The traditional contradiction, "The King is dead! Long live the King," might apply very well to Ford Motor Company following its October 30 palace revolution. Hard-driving, visionary, abrasive Jac Nasser is out as president and chief executive officer. The King is dead.
Especially with an untimely ceremony November 9 dedicating the new California headquarters for Jac's favorite brain-child -- Ford's Premier Automotive Group -- the big question now among veteran auto industry observers is: will his royal proclamations and appointments live on?
There's a lot of precedence for an avalanche of rolling heads from the corporate guillotine. In 1978 when King Henry II of Ford dismissed the Grand Duke Lee, he followed up with a drunken 3 a.m. call firing
PR executive Walt Murphy. A host of Lee's knights subsequently trekked across town to help him save -- at least for the time -- the fiefdom of Chrysler.
And even though new King William acknowledges his kingdom has long had a "cult of the personality" fixation, the culture of tossing out-of-favor royalty and their knaves into the moat is not limited to Dearborn. Just a year ago, when the German masters dethroned captive monarch Jim Holden of DaimlerChrysler, along with him went
PR Veep Tony Cervone, who had held his crown appointment less than two months.
Last month, two of King Jac's dukes got the executioner's ax the same time he did, Human Resources VP David Murphy and Communications VP Jason Vines. Who knows when the next round will begin and where it will end.
PAG on the block?
Likely under the new crown's stare is the Premium Automotive Group (PAG). Looked at objectively, PAG has its pros and cons. The idea started more than a decade ago with Ford acquiring a very sick Jaguar for $2 billion in a bidding war with General Motors. At that time, GM was making a comeback in Europe and recovering leadership there over traditional foe Ford. Many sneered at the Jag deal and its prospects, but to the amazement of practically everyone, Ford eventually managed to turn the sow's ear into a silken purse.
Originally, GM was thought to have gained a valuable consolation prize with its buyout of Saab. But Saab has never had Jaguar's luxury image, and thus has not provided GM with the true upscale brand (read: Benz or Beemer) it wanted for both European and world markets. Jaguar, on the other hand, has undoubtedly brought Ford the world-wide luxury image it desired, regardless of whether it has made any, or much, money for the parent company.
More recently, under Nasser, Ford managed to acquire Volvo's car business in 1999 from the Swedes and Land Rover from an exasperated BMW in 2000. Together with reviving another old gold British brand, Aston Martin, Ford had the makings of what became its PAG, a global package of upscale brands, products, people and dealer organizations.
Along the way, also on Nasser's watch -- whether his idea or merely with his assent -- the company moved Lincoln-Mercury from Ford homeland Dearborn in Michigan to sunny California. The idea purportedly was to empower Ford's domestic upscale division people to "think outside the box." By being in California where Asian import brands were headquartered, the land where automotive trends began, Lincoln-Mercury would be on the cutting edge, rather than sitting around Michigan watching to see what Pontiac and Cadillac would do next.
The next step was to remove the hyphen from between Lincoln and Mercury, to set each on its own two feet, so to speak. Then, noisily, L & M were added to PAG. Lincoln would become a worldwide brand as "American Luxury." So far so good, at least in theory.
Luxury hitch
The hitch came when Nasser paid a whopping signing bonus to acquire Dr. Wolfgang Reitzle from BMW to run PAG and allowed him to establish the global PAG office in London, England. Operationally, that's a nightmare. London is six hours time distant from Dearborn -- which can be handled, albeit imperfectly, within the normal 8-hour business day of both London and Dearborn. But California? Whoa! That's another three hours difference, and not strictly within a normal business day. Even at 6 a.m. Pacific time, an ungodly hour for office staff to start, the boss in London is over the crest of his day. At nine on the coast, Dearborn has gone to lunch and London has packed its umbrella and headed in the limo for the club or home. Not exactly efficient and decidedly awkward.
Further, L/M (see Ma, no hyphen) execs now in California have had to travel all the way to London for staff meetings -- a huge amount of wasted time and money, even before the psychological barriers to air travel erected Sept. 11.
A London HQ might have been wise if there were a true, evenly distributed world market for PAG's brands. But the truth is, the North American market is the world's biggest, so it makes little sense to have L/M people in California, who handle profitable brands which are overwhelmingly North American, reporting to a boss in London when prior to moving west they only had to hop an elevator or at worst drive a few miles for such meetings.
When it comes to the established "world" brands of Jaguar, Volvo and Land Rover (Aston Martin is inconsequential in volume), they are primarily "East Coast" brands in North America, and accordingly had their import headquarters there. True, they have substantial sales in California, especially Jaguar, but it is NOT the center of their western hemisphere universe. Except in the eyes of an Australian, you might say.
Other problematic proclamations
That's just on the side of Jac's royal proclamations. When it comes to appointments of, well, dukedoms there are other problems. Nasser made a big thing out of seeking, hiring and promoting female executives and many would say, About Time. Likewise, Nasser aggressively sought executives from outside the auto industry. The result was a high proportion of new Ford executives who in too many cases had NO, or at best insufficient, automotive experience. The American mass market for cars and trucks is NOT like the refrigerator, tooth paste or niche European luxury car market.
There have been at least two consequences of this. One, internal morale has been crippled if not destroyed, resulting in all kinds of problems. Even Ford's home-grown supply of women managers who've been carefully working their ways up the corporate ladder had to be discouraged by importation of OUTSIDE women appointed to top spots. Two, incredible mistakes have been made by people who, because of applicable inexperience, did not know any better. Ford simply lost its institutional memory for how to engineer, develop and manufacture cars and trucks with minimal fuss. It's no wonder Ford's quality and productivity collapsed almost overnight during King Jac's reign.
So, what now? Are the phalanxes of Nasser dukes and duchesses looking over their shoulders as their king's noggin rolls into the basket? Is the hardly established PAG in danger? Is the so-called Motown West already at risk just as it puts down its roots?
If this doesn't sound like the script for a soap opera, it's certainly not far off.
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