Fiery Detroiter fights to restore Ford's luster
Clarence Tabb Jr. / The Detroit News
Jim Padilla, Ford Motor Co.'s chief operating officer, has succeeded in his 38-year path from the plant floor to his current post through his determination to meet high standards of quality.
John T. Greilick / The Detroit News
Jim Padilla talks with trim team leader Jim Mann, center, and plant manager Rob Webber while touring the Dearborn Truck Plant.
John T. Greilick / The Detroit News
Jim Padilla tours the trim line at the Dearborn Truck Plant with plant manager Rob Webber. Padilla has earned respect on the shop floor as well as in the boardroom.
After climbing from the factory floor to the executive suite, Padilla demands commitment and quality from staff.
By Eric Mayne / The Detroit News
DEARBORN - Sunrise is minutes old, but Jim Padilla has been at Ford Motor Co.'s product development center for nearly an hour.
In a quiet studio, he eyes a quartet of vehicle prototypes, zeroing in on a 2006 Lincoln Zephyr. Stern-faced, Padilla runs his beefy hands over the sedan's steering wheel and instrument panel, searching for flaws. The interior materials, he says, must be supple, and the shift lever, firm.
Ford's product development team is hoping to get final approval to produce the new vehicles. And that means getting by the blunt-spoken, demanding Padilla - never an easy task.
Jim Padilla doesn't believe in easy. He grew up in East Detroit, one of 11 children from a hard-working Mexican-Irish family. At 19, he took a job in a Ford factory while attending the University of Detroit. Thirty-eight years and 30-plus jobs later, Padilla was named Ford's chief operating officer in April, putting him in line to succeed Nick Scheele, 61, as Ford's president.
Now Padilla, 58, is on a mission to infuse Ford with the passion and precision that fueled his unlikely success story. And the company had better be ready.
"Jim's all about two things - results and teamwork," Ford Chairman and CEO Bill Ford Jr. said. "I saw in him steadiness, resolve and character."
That's steep praise for a man in a job that requires high standards - every day - because small miscues can have multibillion-dollar consequences and ignite public relations wildfires.
Ford is fighting stiff competition from General Motors Corp., Toyota Motor Corp., and others while burdened by high labor and health care costs. Padilla attacks the challenges with an intensity that is rare even in the hypercompetitive auto industry.
"I don't pull a lot of punches," Padilla said. "I tell people what I think. I tell them what I expect. I challenge them. And my priorities are clear: quality, quality, quality."
It is, he believes, the key to making Ford great again. In meeting after meeting with employees, Padilla preaches constant improvement, the mantra of Toyota and other Japanese companies who have been stealing Ford's customers in recent years.
Give him a microphone and Padilla sheds his jacket and prowls the stage, alternately shouting and whispering. His face reddening, fist clinched, Padilla recites from the ever-present blue laminated note card that he requires executives to carry at all times.
Known unofficially as "Padilla's pyramid," it lists three guiding principles for building a stronger Ford. Boosting quality is first - and second. But the base of the pyramid urges employees to build relationships - with suppliers, the United Auto Workers union and each other.
"People are the business," Padilla said. "Unless you are able to communicate and then build strong teams, you cannot be effective as a leader."
Padilla is the archetype of the automaker's retooled leadership team - a no-nonsense executive who concentrates on nailing the details rather than hatching grandiose, outside-the-box plans.
"If we're going to be as competitive as I want us to be, then we need to improve our processes, take advantage of our scale and encourage continued industry-leading innovations," Bill Ford said. "Jim's job is to drive those issues."
At the executive level, the rule is simple: Don't disappoint Padilla. He's impatient with incompetence and prone to occasional eruptions. Steve Lyons, president of the Ford division, recalls when he and Padilla shared an office as young engineers. Someone attempted to repair an electrical panel, but succeeded only in making the lights flicker nonstop. Padilla's reaction was thunderous.
"He was pounding on the walls," Lyons said, laughing as he recounted the story. "And he was yelling, 'Keep your hands out of there if you don't know what you're doing!'"
Demanding? Yes. Gruff? Sure. But Padilla insists he's not a bully.
"This is not the old days. We don't have at Ford, any longer, executives who come in and tear up a (vehicle) program," he said. "If we had those guys, we'd put them in a closet and never let 'em out."
