U.S.A.:Outsiders go home: Hostile culture at Ford ?
Many execs hired from other companies found hostile culture at Ford
By AMY WILSON | Automotive News
DETROIT -- When Ford Motor Co. CEO Bill Ford needed another strategist in his inner circle, he chose Bruce Blythe, a retired Ford executive and longtime Ford family adviser who was living in London.
For Ford watchers, Blythe's return in September was consistent with the pattern.
Ford Motor's corporate culture promotes its own and rejects outsiders. Bill Ford has been reinforcing the decades-long pattern at the company by promoting Ford lifers and even bringing back Ford retirees such as Blythe and Vice Chairman Allan Gilmour.
"Very strong cultures, they act like antibodies to a virus," says an executive hired from outside by Ford in the late 1990s when former CEO Jacques Nasser was hiring dozens of people from other companies and industries. "And an outsider is a virus. They all get together and try to eradicate the virus."
Indeed, of those dozens of outside transplants hired into the executive ranks, most have been rejected by the Ford body.
The auto industry traditionally has been an insular corporate culture. And a CEO as inexperienced as Bill Ford naturally might rely on trusted insiders in a time of crisis.
As it attempts a massive turnaround in a global economy, Ford Motor has retreated to an attitude about outsiders that hearkens back to the 1960s and 1970s and to former Chairman Henry Ford II. After sparking a massive infusion of outside talent to revive the company after World War II, the uncle of the current chairman settled into a more traditional stance of emphasizing home-grown talent.
General Motors, meanwhile, has at the top level successfully broken away from its own insular habits with outside hires such as CFO John Devine, formerly of Ford, and Vice Chairman Robert Lutz, who had retired from the former Chrysler Corp.
An outsider who had a short stint at Ford in the early 2000s says the culture keeps insiders from welcoming high-level hires. "Ford is a careerist company: You're either ascending or descending, and that's the most important thing to the talented people at Ford," says the source, who asked not to be identified. "The Ford people saw me as an interloper who had stolen a job from one of theirs."
At first, the executive was allowed some autonomy. But that was stifled eventually, and the person finally left the company.
The rise and fall of Jacques Nasser tells much about how Ford rejects outsiders.
Nasser himself was a Ford lifer, but an outsider as well - an Australian of Lebanese descent who rose through Ford's international operations. He recognized the company's insular habits, and as CEO he was determined to recruit more outsiders. But he himself eventually was rejected over the failure of his strategy to make Ford more reflective of the Internet economy and Ford's sudden financial fall. After he left in October 2001, most of his outsiders left, too.
Some give Nasser credit for trying to shake up Ford's culture. Ford's board had wanted to diversify the company's management team with more outside experience, one former insider says.
But Nasser gave plum jobs to outsiders, angering many lifers. Brash banker Don Winkler was hired to head Ford Credit. Chris Theodore was lured from Chrysler for a high-level role in product development. And Brian Kelley jumped from General Electric's appliance division to head of Lincoln Mercury barely two years after joining Ford.
Many of the new senior executives came from outside the auto industry, as Nasser sought Internet and technology experience. But his pursuit of dot-com success backfired.
Some Nasser hires lacked experience in their new disciplines. For example, a mere 10 months after leaving Fortune magazine for Ford, former journalist Sue Callaway became general manager of Jaguar Cars North America. Callaway and others bypassed Ford lifers who had toiled for years and knew the fundamentals of the business better.
"If you lived for 25 years in this system, and you thought you were going to be a VP, and they bring in an outsider as a VP, and they don't know your business, and you're teaching and training them, you can get a lot of cynicism," says a 30-year veteran who left Ford for another company. "And that cynicism existed."
After Nasser's ouster, Bill Ford and his new COO, Ford lifer Nick Scheele, crafted a back-to-basics turnaround strategy. Bill Ford has attempted to mend fences with dealers, suppliers and employees, and he has rehired and promoted many Ford veterans. Some high-profile outsiders remain, such as purchasing boss Tony Brown and design boss J Mays. (See box, above.) But most have departed, been forced out or shuttled aside under Bill Ford's new regime.
