BILL FORD Jr, the former chief executive of the car company that bears his name, has admitted in private that he had lost credibility as chief executive and needed to bring in outside help to put the family business back on track.
His comments were made just before it emerged that the Ford board had appointed Alan Mulally, a former Boeing executive, as Mr Ford’s replacement.
Mr Ford, who took the helm in October 2001 to replace Jacques Nasser as chief executive, told close associates on Tuesday that he did not have the right personality to convince shareholders or workers that he could do what was needed to turn Ford around.
David Cole, head of the Centre for Automotive Research (CAR), a Detroit think-tank, spoke to Mr Ford on Tuesday night, shortly after his decision to give up the chief executive’s job at Ford was announced. “He said he was relieved that the board had taken this step,” Mr Cole said. “He felt it is absolutely the right thing to do.” Mr Cole added that Mr Ford acknowledged that “he can say tough things, but people just do not buy it”.
He said: “Bill played a very important role after Jacques Nasser. He had to re-engage the dealerships with the company when they had all but shut down. But that was a different job. He is a very nice guy, but the company does not need a nice guy in that job right now.” Mr Ford will stay on as executive chairman.
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The appointment of Mr Mulally was seized by the debt rating agencies as a rare positive move for the ailing carmaker, and a signal that Ford’s credit rating might one day be dragged out of the junk yard.
Mark Oline, managing director of Fitch Ratings, Chicago, said: “Alan Mulally has a strong track record in manufacturing, guiding Boeing’s commercial airplane division through an extremely challenging time.
“He has strongly emphasised manufacturing efficiency and outsourcing, while facing high structural costs, including a unionised force, all of which apply to Ford.”
Bruce Clark, senior vice-president at Moody’s, the ratings agency, will review Ford’s B2 debt rating in the light of Mr Mulally’s appointment but said that the new chief executive has a tough job ahead of him to turn Ford around.
“Mr Mulally has a daunting task in attempting to reshape Ford’s operating model . . . However, he comes to the company with a strong background in engineering, manufacturing and product development. We think that this will be a valuable skill set as he fills the CEO position at Ford.”
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Standard & Poor’s was more cautious but Bob Schultz, the analyst who watches Ford, said that he viewed the move to strengthen senior management as “a mild positive”.
A spokesman for Ford declined to comment but confirmed that the former chief executive and the CAR head had spoken on Tuesday.