DETROIT (June 11, 2001) — A year ago, he was a hero.
Jacques Nasser, the high-energy CEO of Ford Motor Co., had created the image of a company on the rise.
Not any more. Ford is hobbled as the Firestone tire fiasco tarnishes Jac Nasser's reign. Last week, he defended his record and declared—once again—that he is on good terms with Chairman William Clay Ford Jr.
The 10-month tire crisis has eroded the notion that Ford is the auto maker of the future in Detroit.
Mr. Nasser himself acknowledged the Firestone burden. “We were distracted by Firestone,” he told stock analysts on May 23. “There is no question the recall of 6.5 million bad tires had a tremendous impact on everybody.”
Before the Firestone crisis broke last August, Mr. Nasser talked boldly of galvanizing Ford's global work force to think single-mindedly of the customer. He ventured into cyberspace, pushing e-commerce initiatives at Ford. Mr. Nasser earned great press by pocketing Volvo Cars and Land Rover.
In October 1999, Mr. Nasser was pictured on the cover of Business Week. Inside, a headline said: “Remaking Ford. In his quest to make Ford a more consumer-oriented powerhouse, Nasser is off to a fast start.”
Even the headlines that Mr. Nasser's administration was weeding out older workers gave him an aura of toughness.
Mudslinging with Firestone
Today, the climate at Ford is vastly different. Mr. Nasser is struggling to protect the Explorer, the company's profit maker linked daily in press reports with fatal rollovers. The Ford executive is engaged in a mudslinging contest with John Lampe, chairman of Bridgestone/Firestone Inc. The spectacle of defending the Explorer before Congress looms next week.
Mr. Nasser is on the defensive. He has to regroup his forces, reeling from back-to-back crises.
Ford vehicles fell in the most recent J.D. Power and Associates quality ratings, ranking seventh behind General Motors Corp., DaimlerChrysler A.G. and four other auto makers.
“I am hoping to see some quality improvement this year, but it isn't going to be an instant turnaround,” Mr. Nasser told the analysts.
The Firestone crisis was compounded by a critical miscalculation at Ford before it decided last month to recall 13 million tires at a cost of $2.1 billion. Ford vastly underestimated Bridgestone/Firestone's Mr. Lampe.
In the August recall of 6.5 million Firestone tires, Ford outplayed Bridgestone's Japanese management in the court of public perception, successfully protecting the Explorer.
Today, Ford faces Mr. Lampe, a newly promoted corporate gunslinger who is firing back. He refused to join Ford in the current recall of 13 million tires, placing the blame on the Explorer. He fired Ford, declining to enter into new original equipment contracts with the car manufacturer in North and South America. Defying Firestone's 96-year history with Ford, Mr. Lampe asked the Department of Transportation to investigate some Explorer models for a handling defect.
Faced with the attack and lackluster sales, Ford has been forced to overhaul advertising for the 2002 Ford Explorer just weeks into a campaign created to promote the vehicle's first redesign in 10 years. Year to date through May, Explorer sales were off 21 percent, partly due to slow production during the model changeover.
On the move
Last week, Mr. Nasser continued on the defensive, denying media reports that Ford management will be reorganized to reduce the number of executives reporting to him.
He told a Sanford Bernstein & Co. investment conference in New York that he enjoys a “great partnership” with Bill Ford.
He whistle-stopped in four U.S. cities with five Ford vice presidents, meeting car dealers and promising them a greater voice in company decisions.
The week of June 18, he will return to Washington, where Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, plans another round of public hearings on tire and vehicle safety. The National Highway Traffic Safety Administration (NHTSA) expects its tire investigation to last until August.
The recall's cost will dog Mr. Nasser. In the second quarter, Ford will take a $2.1 billion charge against earnings to pay for the recall. Mr. Nasser already has said Ford cannot hope to meet its goal of reducing costs by $1 billion this year.
With the Firestone crisis costing Ford money, management time and bad press, now Mr. Nasser has to convince Wall Street and stockholders that he can regain Ford's lost momentum.