A Ford in Ford's Uncertain Future: Henry Ford's Great-Grandson Is the New CEO at the World's Second-Largest Carmaker. but His Tenure May Be Short If He Doesn't Right the Company's Sinking Fortunes. (NATION: Ford Motor Co.)

By Whalen, Christopher | Insight on the News, December 17, 2001 | Go to article overview

A Ford in Ford's Uncertain Future: Henry Ford's Great-Grandson Is the New CEO at the World's Second-Largest Carmaker. but His Tenure May Be Short If He Doesn't Right the Company's Sinking Fortunes. (NATION: Ford Motor Co.)


Whalen, Christopher, Insight on the News


For the last several years the Ford Motor Co. has been on a roll, delivering increasing sales and earnings for investors that were the envy of the auto industry. In March 2001, Ford Motor nearly overtook General Motors as the world's largest automaker based on sales and market capitalization. But it has been all downhill ever since. Falling profits and, more importantly, a sharp erosion in Ford Motor's cash position, have caused several management changes at corporate headquarters in Dearborn, Mich. And even as the tire problems related to the Ford Explorer sport utility vehicle seemingly subsided, litigation brought by hundreds of current and former owners of Ford Motor's most popular and profitable product even now hang like a thunderhead over the company.

On Oct. 30, Ford Motor announced that Chief Executive Officer (CEO) Jacques "Jac" Nasser, the testy Lebanese-American manager who once compared himself to legendary former General Electric chairman Jack Welch, would retire effective immediately. Ford Motor's public-relations apparatus, one of the best among Fortune 500 companies, is selling the idea that Nasser's departure came about because of a number of other factors, but insiders tell INSIGHT that the cost and embarrassment related to the Explorer debacle was the final straw. Ford Motor's latest quarterly report with the Securities and Exchange Commission (SEC) confirms Nasser will keep lucrative cash and stock benefits -- in effect a golden parachute -- in return for agreeing not to go to work for another carmaker.

As INSIGHT reported in August (see "Explorer May Lead Ford to Ruin" Aug. 20), Chairman William Clay "Bill" Ford Jr. assumes the title of CEO after serving as nonexecutive chairman since 1999. An untested operator, the 44-year-old Ford will be supported by two veteran managers: Nick Scheele, 54, the new chief operating officer (COO) and president of Ford Motor automotive operations, and James Padilla, group vice president for manufacturing and quality, who will take Scheele's current job as head of Ford Motor's North American operations.

Upon taking over as the new CEO, Ford immediately undercut his position, explaining that he will focus on external ambassadorial and nonexecutive tasks. As one banker noted, having a controlling shareholder with little operating experience take the wheel is not the kind of arrangement needed at troubled Ford Motor, the second-largest automaker and one of the world's largest industrial operations.

Another remarkable aspect of the ascension of Ford to the CEO position was the olive branch he offered to the Bridgestone/Firestone unit of Japan's Bridgestone Corp. after tossing Nasser to the wolves. In several press statements, Ford said he wants to have "a constructive relationship with Bridgestone," but alluded to legal issues that remain. Both companies currently are entangled in hundreds of lawsuits regarding the Explorer, including a class-action litigation in federal court in Indianapolis that potentially could be fatal to the company.

During a Nov. 16 hearing in Indianapolis, Tab Turner, lead counsel for the plaintiffs, outlined the defects in the Explorer and the Firestone Wilderness AT tire that he alleges caused hundreds of fatalities. When asked by Judge Sara Evans Barker if the Explorer is defective, Turner replied that less than 5 percent of all Explorer rollover cases involved Firestone tires. "If you put a good tire on the Explorer, it will still roll over because of inherent stability problems," Turner told the court. Sources close to the case say that if the trial proceeds and Judge Barker finds that the Explorer is defective, regardless of what tires are on the vehicle, Ford could be held liable for billions in damages to current and previous owners of some 3.5 million Explorers.

Yet legal issues, threatening as they may be, are not Bill Ford's immediate concern. The basic issue raised by his elevation to CEO is the dubious but dominant role of the Ford family, which controls only 6 percent of the company's equity but 40 percent of the vote. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

A Ford in Ford's Uncertain Future: Henry Ford's Great-Grandson Is the New CEO at the World's Second-Largest Carmaker. but His Tenure May Be Short If He Doesn't Right the Company's Sinking Fortunes. (NATION: Ford Motor Co.)
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.