"The Ford culture is a very proud culture," says Joe Laymon, group vice president of corporate human resources and an outsider who joined Ford in 2000. "But I don't think the culture appreciates individuals coming in from the outside trying to alter it without an appreciation and inspection of how things are done right."
Winkler, Kelley and Callaway all have left Ford. Other high-profile outsiders who have left include Karen Francis, former head of Ford's now-defunct ConsumerConnect e-business unit; Wolfgang Reitzle, former head of the Premier Automotive Group; and Kathleen Ligocki, former vice president of Ford's customer service division.
Theodore remains but plays a lesser role than he did a year ago. Shamel Rushwin, another DaimlerChrysler AG executive who joined Ford in 1999, also plays a lesser role. After managing more than 60 stamping and assembly plants worldwide and then becoming vice president of North American business operations, Rushwin now is a company vice president and visiting university professor.
In contrast, the team assembled by Bill Ford includes veterans COO Nick Scheele, the once-retired Allan Gilmour as vice chairman and Jim Padilla as president of North America. Younger executives on the move include Don Leclair, who was promoted in July to succeed Gilmour as CFO, and Phil Martens, group vice president of product creation.
After key assignments in Europe and at Mazda, Martens, 43, is charged with remaking Ford's North American product development. He leaped over Theodore, the ex-Chrysler executive who used to head up Ford's North American product development. Theodore started at Ford but spent most of his career at other automakers before rejoining Ford in 1999. He now reports to Martens.
"Being a Ford lifer is a good thing with us," Laymon said. "We believe that since Ford is so big, and our company is so complex in terms of the various countries and regions of the world and the product mix that we can develop our own leaders."
Some former executives say it's not just outsiders who find the culture hostile.
"It's hostile, period," a former Ford executive said. "The weakening of the whole senior and middle management structure, which took place in the last 20 years, means a lot of people who thought they had promotion possibilities found that the door was slammed in their face. That position went away."
By rewarding lifers, Bill Ford is following a pattern established by Henry Ford II. During his reign, even events that seem like sharp digressions illustrate the company's dedication to home cooking:
n The former chairman made Ford Motor's most notable outside hire in 1968, when he named GM exec Bunkie Knudsen company president. But 19 months later, Henry Ford II fired him.
n Years earlier, in 1946, young Henry II hired GM executive Ernie Breech to help him turn around his grandfather's faltering company. But in 1960, Breech also got the ax.
Those stories illustrate a key reason Ford's culture has remained insular: the influence of the Ford family. At Ford, more than at other auto companies, descendants of the family founder have remained closely tied to operation. Leadership has cycled between family members and professional managers for years, and cultivating the Ford family is important for top-level executives.
"Our company is very unique," Ford Division President Steve Lyons says. "If you've not worked at Ford, I think it's very difficult to understand this relationship we have with the Ford family. As sort of the main way we run the business, you'd have to say that it's better to grow your own. And to come up through the organization still has a lot of merit."
If failing to understand the Ford family is one barrier, failure to know the fundamentals of auto manufacturing and retailing is another. Because the automotive business is so complex, some outsiders from other industries face a special challenge. Imports in staff positions such as human resources or legal counsel have the easier row to hoe. Core positions such as product development, marketing and dealer relations are a much bigger challenge to outsiders.
"It becomes very difficult," says David Cole, director of the Center for Automotive Research in Ann Arbor, Mich. "The guy may be the world's grand wizard at Hewlett-Packard or GE, but this is a very different kind of business."
Overcoming those built-in barriers to outsiders is tough enough. But as Bill Ford surrounds himself with a cabinet of trusted lifers, it becomes that much tougher for outsiders to assimilate at Ford.
(Photo)As CEO, Jacques Nasser recognized Ford Motor's insular habits and was determined to recruit more outsiders. Eventually, he was rejected.
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My next Ford.....