Ford family back behind wheel of US car giant as Nasser is ousted

Scheele made second in command as chief executive pays for Firestone fiasco, dividend cut and slump into losses
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The Independent Online

The Ford Motor Company, America's second largest car maker, ousted its flamboyant chief executive, Jacques Nasser, yesterday following a stormy three-year tenure undone by the declining economy and the after-effects of last year's Firestone tyre recall.

Mr Nasser will be replaced by William Clay Ford Jnr, a great-grandson of the company's founder, whose rocky relations with Mr Nasser have been the subject of increasing media speculation over recent months.

The change signalled a shift in Ford's priorities, away from Mr Nasser's hard-driving management techniques and fascination with internet services and back to an old-fashioned focus on producing and marketing high-quality cars.

It was also a bellwether of the effect the burgeoning recession is having on US business. Mr Nasser is the second high-profile chief executive to lose his job in a few days, following the announcement over the weekend that United Airlines was replacing its top man, James Goodwin. Both companies experienced rapid sales growth at the tail-end of the Clinton-era boom, only to see that growth melt away over the past year. Ford recently reported a $320m third-quarter loss and it cut its dividend.

In Ford's case, it is doing what it has done many times in the past, turning to the Ford family, which controls 40 per cent of the stock, in hard times. Mr Nasser, like previous chief executives who crashed and burned, had the status of an outsider unafraid to institute sweeping reforms but foundthe appetite for change dried up when times got tough.

Sir Nick Scheele, who was yesterday promoted to Ford's chief operating officer, said recently: "We are going back to the basics. The company with the best cars and trucks wins."

Mr Ford paid tribute to the ousted chief executive but said that the "cacophony of noise" about Mr Nasser's future had caused "paralysis" at the top of the organisation. "The sole reason for these changes is to ensure the ongoing success of the Ford Motor Co," Mr Ford said. "This company is bigger than any individual and it has proved that time and again. It transcends any individual and that includes me." He was conscious critics would accuse the company of nepotism but said having a name such as Ford could be "a burden or an opportunity".

Mr Nasser never lacked for energy or ideas, broadening Ford's partnerships with other car makers, buying Volvo and pushing the company into a series of internet ventures.

At first the strategy seemed to work. Although it failed in its ambition to overtake General Motors as the number one US car company, Ford nevertheless saw record sales in 2000. But Mr Nasser made himself unpopular with line managers by grading them and threatening to dismiss anyone in the bottom 10 per cent ­ a policy dropped last summer. He alienated car dealers by proposing a company buyout of dealership networks, another idea eventually dropped.

His internet ventures, particularly an online car parts market he hoped to create with the other auto giants, hit the wall along with the rest of the tech sector. Sales plummeted 11 per cent in the first nine months of this year, Ford lost market share and there were growing questions about quality.

Mr Nasser's greatest challenge was the Firestone tyre problem after reports surfaced last year of people dying because the treads on Ford Explorer cars were separating. Initially, 3.5 million tyres were recalled, but Mr Nasser ­ determined to blame the fiasco on the tyres ­ severed Ford's 100-year relationship with Firestone and withdrew the other 13 million Firestone tyres in circulation.

The move shored up Ford's public image, but it also cost the company $3bn (£2.1bn) and caused friction between the Ford and Firestone families, which are related by marriage.