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Old 10-28-2002, 13:28   #1 (permalink)
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Auto gala tests ethics

Ford is flexible about accepting free tickets to preview
October 28, 2002
BY JAMIE BUTTERS
AND JEFFREY MCCRACKEN
DETROIT FREE PRESS BUSINESS WRITERS

Who would think a fund-raiser could cause so much commotion?
When the Cobo Center doors open for the glitzy Detroit auto show charity gala in January, only Ford Motor Co. executives -- and none from General Motors Corp. or the Chrysler Group -- might have the OK to be there as guests of a supplier amid the champagne sipping and car ogling.

The Dearborn automaker is the only local automaker that might allow employees to accept $350 tickets to the black-tie party from suppliers and other business partners.

GM has long prohibited accepting such tickets, and last week the Chrysler Group circulated a memo that clarifies a policy that prohibits accepting suppliers' tickets to the black-tie event and the late-night afterglowdinner parties.

But Ford's policy is more vague. It allows attendance at such events, but only to the extent that it would "withstand public scrutiny."

Automakers set ethics policies largely to keep executives from being influenced by friendships or factors other than cost, quality and delivery of parts and services.

The note to Chrysler employees from Nancy Rae, senior vice president for human resources, was an apparent response to the wave of accounting and other ethics scandals that have sunk or embarrassed companies, like Enron Corp., CMS Energy Corp. and WorldCom Inc.

"Our company wants to make sure that it and its employees are behaving properly," said spokesman Ken Levy. "We want to alert our employees to something that's already in place."

The memo was issued five months after the company fired four employees and suspended one other for an alleged kickback scheme at the Sterling Heights stamping plant. The four workers were accused of having accepted at least $100,000 in gifts and money in return for funneling work and contracts to suppliers.

Levy said the memo about the auto show gala was not related to the Sterling Heights case, nor does it reflect widespread ethical concerns.

Ford and Chrysler let employees attend two entertainment events per year with each supplier, as long as the events do not involve travel or overnight stays.

Ford reviews its Standards of Corporate Conduct with employees every year and requires them to pass a quiz over the Internet to demonstrate that they understand the material.

"Ford takes this very seriously," said spokeswoman Kathleen Vokes.

Whether that would allow attendance at the charity preview as a supplier's guest is not clear.

"We have a policy and our employees are expected to follow it," said spokesman Paul Wood. He said he was not aware of any employees seeking clarification on the matter.

There is no such confusion at GM.

That carmaker's policy, among the strictest in corporate America, forbids all but the most nominal gifts. Employees cannot accept sports tickets, golf outings or steak dinners from vendors.

GM adopted the code in 1996, after a few lower-level executives were convicted for accepting bribes to steer work toward certain suppliers.

Even in today's more formal business climate, casual relationships with business partners are important, said David Cole, president of the Center for Automotive Research in Ann Arbor.

"I feel like Ford's way is more workable," Cole said. "People who are going to break the rules will do so no matter what you set up. Just because a few people have abused it, I don't think you throw out the baby with the bathwater. But it's Chrysler's prerogative to do what they want."

Exercising that prerogative has ripple effects around metro Detroit.

Chrysler's decision and the possibility that Ford would copy it is crimping party plans for suppliers. They're already booking restaurants for afterglow dinners.

Chuck Fortinberry, co-chairman of the North American International Auto Show and owner of Clarkston Chrysler Jeep in Clarkston, said he gets a copy of Chrysler's code every year, as do other dealers, suppliers and employees. Fortinberry wondered if the policy should leave some wiggle room for charity fund-raisers. "That might be something they would make an exception for," he said.

But they don't.

The 17,500 tickets at $350 apiece raise more than $6 million for 11 charities, including the Boys & Girls Club of Southeast Michigan and the March of Dimes.
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