Ford Taps Leader of Its European Revival
Ford Motor Co. on Thursday named one of the chief architects of its European turnaround to head the auto maker’s troubled North American operation, which is struggling with eroding profit and market share and the continuing Firestone tire crisis.
Also Thursday, DaimlerChrysler’s Chrysler Group announced a sweeping restructuring of the way it will design and develop vehicles, bringing together engineers, parts specialists and marketers to more quickly bring products to market.
Both companies have been suffering from a spate of bad news.
Ford has seen competitors and product glitches eat into its market share and profit in the crucial truck sector, its quality and productivity rankings slip and a mammoth $2.1-billion charge wipe out second-quarter earnings.
The Chrysler Group lost $1.2 billion in the second half of last year and has begun a wrenching recovery program that includes cutting 26,000 jobs and losing an estimated $2 billion this year.
As expected, Ford Europe Chairman Nick Scheele was appointed group vice president for North America. Scheele ran Ford’s Jaguar unit in 1992-99, during which it doubled sales and greatly improved its reputation for quality and customer satisfaction. He then headed Ford of Europe, which he brought back to profitability in the first quarter of this year.
“Europe’s loss will be North America’s gain,” said Graham Sayles, managing director of Ludvigsen Associates, a Britain-based automotive consultant.
Scheele “is highly respected in the European and world automotive industry,” Sayles said in an interview from London. “He’s seen as having done a very good job with Jaguar and Ford Europe.”
The 57-year-old Scheele will have to tackle the heavy discounts Ford is offering on otherwise high-profit trucks, numerous recalls that have tarnished its reputation for quality, and questions that continue to dog the Explorer sport-utility vehicle, which was involved in most of the fatal accidents that led to the recall of 6.5 million Firestone tires last summer.
Ford will replace an additional 13 million Firestone tires and take a $2.1-billion second-quarter charge. Ford is expected to announce next week that it lost some $600 million in the second quarter.
Scheele replaces Martin Inglis, who was named chief financial officer. Inglis in turn replaces Henry Wallace, who was appointed group vice president for Mazda and Ford Asia Pacific. All three are British.
Ford’s board of directors, finishing a two-day meeting at the auto maker’s headquarters in Dearborn, Mich., also announced that, as expected, Ford Vice Chairman Wayne Booker, 66, who oversaw most of the auto maker’s international operations, will retire at the end of the year.
Chrysler’s overhaul focuses on a new “product creation system” that will bring together in planning teams employees from key areas of the company--design and engineering, manufacturing, procurement and supply and marketing.
Marketers, for instance, have entered the picture much later, after vehicles were essentially finalized.
“This is our new blueprint to more quickly and efficiently develop and market a complete portfolio of distinctive vehicles,” Chrysler Chief Executive Dieter Zetsche said. “It provides the potential for sustained profitability, while allowing Chrysler Group to do what it does best: create innovative cars and trucks that set us apart from the competition.”
One aim will be to slash the number of different components that perform the same function.
“We have 25 batteries; we need maybe five. We have seven sunroof switches and 13 fuel pumps; we need maybe two [of each],” Chrysler Chief Operating Officer Wolfgang Bernhard said. “The customer is going to love it because they’ll get better quality and a lower price.”
Zetsche and Bernhard were sent from DaimlerChrysler headquarters in Stuttgart, Germany, last November to orchestrate a turnaround for the loss-plagued Chrysler Group.