His persistence is paying off. Since 2001, when he spearheaded the automaker's post-Firestone revitalization plan that zeroed in on the basics of engineering and building cars, Ford's warranty costs have fallen by nearly 33 percent. Its performance in the J.D. Power and Associates Initial Quality Study has risen 22 percent.
The bottom line: Ford is poised to make more than $3 billion this year, an impressive swing from the $6.4 billion in losses during 2000 and 2001 that led a few analysts to raise the possibility of bankruptcy.
But to understand Padilla, look beyond his bare-knuckled, tough-guy persona, and consider his devotion to employees and his family, his Mexican heritage and to numerous community organizations.
"He is so kind and caring about all people," said Eleanor Josaitis, CEO of Focus:Hope, a Detroit organization that provides food and other emergency assistance, as well as job placement and training, and where Padilla serves as a board member. "He has a very big heart."
Padilla carries on his family's tradition as a volunteer for numerous organizations such as the United States Hispanic Chamber of Commerce and The National Council of La Raza.
"He's an incredible leader in the Hispanic community," said Irma Elder, a prominent Mexican American herself as owner of Jaguar of Troy, the world's largest Jaguar dealership. "He never hesitates if they need him to be in charge of an event."
When high school students from Detroit's Mexicantown area visited Ford's world headquarters in Dearborn recently, Padilla welcomed them personally. "They've got to realize that I'm a Detroit guy," he said. "And if they work hard, if they get an education, they can have their dream job someday, too."
But Padilla's connection to the Hispanic community goes only so far. He doesn't speak Spanish and uses the Anglo pronunciation of his last name - Pa-DILL-a - unless the audience is largely Hispanic. Then it's Pa-DEE-ya.
Challenges have abounded
Padilla's ascension at Ford was hardly smooth. More than once he was rumored to be the next executive on the chopping block. He considers his two-year tenure in South America to be the lowest point in his career. In 1997, Brazil's government doubled interest rates to 40 percent in a bid to ward off the effects of Asia's economic crisis and to stop a run on Brazil's currency.
The moves crippled the country's consumer loan business, and auto sales tanked. Padilla was forced to make a tough and widely unpopular call: shut down production and lay off workers.
The cutbacks at Ford and other companies pushed Brazil's unemployment rate up to 10 percent.
Padilla also survived the stormy end to Jacques Nasser's tenure as CEO in 2001. With Ford's reputation wilting under public scrutiny brought on by the Firestone tire recalls of 2000 and 2001, the company's inner circle quietly questioned the abilities of Padilla, who was then head of global manufacturing. In 2001, when Padilla also shared responsibility for quality, Ford recorded the most recalls in its history.
So when he was promoted to group vice president in charge of Ford's foundering North American operations the same year, he had a lot to prove.
"You know what? Jim grew tremendously in that role," said Kathleen Ligocki, CEO of Tower Automotive and a former Ford vice president who worked with Padilla. "And he did that by talking to everybody and listening. Jim was an example of an already successful business leader who really worked hard on personal leadership."
Pegged by some as a just a factory guy, Padilla had cultivated a broad knowledge of the industry.
"I spent a lot of time getting ready," he said. "Taking jobs in manufacturing, engineering and the like. Jobs have found me for the last 20 years. I didn't ask for this job, but I'm happy to be in this job."
Analysts say it will be several years before Padilla's real impact can be assessed.
"He has been tossed into a tough situation - Ford's product deficit is significant," said Lindsay Brooke, a senior analyst with CSM Worldwide, a Farmington Hills automotive consulting and forecasting firm. "The F-150 launch went off without a hitch, but the new Five Hundred, Freestyle and Mustang are having some early teething problems in the factory. And there is still no public plan to revive Lincoln."
Jaguar is a question mark
During his four-year stint with Jaguar, Padilla showed he had the executive mettle to overcome adversity. Ford acquired Jaguar in 1989, but within three years, the brand was falling apart and quality still lagged.
Ford assigned Scheele to oversee the turnaround as Jaguar's chairman and CEO.
"They told me I could bring one person along, and I said, 'I want Jim Padilla,'." recalled Scheele, Padilla's predecessor as COO. "I remember a meeting with Jaguar dealers when he told then, 'We will fix your problems.' And he did."
When Padilla was named Jaguar's director of engineering and manufacturing in 1992, the brand's product lineup was dogged by 196 problems per 100 vehicles, according to J.D. Power's quality scorecard. By the time Padilla left England four years later to become president of Ford South America, Jaguar's quality rating was at 90 problems per 100 vehicles - 10 percent below the industry average.
