Ford's turnaround artist
Englishman Nick Scheele's background will come in handy as he tries to fix North American operations.
Nick Scheele, the newly named chief of Ford Motor Co.'s North American operations, strode among the vehicles, greeting people as he made his way to a photography session. As the photographer positioned her camera, Scheele chatted with the owner of a Thunderbird convertible, a woman who once worked in a nearby Ford seat factory. Scheele asked if she knew a manager who had worked there 20 years earlier, and she smiled in recognition.
It was a vintage Scheele moment. Scheele was working the crowd like a veteran politician, displaying his remarkable memory for names as he met old acquaintances. His relaxed manner gave no hint of Ford's announcement that same day that it would eliminate 5,000 salaried jobs in North America. Other executives might have skipped the event, fearful of confrontations with angry employees.
The encounter carried another lesson: Scheele is no stranger to the United States. During his career at Ford, the 57-year-old Englishman spent 10 years in Dearborn, Michigan, working in Ford's purchasing department.
At first glance, it seems ironic that Ford would turn to an Englishman - even a well-traveled Englishman - to bail out its North American operations.
But Scheele's European background will prove useful. He led turnarounds at Jaguar and Ford of Europe - operations that arguably were in worse shape than the North American unit. In the long run, Scheele will likely transplant Europe's most promising manufacturing practices to Ford's U.S. factories. For example, Ford will set up a European-style supplier park next to its assembly plant in Chicago, Illinois, where Ford will build a sport wagon version of the Taurus. That project already was on the drawing board when Scheele arrived. Look for him to try that elsewhere, as opportunities arise.
The job cuts are evidence that Scheele is wasting no time launching Ford's turnaround. Scheele also moved quickly to organize his executive team.
In August, he moved his senior executives from Ford's world headquarters in Dearborn to the company's nearby design center. Key executives moved out of the 12th-floor offices of the Glass House, where company CEO Jacques Nasser presides. Scheele is quick to praise Ford's chief executive, but the move carries an implicit message: Scheele will make the day-to-day decisions in Ford's crucial home market.
He is going to be busy. In North America, Ford has suffered a series of crises. In May, Ford recalled millions of defective Firestone tires, in the wake of allegations that the Explorer was prone to rollover accidents. That recall alone cost Ford $2.1 billion after taxes. Meanwhile, Ford's U.S. market share for the first eight months of the year was 19.1 percent, down from 20.3 percent a year earlier. Ford's market share in Canada has plunged to 16.6 percent, down from 22.9 percent in 1996. To boost sales, Ford is spending huge sums on consumer rebates and incentives.
But Scheele downplays the notion that Ford needs a savior.
'It's not broken - let's be clear about that,' he says. 'We've got a few problems, but the barn isn't burning down.'
Scheele's confidence is not an act. 'This is his third tough job in a row,' says John Lawson, automotive analyst for Schroder Salomon Smith Barney in London. 'He's used to coming into some pretty poor situations. The man has the gift of winning confidence throughout the organization.'
Overtaken by events
Scheele was not eager to return to Dearborn. He could have retired happily to his rural home in Warwickshire, England, but Nasser had other ideas. In 1999, Nasser asked Scheele to run Ford's sickly European operations. The affable, white-haired executive with the basset-hound features was suited to the job. He speaks German, French and Spanish fluently.
Scheele and his wife, Ros, hold British and American passports. They raised their three children primarily in the United States. But they did not expect to return to the United States and sold their summer home on Catawba Island in Lake Erie last year. 'I'd planned this (the chairmanship of Ford of Europe) to be my last job,' says Scheele. 'But obviously I got overtaken by events.'
Associates describe Scheele as unflappable, a useful trait in his new job. While he was chairman of Jaguar, Scheele made a car trip to York to celebrate the opening of a dealership. After Scheele and his driver were caught in a torrential thunderstorm, the car hit a pool of water. The driver lost control; the car climbed an embankment and rolled over.
Scheele later told an associate that the accident unfolded in slow motion. As it happened, he remembered all of the safety features he helped bring to Ford during his purchasing days, including the airbags and pretensioners, and how relieved he was to learn they functioned as advertised. Scheele was able to joke about the incident in the office the next morning.
He added to his reputation last year, when he spent a night with his wife at a hotel in downtown Cologne, Germany. That night, the fire alarm sounded and all guests were asked to gather in the lobby. Scheele and his wife donned their bathrobes and dutifully filed down. The next day, German newspapers ran photos of Ford of Europe's chairman, asleep on the floor despite the excitement around him.
