying heavily on Mr. Scheele to run Ford's day-to-day automotive operations, however.
On the plus side, meanwhile, David Cole, veteran director of the Center for Automotive Research in Ann Arbor, Mich., noted that employees have historically felt a great loyalty to the Ford family, which should help the new generation of Ford leadership,
"The challenge is he's got to rally the troops and get the company focused quickly on fundamental parts of the business designing and building cars and trucks people want to buy," Mr. Cole said.
In its management reshuffle, Ford also said its board member and former Wells Fargo Chairman Carl Reichardt, 69, was joining the automaker as vice chairman in charge of finance.
Bill Ford is the first member of the Ford family to assume control of the company since his late uncle, Henry Ford II, stepped down as CEO in 1979.
Henry Ford II was responsible for ousting auto industry icon Lee Iacocca as chief executive at Ford in the 1970s. Mr. Iacocca later went on to save Chrysler Corp. from bankruptcy.
Rumors of Mr. Nasser's imminent departure had swirled since July, when the automaker announced a power-sharing agreement between Mr. Nasser and Mr. Ford that was widely seen as clipping the chief executive's wings.
Ford sources said the company and Mr. Nasser, who was paid $12 million last year, were still discussing what would happen to his stock options.
At the end of fiscal 2000, Mr. Nasser held options on 4.5 million shares.
Since August last year, Mr. Nasser, 53, has presided over a company mired in the Firestone tire crisis. Ford has earmarked $2.6 billion to pay for recalling 19.5 million tires, which have been linked to hundreds of deaths and injuries in Ford vehicles on U.S. highways.
Ford shares closed 12 cents lower at $16.09 on the New York Stock Exchange. Ford shares have declined 31 percent this year, the second-largest fall among world automakers after France's Renault SA. Shares of rival General Motors Corp. have fallen 16 percent.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide