Ford needs a better idea than just a product czar

April 9, 2002 Southfield, Mich.: BLOOMBERG NEWS has reported that Detroit automakers copy one another's rebates, headlights, even their cup holders.

It looked recently as if Ford Motor Co. was about to steal an idea from General Motors Corp. -- product czar.

General Motors last August hired Bob Lutz, a well-traveled industry veteran who made his mark elsewhere, to streamline and refine new-model development at the world's biggest automaker.

Ford has more compelling reasons than mere imitation to follow suit. The No. 2 automaker needs a leader who will cut through bureaucracy and spur production of snazzy new models that will beef up its flagging lineup. Its U.S. market share dropped to 21 percent from 22.9 percent last quarter, or about 350,000 fewer vehicles.

Bucking for the Lutz-style job is Wolfgang Reitzle, a senior Ford executive in charge of the automaker's luxury brands -- Jaguar, Volvo, Land Rover, Lincoln -- who has spent most of his career at Germany's BMW.

Another candidate for a bigger job at Ford headquarters in Dearborn, Michigan, is David Thursfield, chief executive of Ford's European operations and a contender to head its non-European overseas operations as well as worldwide purchasing -- the unit hard hit last year by a $1 billion loss due to clumsy procurement and trading of palladium.

Reitzle's role

Overall, Ford lost $5.5 billion in 2001. Its management is in turmoil, as executives jockey for power following Jacques Nasser's dismissal as chief executive by Bill Ford Jr., who then became CEO at the family firm. As Bill Ford tries to forge a new cadre of leaders, the company is in danger of paralysis caused by career politics.

Those who win command will decide the models Ford builds, how much it invests, and which markets it targets. The payoff comes when new models are introduced in two to three years. Ford lags the field due to postponement, inattention and quality lapses under Nasser, its CEO from January 1999 to October 2001.

Ironically, Reitzle came to Ford Motor at Nasser's behest. He left Bayerische Motoren Werke AG's management board in 1999 when labor leaders objected to his promotion as chief executive. Nasser quickly grabbed him to supervise Ford's luxury brands.

Now Reitzle, 53, wants to rule over all Ford models from his current London base. This would give him the ear of Bill Ford, broad influence over the automaker's direction and maybe even a shot at becoming chief executive one day.

Bill Ford's dilemma

Reitzle also wants the title of vice chairman -- the same as Lutz's at General Motors. Ford is cool to Reitzle's title pitch, among other things. If this isn't resolved, Reitzle may remain in Europe and shift to Volkswagen AG, where his former boss Bernd Pischetsrieder is in line to become chief executive.

Thursfield, 56, has presented himself to Bill Ford Jr. as an executive who wants -- and has earned -- more authority and one who can work elsewhere. Many give Thursfield, who is British, credit for the automaker's turnaround in Europe and speculate that he, too, may be a contender for chief executive one day.

One dilemma for Bill Ford is Nick Scheele, his chief operating officer and the company's No. 2 since Nasser's exit. Affable and well liked by dealers, Scheele hasn't convinced others that he is the man who will return Ford to strong financial performance.

It's too soon to expect miracles from Scheele, another Briton whose specialty is purchasing. He's got reason to be wary of adding two powerful, ambitious executives to the automaker's top echelon and has told colleagues he might step aside.

Tough task

If Bill Ford is setting up a contest among top executives, it would be a typical auto industry ploy, where leaders preach teamwork while pitting co-workers against one another to see who prevails.

At his first press conference as chief executive last fall, Ford conceded he mightn't keep the title for the long term. Still, it will be easier to relinquish if someone else steps up to galvanize the company. Meantime, he has to prove he can control big egos and ambitions while finding a successor.

General Motors is now receiving good press for hiring Bob Lutz as product czar. He is the first to concede that General Motors already had much better models when he came on board than customers realized at the time.

Lutz, 70, could leave at the end of his three-year contract. Anyone taking a similar job at Ford -- no matter what it's called -- will face more difficult conditions. Not only must the automaker's model lineup be refurbished, Ford's lapses in quality need to be resolved.

And then, even more importantly, shoppers and investors have to be convinced to place their faith -- and money -- in the company once again. Ford shares plunged by about half in the past 12 months, slicing some $25 billion from the company's market capitalization.

Fixing Ford Motor isn't something that will be done through simple imitation.

This article was written by Doron Levin