"We spent the time to teach, to coach, to kick, to cajole - whatever it took," Padilla said.
But now some people question the extent of his success at Jaguar, a brand that continues to lose money and struggles to connect with buyers.
A life defined by strength
Today, Padilla finds himself leading a new wave of future executives - a phalanx of forty- and fifty-somethings who are being groomed for higher positions. Padilla's job is not only to put Ford back on track to financial stability and product success, but to instill his brand of determination in the next generation.
Padilla's iron will to succeed was evident at an early age to his father, David, who worked in a factory that made building supplies. Jim Padilla wanted to attend Austin Prep, a private Catholic high school. So he worked odd jobs until he earned enough money to pay his own tuition.
"You had to take a pre-entrance test," David Padilla said. "And that classified the entrants in Class 1, 2 or 3 - the very bright, the semi-bright and the kind of dull. When Jim took the test, he got into the lowest class."
But mere admittance to the prestigious school didn't satisfy him.
"Within three months, he worked his way up to the No. 1 class," his father said. "He was not going to be in the lowest class."
Padilla honed his competitive instinct playing baseball, football and roughhousing with his eight brothers. "In my house, the first one up was the best-dressed," he said.
And whether it was delivering newspapers, toiling in factories or selling suits in a department store, work was a constant in his life. "I always had jobs," he said. "You had to. You had to buy your own shoes. You had to pay your own tuition."
While attending the University of Detroit, he and his brothers ran a shuttle service for fellow students. Padilla remembers driving a huge Pontiac about that time.
"I used to drive into the Stroh's Brewery, and we could stack three half-barrels in the trunk - and still close the trunk," he said with a laugh. "I could always get the beer to the party."
One evening, friends introduced him to a girl named Alice. And from that moment, they were inseparable. "My wife and I dated all through college," he said. "We had a great time and a great relationship. She's a great lady."
They were married in 1968. The next year, Padilla graduated with bachelor's and master's degrees in chemical engineering. The following year, he earned a master's in economics.
Padilla had job offers from several companies. But he chose the blue oval.
"Ford had been good to me," he said. "And frankly, at that time, I wasn't ready to leave Detroit."
The couple was expecting their first child. And Detroit has always had a hold on Padilla.
"It has so many different micro-cultures," he said.
Dearest to Padilla is his Mexican heritage. His grandfather, Reyes Padilla, "swam the dry river" as an illegal immigrant to the United States, Jim Padilla said. Soon after, Reyes met and married Irish immigrant Nora O'Sullivan and settled in Detroit.
Jim and Alice Padilla have two sons and a daughter, ranging in age from 29 to 45. Despite his schedule, Padilla rarely missed an important event when they were growing up.
"He may have had to go back to work, but he was always there - always," Alice Padilla said. "My daughter said it best: 'Mom, you drove us, but Dad was always there at the finish line.'"
He no longer stacks beer kegs in the trunk, having become a collector of fine wines. And he's long since abandoned the baseball diamond for the swimming pool, where he takes water aerobics classes three times a week.
But despite his more refined pursuits, he seems most at home on the shop floor of the Ford plants he visits regularly. Najaa Haimour, 52, works at Ford's assembly plant in Wayne, where Padilla supervised production of the compact Ford Escort. He remembers meeting Padilla in 1990.
"He would ask us questions, not to trick us and see if we know the answers, but because he wanted to know how we did things," Haimour said. "Even to this day, I talk to some of the salaried people, and they fear him. I think he was fun."
Clarence Tabb Jr. / The Detroit News
Jim Padilla, chief operating officer of Ford Motor Co., takes a ride in a Ford - the redesigned 2005 Mustang in this case, which is produced at the Auto Alliance International Plant and whose successful launch rests on his shoulders.
Title: Chief operating officer, Ford Motor Co.
Education: Bachelor's and master's degrees in chemical engineering and master's degree in economics, all from University of Detroit.
Career: Joined Ford in 1966 as a quality control engineer. Held management posts in product engineering and manufacturing starting in 1976. Served as director of engineering and manufacturing for Jaguar, director of performance luxury vehicles, and president of Ford's South American operations. Later named group vice president for global manufacturing and quality. and president of North and South America operations.
Personal: Born in Detroit; lives in Northville, married with three adult children; collects wine, enjoys reading mysteries and history.
Quote: "I never ran for sheriff. Never went looking for a job. Jobs always found me."