U.S. Ford leadership depth critical to turnaround
Young lions must chart automaker's path to comeback
By Mark Truby / The Detroit News
Ford's new guard
CEO Bill Ford Jr. is grooming a batch of young executives to be Ford's future leaders. They include:
DEARBORN -- The road ahead looks brutal for Ford Motor Co. as top executives prepare to meet with shareholders Monday on the company's 100th birthday.
The company is locked in battle with foreign and domestic rivals. It's overhauling factories, refortifying product lines and urgently slashing costs to bolster profitability. This summer, Ford faces tense labor talks and the critical launch of its F-150 full-size pickup.
Within this vortex of challenges, one question is repeatedly raised inside and outside of Ford Motor's Glass House headquarters: Does the company have the management depth and experience to execute a turnaround and ensure success in the next 100 years?
Since Chairman Bill Ford Jr. grabbed the wheel 20 months ago to become CEO, Ford Motor has seen a mass exodus of top executives and other veteran leaders.
Of the 50 corporate officers at Ford Motor's helm when Bill Ford took over, 20 have retired, resigned or been fired, leaving the automaker's fate in the hands of a relatively young corps of leaders.
"We have definitely made a lot of changes," Ford told The Detroit News in a recent interview. "Some have been retirements, but some have been moved out. And we have some relatively young people in big jobs."
Bill Ford and his personnel chief, Joe Laymon, 50, have launched an intensive effort to identify untapped talent within Ford Motor's vast work force of 340,000 people to groom future leaders and to plan for an orderly succession of power in the coming years.
The company also has quietly started a comprehensive strategic review of the automaker's operations that will determine what products, markets and businesses Ford Motor will choose to focus on in the years ahead.
The success of the efforts will go a long way toward determining whether the company can rebound from its current slump and thrive into the next century.
Turnover at the top
A change in power, whether in politics or business, inevitably triggers major turnover at the top. This was especially true when Bill Ford ousted Jacques Nasser and became Ford Motor's CEO in October 2001.
Heads started rolling immediately, from vice president of public relations Jason Vines to human resources vice president David Murphy to Ford Credit Chairman Donald Winkler.
Many other departures followed. Wolfgang Reitzle, the mercurial BMW AG product whiz Nasser recruited out of unemployment, left in a huff in early 2002. Former General Electric Co. executive Brian Kelley, who was heading Lincoln Mercury, followed.
Some executives, including Kelley and Reitzle, who thrived under Nasser's charge to transform Ford Motor into a diversified consumer company, clearly didn't fit with Ford Motor's new back-to-basics strategy.
Others, like rising finance star Elizabeth Acton, who left in 2002 to join Comerica Inc., found greener pastures.
Many leaders, such as James Donaldson, 60, group vice president for global business development, and John Rintamaki, 61, chief of staff, retired after long careers.
The sum of the departures, though, left Bill Ford with an executive team riddled with holes.
"I didn't even really know the senior management team very well at the time," Bill Ford said last year, referring to his first weeks as CEO. "We were flying by the seat of our pants."
Like his uncle, Henry Ford II, who recruited the fabled "Whiz Kids" mostly from the military after World War II to help manage the company out of a ditch, Bill Ford brought in some help.
Experienced and respected veterans Carl Reichardt and Allan Gilmour were hired in as vice chairmen to provide leadership and stability.
Gilmour, 68, retired from Ford Motor for seven years, was made chief financial officer. Reichardt, 71, a longtime Ford Motor director and retired chairman of Wells Fargo & Co., was placed over Ford Motor Credit Co. and other financial operations.
Experience doesn't come cheap, however. Ford Motor paid Reichardt $7.3 million in restricted stock and benefits in 2002. Gilmour's pay is not disclosed in Ford's proxy statement.
Some veterans stay
Not all of Ford Motor's veterans fled the company.
Nick Scheele, 59, remains president and chief operating officer. Executive vice presidents Jim Padilla and David Thursfield, both 57, handle much of the heavy-duty operating chores. Padilla oversees North America and Thursfield manages Ford's international operations and worldwide purchasing.
Bill Ford is intent on keeping his top echelon intact until younger executives are ready for bigger and more complicated assignments, even if that means refereeing occasional ego clashes.
"I have been very impressed with David (Thursfield) and Jim (Padilla) in that they have been willing to not micromanage and give their people the rein they need to get the job done," Bill Ford said. "I wasn't sure they would."
But there is no question that Bill Ford has had to promote executives faster than he may have liked.
He installed Mark Fields, 41, who earned praise for revamping Japan's Mazda Motor Co., atop Ford Motor's Premier Automotive Group, which consists of European luxury marques Volvo, Jaguar, Land Rover and Aston Martin.
While Fields' talent seems evident and he generally wins high praise from underlings in England's Coventry and Solihull and Sweden's Gothenburg, he admittedly came to the job with no experience in the highly specialized and sometimes snooty luxury car world.
Similarly, Mark Schulz, 41, landed on the career autobahn as more and more senior positions opened up above him. The native Detroiter was running Ford of Turkey two years ago. He now oversees the company's sprawling Asia Pacific and South American operations.
Philip Martens, 43, rocketed from running Mazda's product development to head of design, engineering and development of all Ford, Lincoln and Mercury vehicles in North America.
The energetic Kathleen Ligocki, 46, was plucked from a relatively obscure corporate strategy job to run Ford Motor's key Customer Service Division and is often mentioned by Bill Ford as one of his up-and-comers.
