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Ford Jr. takes on role he was born to play
10/31/2001 - Updated 07:33 AM ET From USAToday
Ford Jr.
takes on role he was born to play By James Cox and David Kiley, USA TODAY William Clay Ford Jr., new chief executive of Ford Motor, justified his decision to race to the scene of a tragic factory explosion in 1999 by saying that Ford employees were family to him.
Related story Image woes help lead to Nasser's ouster Detroit Lions players and employees are family, too, he has said.
"Family" was the word he chose again Tuesday, using it often as he talked about
how he ended up CEO of the auto company founded by his great-grandfather, Henry Ford. "I bleed Ford blue," he told cheering employees.
He replaces the hard-nosed, controversial Jacques Nasser, ousted late
Monday, as CEO. But blood loyalties and family history have long stirred ambivalence in Ford Jr.
He has refused over the years to read biographies of the visionary Henry. He quit the company in 1995 after serving in 17 midlevel management jobs. And he recently fled the family's multimansion compound in exclusive Gross Pointe Woods, Mich., buying a house in Ann Arbor.
"I certainly never sought this job. Lord knows, I don't need it," Ford told The Detroit News. "But when I saw what was happening to our company, I thought I could help us.
It was clear to me that we had relationships with our employees that are not what they could be, and relationships with our dealers and other constituencies are not good."
Bill Ford, as the 44-year-old likes to be
called, is clearly his family's choice to head the world's No. 2 automaker.
But as apples go, he could not have fallen farther from the tree.
Great-grandpa Henry was a driven, self-educated man, a mechanical genius
who fought unions and, later in life, became an overbearing, anti-Semitic crackpot. His son, Edsel, eventually got the company reins but died struggling with the pressures of business and his increasingly bizarre father.
Young Bill got a prep school education before going to Princeton and MIT. He is a tae kwon do blackbelt, a student of Zen and Tibetan Buddhism and a folk guitar player.
His most notable contribution since
becoming chairman 2 years ago has been to try to make Ford the most environmentally friendly automaker. He has horrified many in the industry — and many at the company — by publicly blaming auto emissions for greenhouse
gases causing climate change. He speaks passionately about a future with cleaner alternative fuels, recyclable cars and compostable parts.
At the moment, Ford's problem is that its earnings are decaying like
compost. The automaker lost $692 million in the third quarter as sales fell 9% and unit volume dropped 15% in North America.
Market share in North America, Ford's most profitable area, has been sliding as defect
rates have skyrocketed.
The company ranked last among the seven largest carmakers in a quality survey earlier this year.
Heading into a recession and a cyclical downturn in auto sales, Ford has lost its dominance in
the highly profitable pickup and sport-utility categories.
The Taurus and Sable, the company's workhorse passenger cars, are tired. Operations in Europe, Latin America and Asia are beset with problems.
The
biggest blow to the company's bottom line and its pride has been the Explorer fiasco. Ford spent $500 million last year on the recall of 6.5 million tires for the Explorer and Mercury Moutaineer.
It will take a $2.1 billion after-tax charge to pay for costs associated with replacing nearly 13 million more Bridgestone/Firestone tires.
Pending lawsuits and lost vehicle sales could add hundreds of millions more to the
final tab.
To dig out from the mess, Bill Ford has surrounded himself with grayer, wiser heads. That includes Nick Scheele,
57, named Tuesday as president and chief operating officer; Jim Padilla, 55, who will take
over as head of Ford North America; and Carl Reichardt, 70, named vice chairman and head of the finance committee.
Coaxing Reichardt, former chairman of Wells Fargo, out of retirement seems a major step in the right
direction. He has Wall Street's trust, essential for a company that has gone through three CFOs in 3 years.
"We need to rebuild relationships," Ford said.
"I'll be spending a lot of time with Wall Street, dealers, employees, suppliers. A lot of those relationships are broken or not healthy."
Key constituencies Key will be suppliers and dealers.
