Dealers: Nasser Is To Blame: Detroit News

Here is an article that appears in the Detroit news that reports that " A Memo blames his leadership for Ford quality woes, suggests change needed

DEARBORN -- In a highly critical confidential report, Ford Motor Co.'s top dealer body said many retailers feel that Chief Executive Jacques A. Nasser has created an atmosphere of distrust and believe a change at the top may be necessary to repair relations with them. At Ford's request, Ralph Seekins, incoming chairman of the Ford National Dealer Council, penned the blunt 14-page memo to assess the state of the company's relations with its dealers -- among the industry's worst in recent years -- as well as offer a list of potential solutions.

Seekins, who informally surveyed 200 dealers, said they are dissatisfied with Ford's vehicle quality, concerned about poor communication with top management and unhappy with a number of the automaker's policies and business initiatives. " Regardless of how it appears, it's not meant to be critical but constructive ," Seekins said in an interview Tuesday.

"It's a starting point for re-establishing a trust relationship. It wasn't intended to place blame." In fact, the report notes that most dealers still believe that "even with all their problems" Ford is the best franchise. Even so, the memo sharply criticized Nasser's leadership of Ford at a time when the company is facing a major restructuring to address its growing financial and related problems.

"Dealers believe the decay has come from the top -- specifically from Mr. Nasser," the memo says. "Where once Ford dealers felt there was a dialogue with the CEO, now they feel Mr. Nasser is 'distant,' 'aloof' and 'arrogant,' " the memo says. Dealers further believe Nasser has taken the focus off core Ford, Lincoln and Mercury products and diverted his energies to the automaker's higher-end brands such as Jaguar, Volvo and Land Rover.

"With these (and other) things in mind, most dealers believe a change at the top is necessary to get things back on track," the memo said. The opinions of dealers, independent entrepreneurs who risk their own money, is watched closely by automakers. While relations between dealers and manufacturers are often strained, they have a mutual interest for their brands to succeed.

Nasser and other Ford executives met with dealers last week in Orlando, Fla., to discuss many of the issues brought forth in the memo. Seekins said the meeting was positive and many dealers left feeling better about Ford and Nasser. Ford spokesman Susan Krusel said the automaker is working hard to address the dealers' concerns and plans to meet with dealers regularly.

"This analysis is being used as a starting point to develop an action plan to improve company/dealer relations," Krusel said. " Improving dealer relations is a top concern at Ford.

" The critique from dealers comes as Ford directors are scheduled to meet Thursday to review the restructuring of the company's North American operations. The board could approve additional moves, including a reduction in Ford's quarterly 3-cent dividend.

Nasser's future, in particular, has been the subject of widespread speculation since this summer when Chairman William Clay Ford Jr. began sharing day-to-day control of the company with Nasser. Ford has since expressed confidence in Nasser's leadership.

Garland, Texas, dealer Jerry Reynolds, the departing chairman of the Ford dealer council, said he agreed with much of the substance of the report but questioned its tone. "I thought he was right on about a lot of things," Reynolds said. "There were some things I would have said differently. He probably would have said some things differently had he known it would be public. I hope it was taken in the right vein by Mr. Nasser and everybody else out there.

" Seekins, owner of Seekins Ford-Lincoln-Mercury in Fairbanks, Alaska, said the memo was not intended to be viewed outside the company. "If we candy-coat the message, what good would it do?" he said. The No. 1 concern among dealers was Ford's lagging vehicle quality. Seekins wrote that dealers believe Ford has to cut costs at the expense of quality and has abandoned its drive of designing and building cars and trucks considered the best in their segment.

"As evidence, (dealers) point out that nationwide, year over year, for the past two years, warranty repairs performed at dealerships have increased by 50 percent and recalls have increased exponentially," the memo said. Ford executives acknowledge the company's quality has slipped and have promised improvements. Nasser personally met with dealers this summer pledging to improve quality and address other concerns. Still, "dealers just don't yet believe there is any real commitment to world-class quality," the memo said.

Seekins suggested that Ford include dealers in future quality summits and publicly restate its commitment to improve quality and execute new product launches on time and without defects. Dealers are also concerned with a number of Ford ventures that are perceived as attempts to compete against its retailers. While Ford earlier this year abandoned a fledgling program to own and operate dealerships in small markets, dealers still feel threatened by the company's forays into the automotive parts and services sector, the report stated.

"When dealers hear ... Ford is moving into new adjacent business ventures, they believe this is code predicting they will wake up some morning ... to find that their sole supplier is now their very much better capitalized competitor," the memo said. Distrust continues to surround Ford's Blue Oval Certified program, which rewards dealers financially for achieving high customer satisfaction scores.

While Ford has significantly altered Blue Oval Certified to make it more palatable, dealers "seem to intrinsically distrust" the program, the memo said. "To many, Blue Oval isn't really about customer satisfaction -- it's about who controls my dealership," Seekins wrote. The wide-ranging memo questioned Ford's decision to hire executives from outside the automotive industry for key posts and the company's recently abandoned system of grading managers and excluding the bottom 10 percent of performers from receiving pay raises and bonuses. "Dealers asked, 'If they'll do that to their own employees, what'll they do to us?' " the memo said. Finally, Seekins said communication between dealers and top Ford executives must improve. The memo said that a lack of contact between dealers and top management has bred distrust. "It's difficult to trust who we don't know," Seekins wrote.