Commentary: Ford: Jacques Nasser Can't Do It All

With the Firestone tire fiasco and other woes on Jacques A. Nasser's desk, the last thing the Ford Motor Co. (F ) CEO needed were doubts about his authority. Yet that's what he faced last week as rumors swirled that the board might revamp management and pull Ford's European chief back to Detroit for a key operating role. And although no one suggested Nasser might soon be out of a job, Nasser made a point of telling a Bloomberg reporter that Ford's directors, led by Chairman William C. Ford Jr., were "extremely supportive" of him. Still, that hardly means things are hunky-dory on the executive floor. It has become obvious lately that the aggressive and often controversial CEO has gotten himself into deep trouble, and he is going to need a hand or two to help pull Ford out of the muck.

SHAKEUP. Even before the Bridgestone/Firestone Inc. (BRDCY ) tire mess, Nasser had stretched himself too thin. Since taking over as CEO in January, 1999, he has pushed Ford in a host of ambitious new directions, piling on one initiative after another. He urged employees to get closer to customers. He overhauled management pay and performance practices. He hired a slew of outsiders to shake up Ford's culture. He adopted General Electric Co.'s (GE ) approach to improving quality. He expanded Ford's luxury-car portfolio through acquisitions. He bought repair shops and auto junkyards. He even set up John F. Welch's transformation of GE as a model for his company, and for himself as CEO.

In short, Nasser wanted Ford to be not only the world's top carmaker, but also among the top companies, period. But now he is learning the downside of aiming so high. The problem is, while Nasser has been leading Ford headlong into the future, he hasn't devoted enough time to the basics of running a $170 billion auto company. How else can you explain the embarrassing quality gaffes that have marred the launches of some of Ford's highest-profile vehicles, including the 2002 Explorer? Or the morale problems that have scarred the organization, and prompted class actions from disgruntled employees? "I think Ford management is really stretched," says one source close to Ford's senior management. "There are just too many initiatives going on. Now, they're paying the price for taking their eye off the ball."

No one is more overextended than Nasser himself. He has 16 executives reporting directly to him. General Motors Corp.'s CEO has nine. And Ford has not had a head of worldwide automotive operations since Nasser held the job under his predecessor, Alexander J. Trotman, back in 1998. The hard-charging Aussie has also kept the auto job for himself; he has also never named a chief operating officer. But given Ford's troubles, the smart money is betting he'll turn to Nick Scheele, chairman of Ford of Europe, for help with the auto operations. Scheele is credited with turning around Jaguar in the 1990s and is now leading a turnaround of Ford's entire European operations.

Bringing in Scheele would also go a long way to fixing what many observers insist is Nasser's Bill Ford problem. Ford insiders say the chairman is miffed that Nasser has cut off his flow of information from senior execs. Both Nasser and Bill Ford have denied reports of a rift. But Ford, 44 has been known to flex his muscles in the past when corner-office guys messed up. And while insiders say Bill Ford prefers to remain a nonexecutive chairman, he could easily hand the keys to someone else. If Nasser wants to retain the support of Ford and the board, he had better focus on making Ford a top-flight carmaker once again. But no one says he has to do it all alone.

By Joann Muller

    Before it's here, it's on the Bloomberg Terminal.