Nasser's aggressive drive to shake up Ford (F ) has the company sputtering. Here are some of the problems:
Ford now ranks last among the seven biggest carmakers in quality. Last year, recalls and delays cost it at least $1 billion, not counting the tire recalls. The redesigned Explorer, out since February, has already been recalled twice. Now, Ford is delaying new versions of its Expedition and Lincoln Navigator for extra testing.
Last August's recall of 6.5 million tires on the popular Explorer and Mercury Mountaineer SUVs cost Ford about $500 million. This year Ford will take a $2.1 billion aftertax charge to replace 13 million more Firestones. To cap it off, Explorer sales have plunged 21% this year through May.
With the huge hit from the Firestone tire recall, Ford has suspended $2.8 billion in stock buybacks. Company earnings are expected to sink by 65% this year, to $2.3 billion, while Ford's share of the U.S. market has fallen by 1.7 percentage points so far in 2001, to 23.1%. And last year, productivity sank by 7%, compared with an 8% gain for GM.
Ford has suffered a number of high-level departures, including the defection of Global Marketing V-P James C. Schroer, who bailed in February for a job at Chrysler. Meanwhile, middle managers have filed two class actions alleging that a new employee-review system that pushes underachievers out the door, is discriminatory.