Ford Denies Rumors of Leadership Shift
Ford Motor Co. Chief Executive Jacques Nasser said the auto maker’s directors are “extremely supportive” of him and rejected reports that the company may reshuffle top managers because of a tire safety probe or Ford’s slipping performance in a quality survey.
The CEO’s performance has been watched closely since Bridgestone/Firestone Inc. recalled 6.5 million tires in August after reports of fatal accidents, many involving the Ford Explorer, the best-selling sport-utility vehicle.
With legal claims mounting, each company has tried to shift blame toward the other. The dispute boiled over last month when Firestone dropped Ford as a customer and Nasser said Ford would spend $3 billion to replace an additional 13 million Firestone tires.
Nasser also said the company won’t rename its Explorer sport-utility vehicle.
“All of the research we do suggests there is incredible loyalty to the brand of Explorer,” Nasser said in an interview. “It’s one of the safest vehicles on the road.”
Chairman William Clay Ford Jr. and other directors want fewer executives to report directly to Nasser, the New York Times and Wall Street Journal have reported, citing unidentified people familiar with the company.
“The implication in the news reports was this was linked to the Firestone issue or linked to what [Chairman] Bill Ford and I were doing,” said Nasser, who has been CEO since 1999 and runs Ford without a chief operating officer. “There’s no truth to that at all.”
Nasser declined to comment on any specific management changes Ford is weighing.
Nasser, 53, probably does have the board’s support, analysts said.
Even so, Ford’s slipping performance in the most recent J.D. Power & Associates quality survey may reflect his management, said Burnham Securities Inc. analyst David Healy. The company fell behind General Motors Corp., DaimlerChrysler and four other auto makers in the influential survey, which auto makers often refer to in advertisements.
“I think maybe the board felt he was stretched too thin,” Healy said. “But my feeling is that he still has the full support of the board--there is no management crisis at Ford.”
Nasser said he expects to be judged on performance and “wouldn’t have it any other way.”
Prudential Securities analyst Michael Bruynesteyn said Nasser still has a mandate from the board to run the company.
Craig Cather, president of CSM Worldwide Inc. in Farmington Hills, Mich., said “management is under the gun at Ford” because of the size of the tire replacement program, but that Nasser handled it “probably as well as anyone could handle it.”
The National Highway Traffic Safety Administration is investigating 174 traffic deaths, many involving tread separations on Firestone tires mounted on Explorers.
Sales of the Explorer--Ford’s biggest moneymaker after the F-150 pickup truck line--have fallen 21% this year, with analysts attributing part of the decline to the tire issue. Other factors include competition from Toyota Motor Corp. and Ford’s own introduction of sport-utility models such as the smaller Escape.
Ford blames the accidents on the tires, which are made by the U.S. unit of Japan’s Bridgestone Corp.
Firestone last week called on the government to investigate the Explorer’s design, which the tire maker said contributes to the loss of control.
Ford has handled the tire recall correctly, Nasser said. He moved to replace the additional 13 million Wilderness AT tires last month after an internal study said the Firestone products might be prone to fail eventually.
“We also felt very strongly we had lost trust in Firestone, and more importantly our customers had lost trust in Firestone,” Nasser said.
Meanwhile, Ford expanded its tire recall to Europe, with plans to replace Firestone tires on about 23,000 vehicles across the continent. The company had earlier said that no European vehicles would be affected by the recall effort.
Ford shares fell 37 cents to $24.22 on the New York Stock Exchange.
