Ford's Nasser Acts to Refocus Core Strategies By Norihiko Shirouzu
10/12/2001 The Wall Street Journal
DETROIT -- Ford Motor Co. Chief Executive Jacques Nasser took more steps to revamp the strategy and management structure he built after taking the wheel at the No. 2 auto maker two years ago.
Ford announced that six senior corporate officers would retire soon, and that certain other executives would be reassigned. The moves are aimed at focusing the company on its core automotive business, and backing away from Mr. Nasser's effort to move Ford into broader auto-related consumer services.
The question now at Ford is whether Mr. Nasser can succeed in doing enough, fast enough to put Ford's performance back on track and regain the support of employees, suppliers, dealers and investors rattled by the company's recent problems.
Those problems were highlighted late Wednesday when Ford announced it would cut its common stock dividend in half, to 15 cents a share, the first dividend cut in a decade. The move will conserve about $1 billion over 12 months at a time when Ford's cash flow is under severe pressure.
Among the most significant executive changes: Brian Kelley, a vice president responsible for Ford's global marketing and electronic-commerce, will become president of the Lincoln-Mercury sales and marketing division, a position that will be vacated by Mark Hutchins when he retires some time next year. Michael Jordan, a vice president who led Ford's after-market businesses, such as recycling, repairs and parts sales, also will retire. Ford made a number of other executive changes.
In both Mr. Kelley and Mr. Jordan's cases, their old jobs -- important pieces of Mr. Nasser's earlier push to move Ford into broader consumer services -- weren't immediately filled. It is likely that many of the functions in those groups, such as some e-commerce and Internet procurement programs, will be moved into older-line operating groups such as Ford Division.
The moves are part of a broader shift at Ford to a back-to-basics strategy trumpeted by Nick Scheele, the former head of Ford of Europe, who was brought in as head of Ford's stumbling North American operations this summer. Ford chief spokesman Jason Vines said Mr. Nasser is leading the change in direction.
The shift from Mr. Nasser's ambitious vision of Ford as a diverse consumer-goods and services company also has coincided with a new power-sharing arrangement between Mr. Nasser and Ford Chairman William Clay Ford Jr. The two men operate as an Office of the Chairman and Chief Executive, and Mr. Ford is understood to be taking a more direct role in major decisions.
"This is a continuing retrenchment away from that strategy and a move back to the core business," says Gary Lapidus, a Goldman Sachs analyst in New York, referring to the latest management shake-up. "Whether that means the architect of the strategy has diminished in stature remains to be seen. My sense is that there is still support" for Mr. Nasser.
Mr. Ford declined through a spokesman to comment. In a message to employees last month, he said of Mr. Nasser, "Jacques and I have always had and continue to have an excellent working relationship. Jacques has provided strong leadership and continues to meet the challenges head on." Mr. Nasser was unavailable for comment.
Now, with Ford set to report its second money-losing quarter in a row, Mr. Nasser is taking steps to shore up support. He has been courting Ford dealers in grassroots meetings around the country since earlier this year. He asked Ralph Seekins, incoming chairman of the Ford Division national dealer council, in mid-August to survey some 200 Ford dealers and come up with the "five greatest inhibitors" to a cordial dealer-manufacturer relationship, Mr. Seekins said.
In response, Mr. Seekins wrote a 14-page memo highly critical of Mr. Nasser for creating a culture of "distrust" between Ford and its dealers, as well as quality gaffes and delayed launches, among other problems. Mr. Seekins said the dealer body is satisfied with actions Mr. Nasser has so far taken to address the problems, such as divesting Ford's stakes in dealerships. But there are issues that remain unresolved, notably vehicle quality and Ford's effort to certify dealers.
Last week, Mr. Nasser spoke at a dealer convention in Florida. "He said the things we as dealers hoped to hear from him," Mr. Seekins said. "But now we need to see what kind of action plan we can come up together to improve our relationship."