Nasser ousted as CEO of Ford Motor; Chairman William Clay Ford II takes over
Tuesday, October 30th 2001, 12:00 am
By: News On 6
DEARBORN, Mich. (AP) _ Jacques Nasser has been ousted as CEO of the slumping Ford Motor Co., replaced by the great-grandson of founder Henry Ford, the company told employees Tuesday.
The move puts a Ford family member in charge of the automaker's day-to-day management for the first time since 1979, when Henry Ford II resigned.
``We've been given an amazing legacy, and we're going to build an even better one,'' said chairman William Clay Ford Jr., who replaces Nasser as chief executive officer.
The management shake-up included the elevation of North American group vice president Nick Scheele, known as ``Mr. Fixit,'' to chief operating officer.
Scheele will be succeeded by Jim Padilla, group vice president for manufacturing and quality. Also, vice president of communications Jason Vines will be dismissed.
``We've been given an amazing legacy, and we're going to build an even better one,'' said Ford Jr., who was speaking at an auditorium at company headquarters. ``The sole reason for these changes is to ensure the ongoing success of the Ford Motor Co.''
Nasser's fate had been the subject of much speculation in recent months as Ford was plagued by eroding sales, questions about vehicle quality and the Firestone tire crisis.
Nasser, 53, earned the moniker ``Jac the Knife'' for his prodigious cost-cutting. When he took over in January 1999, Ford was poised to overtake General Motors Corp. as the world's top automaker.
But 18 months later, Ford's momentum was shaken by the news that people were dying in accidents when the treads separated from Firestone tires, most of which were installed as original equipment on Ford Explorer sport utility vehicles.
In some cases, the vehicles rolled over after the tread separations.
Just last week, a judge approved a settlement of a lawsuit over allegedly faulty ignition systems for vehicles dating from 1983 to 1995. The plaintiffs said the settlement could cost Ford as much as $2.7 billion for repairs.
Ford's market share slipped during the first nine months of 2001 to 22.6 percent from 22.8 percent a year ago.
Through September, sales of Ford vehicles were down 11 percent from the first nine months of 2000, a record sales year for the industry. By the third quarter of 2001, Ford's losses dipped to $692 million, a reversal from the same quarter a year earlier, when it earned $888 million.
Looking for ways to save money, Ford announced in August it would cut 4,000 to 5,000 salaried positions by the end of 2001. Not wanting to appear hardhearted during a slowing economy, Ford said the separations were voluntary.
Employees targeted for the chopping block were offered buyouts or early retirement packages. The company hoped enough would take them for it to make its reduction targets.
Chief financial officer Martin Inglis promised more restructuring moves.
The first real sign that Nasser's job was on the line came in July, when Scheele was brought in to take over Ford's North American operations. Two weeks later, the automaker announced the creation of the Office of the Chairman and CEO, which required Nasser to report more regularly to Ford Jr.
Ford's father, William Clay Ford Sr., is brother of Henry Ford II, who served as chairman and CEO from 1945 to 1979, and grandson of company founder Henry Ford, who ran the company from 1908 to 1918.
Henry Ford's only son, Edsel Ford, ran the company from 1918 to 1943. His name graced an ill-fated late 1950s model, one of the biggest flops in automobile history.