Coaches and kings
In Dearborn, Scheele's relaxed demeanor will provide an interesting contrast to Nasser's.
'Nasser's a very impulsive guy,' says David Cole, director of the Center for Automotive Research in Ann Arbor, Michigan. Scheele will complement Nasser's quick decision-making with his own skill at building consensus, Cole predicts. 'Nasser is `Ready, fire, aim.' Nick will bring a sense of teamwork to the upper level of the company. That's very necessary right now.'
Several key executives will report directly to Scheele. His team includes Jim Padilla, Ford's top manufacturing executive, and Shamel Rushwin, who will oversee labor relations and personnel. Kathleen Ligocki will handle strategy for the North American market. Brian Kelley will direct Ford's e-business operations. And Chris Theodore runs Ford's North American product development, following a recent move by Scheele to combine car and truck development (see Page 20).
Now that Scheele is in charge of Ford's North American team, the company has significantly lightened Nasser's workload. Before Scheele was brought in, some observers thought Nasser was stretched too thin. He does not have a chief operating officer, and as many as 14 executives reported directly to him. With Scheele on the scene, that number has been reduced to 13. By contrast, General Motors CEO Rick Wagoner has only nine executives reporting to him.
Scheele is said to be on good terms with the Ford family as well as Nasser. That will give him a free hand to form a turnaround plan for Ford's North American operations. That plan is to be unveiled by year end (see Page 18).
Industry observers speculate that company Chairman William Ford Jr. favored Scheele's promotion in part because he is uncomfortable with Nasser's take-no-prisoners management style. Ford, Scheele and Nasser have been careful to avoid any public displays of discord. But Cole asserts that the auto industry is moving away from autocratic leadership to a more collegial management. 'We'll see more emphasis on a management style that requires coaches rather than kings,' Cole says. 'Scheele is like a coach. Nasser, (Volkswagen CEO Ferdinand) Piech and (DaimlerChrysler CEO Juergen) Schrempp are more like kings.'
A quick study
When Scheele came from Jaguar to take Ford's top European job, he spent time in the cafeteria in Brentwood, England, talking to employees about their views of the company's strengths and weaknesses. Associates say Scheele understands ordinary people's aspirations in a way that Nasser, the visionary, does not. 'He was able to converse equally well on the shop floor as at the boardroom level,' says a Jaguar employee. 'He treats everyone equally.'
Scheele is known as a quick study - someone who can quickly learn the essentials of an operation that he has not previously managed. 'He would tell me he knew nothing about marketing, yet in terms of natural skills, he couldn't be beat,' says Roger Putnam, Jaguar's longtime global marketing chief.
Scheele acquired an understanding of Ford culture during his 10 years in purchasing in Dearborn, when he visited virtually every corner of the Ford empire. 'He works in a very laid-back way,' says Putnam. 'He appears to ignore some of today's concerns. He's able to see several moves ahead. You're focused on what's happening that afternoon. He's focusing on what's going to happen three months from now.'
Many terms are used to describe Scheele: charming, affable, rumpled and fatherly. Associates also describe Scheele as a consummate team player. Says Cole: 'Ford needs somebody like Nick. I would call him a peacemaker in the hierarchy in the company.'
a tough side, too
But Scheele can be tough. At Ford of Europe, he shut down Ford's Dagenham plant despite protests from union leaders. And when he ran Ford of Mexico, Scheele demonstrated his willingness to take strong measures during labor disputes.
More than a decade ago, Ford's Cuautitlan assembly plant was torn by dissension between the union and a rival group of dissident workers. Ford earlier had fired a number of dissident leaders, but tensions grew worse.
On January 8, 1990, a dissident was killed in a violent confrontation inside the plant with union enforcers armed with pipes, chains and pistols. Eight others were wounded by bullets and 100 were hospitalized. Two weeks later, Scheele regained control of the factory after 5,000 security police ejected several hundred strikers. The dissidents sued, claiming Scheele condoned the actions of the union's enforcers. The two parties later settled the lawsuit.
At 57, Scheele still has a few years left in him, although it is uncertain whether he will stay at Ford until he is 65. 'I had planned to retire when I was 60,' he says. 'I've probably got to stretch that now.' Should Nasser falter, Nick Scheele might find himself changing jobs once more before that retirement date.
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