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March 5, 2003
BY BILL KOENIG
BLOOMBERG NEWS

DEARBORN, Mich. -- Ford Motor Co., the world's second-biggest carmaker, is increasing its efforts to find a new finance chief who will lead efforts to fund a growing pension deficit, repay debt and cover the cost of sales incentives.

The company hired Heidrick & Struggles International Inc. to help with the search, people familiar with the matter said. Ford is targeting Fortune 500 company executives and talked with John Joyce, who opted to remain chief financial officer of International Business Machines Corp., the people said.

Ford needs a replacement for Allan Gilmour, 68, who was brought out of retirement last year to lead the finance department as the company approached a second consecutive full-year loss. Gilmour, who as deputy chairman helped Ford recover from a record loss in 1992, agreed to a temporary return after William Clay Ford Jr. took over as chief executive to shore up the family business and restore investor confidence.

"If they can bring in someone with instant credibility, that can effect positive change, and change the impression of turmoil in the executive suite," said Andrew Palmer, who helps manage $1.6 billon of fixed-income assets, including Ford bonds, at ASB Capital management Inc. in Washington, D.C. "That could go a long way" to reassure investors.

Ford has the most debt of any carmaker, with about $124.6 billion in notes and bonds and more than $20 billion to repay in each of the coming two years, according to Bloomberg data. That compares with about $107.3 billion in outstanding bonds and notes at General Motors Corp., the world's biggest carmaker.

"We'll continue until we get the right individual, whether that's one month or two months or six months or whatever," Chief Operating Officer Nicholas Scheele said in an interview from the Geneva Motor Show with Bloomberg Television. Whoever is selected "has to fit in with" Ford's executive team, Scheele said.

Ron Iori, a spokesman for Ford, wouldn't comment on the search for a new finance chief. IBM spokesman Bill Hughes also declined to comment as did Heidrick & Struggles spokesman Eric Sodorff.

Ford went from a $7.24 billion profit in 1999 to a $5.45 billion loss in 2001. The loss narrowed to $980 million last year under the leadership of Bill Ford and Gilmour.

The company's credibility gap is reflected in the difference between Ford's forecast for 2003 net income of 70 cents a share in 2003 and analyst estimates of 51 cents a share, revised down on Feb. 28 from 53 cents, according to a survey by Thomson First Call.
 
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