"Every one of these people has met or exceeded our expectations," personnel chief Laymon said.
Still, the squad of 40-somethings are relative babes in the auto industry, where executives typically don't reach such heights until they are near retirement age. Each of them has an assignment that could keep the most grizzled executive up at night.
"Mark Fields has the biggest job he has ever had," Bill Ford said. "Kathleen Ligocki is in a very big job. So is Phil Martens. We have people that I have great faith in, but they are all in the biggest jobs of their careers."
Making the grade
Bill Ford could say the same about himself. At 46, he is by far the youngest Ford Motor CEO since Henry Ford II returned from the World War II Navy to re-establish family control.
And he readily concedes he didn't expect to run Ford this soon.
Despite his limited experience, Bill Ford increasingly finds himself pulled into the nitty-gritty details of running Ford Motor's far-flung operations. Although it's sometimes unavoidable, he's not sure it's always the best use of his time.
Even so, most industry watchers say he's making the grade.
"Is Bill qualified to run Ford? Yes, there's no question," said Steve Girsky, auto analyst with Morgan Stanley. "Would he have become CEO at his age if he didn't have the name Ford? No way."
By comparison, GM's top management team, led by CEO Rick Wagoner and vice chairmen Bob Lutz and John Devine, are viewed by Wall Street as well-seasoned and battle-tested.
"It's not that I necessarily mark Ford down for its management team," said Rod Lache, an analyst with Deutsche Bank Alex. Brown. "I mark GM up."
The good news for Ford in all of this is that young execs can gain experience and provide leadership for decades to come. Over the years, many Ford managers made vice president just in time to retire.
"We lost a lot of talent in a fairly short number of years," Ford veteran Gilmour said. "One of the results of that is some of the younger talent will be in their jobs longer than traditional at Ford."
Bill Ford and Laymon recently tapped a handful of up-and-coming managers to round out a small task force to start mapping out Ford Motor's longer term strategies.
"We will be in the personal transportation business for the next 100 years," Bill Ford said. "That form will change dramatically. And we need to be nimble enough and forward looking enough to anticipate those changes."
While Bill Ford and his young lions represent Ford Motor's future, he hasn't ruled out signing a key free agent or two from outside the Ford Motor universe.
So far, though, he's finding the pickings a little slim. There are few qualified candidates who are willing to jump and not locked in by ironclad noncompete clauses.
"You have to be very selective going outside the company," said David Cole, head of the Center for Automotive Research in Ann Arbor.
One key newcomer is Barbara Gasper, vice president for investor relations. Ford Motor plucked the 49-year-old from PricewaterhouseCoopers Consulting to improve its communications with Wall Street, which has been skeptical of Ford's turnaround plan.
Bill Ford is cautious
With Bill Ford locked in as CEO for the foreseeable future, it's easy to understand why taking a top job at Ford Motor wouldn't be all that attractive to outside executives aspiring to run an auto company someday.
Gilmour, for example, would like to cede his chief financial officer duties and take on a more supervisory role. But Ford Motor's efforts to score a high-profile replacement have so far proven difficult, in part because Bill Ford is leery about wooing a candidate unfamiliar with the auto industry.
He has good reason to be skeptical. Nasser, his predecessor, recruited extensively from companies like GE with mixed results at best. Bill Ford is determined to avoid the trap of going outside just for the sake of going outside.
"I have pretty well had it with outsiders coming in and crafting grand strategies that people end up scratching their heads and saying, 'I am not sure what this means,' " Bill Ford said.
Clearly, Ford Motor's best bet is to dip into the well of talent that has always existed inside its global walls.
"We have a strategy to try to rely on Ford's experienced folks," said Laymon, the human resources boss. "The pool is very deep."
Bill Ford and Laymon have made it clear to top managers in recent months that leadership development is a priority.
In the meantime, the new mantra at Ford Motor is stability, teamwork and an end to the disruptive churning at the top of the Glass House.
"We have the most dedicated people," Bill Ford said last week.
"Our people will do anything to make this work. What they are looking for from us is the game plan and the leadership to allow them to compete."
Mark Fields, 41
After a successful stint running Mazda Motor Co. in Japan, Fields was named chairman and CEO of Ford's Premier Automotive Group in July 2002. He's charged with turning Ford's European luxury brands -- Volvo, Jaguar, Land Rover and Aston Martin -- into solid profit-makers.
Mark Schulz, 41
The native Detroiter has impressed Bill Ford Jr. and is riding the corporate fast track. How fast? He's now president of Ford's Asia Pacific and South America operations, a job he has held since August 2002. Just two years ago he was heading the automaker's Turkish unit.
Kathleen Ligocki, 46
Joined Ford in 1998 after former CEO Jacques Nasser became impressed with her management skills while working for the supplier United Technologies Corp. She is currently a vice president in charge of Ford's massive Customer Service Division.
Philip Martens, 43
Ford's new product chieftain, Martens made his reputation at Mazda developing the Mazda6 sedan and RX-8 sports car. He currently oversees the design, engineering and development of all Ford, Lincoln and Mercury cars and trucks sold in North America.
(Photo)Ford Motor Co.;Max Ortiz / The Detroit News
Carl Reichardt, 71, right, was brought in by Bill Ford Jr., center, to oversee Ford Motor Credit Co. Nick Scheele, 59, left, is president and chief operating officer.
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My next Ford.....