There Could Be Another Ford in Its Future
Ford Motor Co. on Thursday implemented sweeping management changes that could eventually clear the way for a Ford family member to head the auto maker for the first time since 1980.
There is widespread speculation that William Clay Ford Jr., the great-grandson of founder Henry Ford, is being groomed to become chairman. Ford, 39, son of the owner of the Detroit Lions football club, is now chairman of the company’s powerful finance committee.
The company also stepped up its ongoing global reorganization by consolidating its vast auto parts operations into a separate unit, and streamlining further its product development operations.
Alex Trotman, chairman, chief executive and president, announced the promotions of four top executives, including his presumed successor as CEO. But he refused to comment on plans being considered by the board of directors for his replacement.
Trotman reaches the mandatory retirement age of 65 in less than two years. It would not be unprecedented that he be asked to stay on longer. His health is good and he wants to see through implementation of the reorganization.
Trotman deflected reporters’ queries about the future of William Ford Jr. and his cousin, Edsel B. Ford II, 48, head of Ford Motor Credit Co. When asked if a Ford would again drive Ford, he said “I have no idea. That would be pure speculation.”
The Ford family controls 40% of the voting stock of the company and has made no secret of its desire to have one of its own again assume the mantle atop the nation’s No. 2 auto maker.
William Ford Jr.’s uncle, the late Henry Ford II, father of Edsel II, ran the company from World War II until retiring in 1980, when the first non-Ford chairman, Philip Caldwell, was named.
“The Ford family will not wait much longer to have another Ford running the company,” said Eugene Jennings, a retired professor of business management at Michigan State University who has studied the Ford family for decades.
While William Ford Jr. is seen as a likely future chairman, he is not considered a front-runner for CEO or president, jobs likely to go to more experienced managers deeply involved in Ford’s day-to-day operations.
Described as an intelligent and enthusiastic manager, young Ford joined the company in 1979 and held various low-level jobs before serving in more senior positions in truck, climate control and European operations.
Like his uncle Henry II, William Jr. expresses a desire to help revitalize Detroit. He is spearheading an effort to move the Detroit Lions football club, owned by his father, William Clay Ford Sr., from suburban Pontiac to a new stadium in downtown Detroit.
The company is considering paying $40 million to $50 million to attach its name to the proposed stadium and sew up exclusive marketing rights to it. The stadium is being touted as a symbol of Detroit’s economic revival.
Most analysts interpreted the management moves as bolstering the prospects of Jacques Nasser, the former product development boss promoted Thursday to president of Ford’s automotive operations, and John Devine, the chief financial officer given the additional title of executive vice president.
Two executives promoted to vice chairman--Ed Hagenlocker, the former president of automotive operations, and Wayne Booker, who oversees Ford’s international expansion--are seen as less likely to move forward.
“It looks like a big step up for Nasser and Devine, while Hagenlocker has been shunted aside,” said David Healy, an analyst for Burnham Investment Research.
But Hagenlocker’s new post gives him control of the automotive products operations, a combination of Ford’s four component divisions with 75,000 workers and annual revenues of $14 billion, which is being consolidated into a single unit.
Hagenlocker is charged with building the parts business and enhancing its value. This could involve attracting new outside business, forming joint ventures with other parts makers, or selling all or part of the operations.
Ford began its global reorganization, called Ford 2000, nearly two years ago but the make-over has yet to produce the efficiencies and billions of dollars in cost savings originally promised. The company’s financial performance has been lackluster the past year and sales of some key products, like the Ford Taurus, have been below expectations.
The company hopes to turn things around by further streamlining its product development operations. It is reducing the number of vehicle centers--operations responsible for designing and developing cars and trucks for local markets around the world--from five to three.
“This is an admission that Ford 2000 has not worked as well as expected,” said analyst Maryann Keller of Furman Selz in New York. “I think it’s good they are doing it now.”
