business

Ford Cites ‘Inappropriate Behavior’ in Senior Executive’s Ouster

Updated on
  • North American chief leaves after anonymous internal complaint
  • Departure creates second major management void for CEO to fill
Bloomberg’s Keith Naughton reports on Ford’s decision to oust the head of its North American operations.

Ford Motor Co. ousted the head of its most important business unit because of unspecified “inappropriate behavior,” the latest in a litany of setbacks to hit the U.S. automaker.

An internal probe found that Raj Nair, president of Ford’s North America operations, engaged in behavior “inconsistent with the company’s code of conduct,” according to a statement. Ford began the investigation after a recent anonymous complaint from within the company.

While Ford declined to detail what led to Nair’s immediate exit, he’s departing as misconduct befalls prominent men from Washington to Hollywood. Although high-profile firings clearly linked to the #MeToo movement have yet to materialize within the auto industry, Ford’s chief executive officer did apologize late last year for harassment on the carmaker’s factory floors.

“It’s a very male-dominated industry and most companies are paying special attention to these kinds of issues and taking action,” Michelle Krebs, an analyst at car-shopping website Autotrader, said by phone. “More chaos at the company comes at a terrible time because Ford has had so much upheaval.”

Ford stock traded in Europe was down 0.1 percent at $10.59 as of 1:02 p.m. Thursday in Frankfurt following a 0.3 percent slide Wednesday in New York.

Company Lifer

Nair, 53, was a Ford lifer who had been with the company for more than 30 years. He was head of global product development and served as chief technical officer before a series of management changes that followed Jim Hackett becoming CEO last year.

“We made this decision after a thorough review and careful consideration,” Hackett said in the statement. “Ford is deeply committed to providing and nurturing a safe and respectful culture and we expect our leaders to fully uphold those values.”

Brad Carroll, a Ford spokesman, declined to comment beyond the statement, which said the company plans to name Nair’s replacement soon.

‘Gut Wrenching’

Hackett, 62, wrote an open letter to employees in December after the New York Times published a story about the history of harassment at two Ford plants in Chicago that the newspaper said drew from interviews with more than 100 current and former employees.

In August, the company agreed to pay as much as $10.1 million to settle sexual and racial harassment complaints following an investigation by the Equal Employment Opportunity Commission. The case involved the same Chicago factories where Ford faced lawsuits and a probe by the federal agency that led to a $17.5 million settlement in 1999.

“Candidly, it was gut wrenching to read the accounts of these women,” Hackett wrote in December. He apologized to workers and warned that there was “absolutely no room for harassment” at Ford.

“We don’t want you here, and we will move you out for engaging in any behavior like this,” he said.

Sincere Regret

Hackett has struggled to revive Ford’s fortunes since taking over as CEO from Mark Fields last year. He’ll now have to fill another important void in the management ranks after losing his head of China operations in January. Jason Luo, who had been with the company less than five months, resigned for personal reasons that predated his time with the carmaker.

Ford’s North American automotive operations earned $7.5 billion of pretax profit in 2017. While that was down from a year earlier, the next most lucrative market for the company -- the Asia Pacific region -- brought in just $561 million.

“I sincerely regret that there have been instances where I have not exhibited leadership behaviors consistent with the principles that the company and I have always espoused,” Nair said in the statement. “I continue to have the utmost faith in the people of Ford Motor Company and wish them continued success in the future.”

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