Suppliers, who once stood in line to win Ford's business, complain that the automaker has been especially brutal in dictating price cuts to them. Even worse, they contend they get little in return for helping Ford design
new engines because once the design is finished, Ford puts supply contracts up for open bid.
Dealers want assurances that somebody is listening. They say Nasser barely seemed to know they existed until it was too
late. He infuriated them by exploring the idea of Ford-owned dealerships and service centers. He seldom bothered to show up at dealers' national meetings.
In May, Nasser seemed to acknowledge that he had
erred. "I believe we are only hurting ourselves when we think, speak or act as if our partners are outsiders," he wrote in an internal memo.
Ford isn't broken, says Hoot McInerny, a legendary Detroit-area
Lincoln-Mercury dealer. "What would it take to fix things? Quality, quality, quality," he says. "We just need another turn of the wrench."
Nasser, an Australian of Lebanese descent,
wanted constant change and improvement.
He saw himself as a reformer in the mold of GE's Jack Welch. Even though he was a 33-year Ford veteran, he had spent little time building valuable loyalties in Dearborn and never bothered to court the family.
Nasser
plunged Ford into new areas, and in the process, he took his eye off the basics, analysts say.
"If you've got good products, good quality, you and I could run Ford Motor Co.," McInerny says.
"He got caught up in the downturn of the economy, and the crowning blow was the Explorer and the tires."
Nasser's in-your-face style rubbed Ford family members the wrong way. The clan has a history of
deflating larger-than-life executives on the company payroll.
Bill Ford's uncle, Henry II, fired then-president Lee Iacocca after growing irritated that Iacocca's outsize personality had become Ford's public persona.
Ford is "structured like an organization of baronies, and the family does not like when a CEO has too strong and dominant a personality," says Gerald Meyers, a former Ford executive and former CEO of American
Motors.
Various Ford heirs control 40% of the company's voting shares, each of which has 17 times the voting power of an ordinary share of common stock.
The family has been collecting $85 million a year in
dividends. The board's recent decision to slash the dividend dropped the family's cut by about 40%. And it's not just the dividend checks: The value of Ford family shares has fallen almost 50% in the past year.
"Billy" — as he is called by the other 12 Fords of the fourth generation — owns shares worth about $90 million at current prices, according to Forbes magazine's Richest 400 issue.
For love of the company
Ford, himself, said his family was "thrilled" to have one of its own atop the company again. "But I'm not approaching this job as a member of the family, but as someone who loves the company."
Ford and Scheele promise a return to the basics, meaning higher-quality cars and trucks. Along with Padilla and Reichardt, they are expected to make decisions more by consensus than the autocratic Nasser, who had 16
managers reporting to him directly before July.
"I want the company to succeed. To do that, we need to get the best people.
And if the best people are outside Ford, we will go after them or we'll grow them up from inside," Ford told The News. "I listen a lot. I encourage a lot.
I want to hear what people think. This
company is too big for any one person to run, I don't care who you are."
Bill Ford, industry insiders say, is not likely to stick around as CEO more than 3 or 4 years. By then, Scheele is likely to retire, and
the company will go in search of a professional manager to be its next CEO. Ford is expected to be more involved than a figurehead but somewhat less of an authority figure than many other CEOs.
"William Clay
Ford's presence may provide a more stable operating environment," says Merrill Lynch analyst John Casesa. Still, the downturn in the economy and in the industry are "likely to overshadow even the best efforts of
the new Ford management team for the near future."
Ford Jr.
bleeds Detroit Lions "Honolulu blue," as well as Ford blue. He said Tuesday that the CEO's job would leave him less time with his beloved Lions.
Lions employees say he knows everyone from the coaches to
the interns. They recall when he used to play in Friday afternoon touch football games — usually as quarterback — with the staff.
Inevitably, running his great-grandfather's auto company will cut into the time he can
spend with his father's football team.
"Unless they need me to play quarterback," he joked about the 0-6 Lions. "And the way things are going. ..."
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