Problems mount for Ford's embattled CEO

Even as he outlined dismal financial results for Ford Motor Co. this week, a senior executive for the automaker went out of his way to heap praise on Ford's embattled president and chief executive, Jacques Nasser.

"I think he's the leading CEO in the auto industry," said Martin Inglis, Ford's chief financial officer. "He was before, he is today, and I think he will be in the future."

But veteran observers of Detroit's auto industry say it's a sure sign of trouble, or a "Motown Showdown," whenever an executive publicly pledges loyalty and support for his CEO.

And Inglis himself complained, after lauding Nasser in remarks to reporters on Wednesday, that persistent rumors about his possible ouster in a boardroom coup were hurting the company's bottom line.

"It's disrupting us, it is causing confusion for our employees and it's not helping our business," he said.

No top Ford executive, or member of its board, has gone on record as saying that Nasser, a Lebanese-born Australian, is about to lose his job at the world's second largest automaker.

But Wall Street and Detroit have been awash with rumors he might be on his way out ever since July, when Ford announced a power-sharing agreement between Nasser and William Clay Ford Jr., a great-grandson of the automaker's founder, that was widely seen as clipping the chief executive's wings.

And rumors swirled again this week -- just as Ford was getting ready to report its first consecutive quarterly loss in nearly a decade -- after Forbes magazine reported that Nasser had lost the confidence of the Ford family and will probably be ousted before year-end.

Ford family members wield heavy influence over the company's board, since their Class B shares give them 40 percent of its voting power. The Forbes report, which quoted executives and others familiar the Ford family's views, surfaced soon after Ford cut its dividend for the first time since 1991.

Nasser called the Oct. 10 dividend cut "a difficult but necessary action" at a time when the Sept. 11 attacks in New York and Washington had compounded poor operating results and other pre-existing problems at Ford.

But the halving of the dividend, from which Ford family members received a combined total of $85 million a year just for their Class B shares, may have fueled demands for what James Higgins, a columnist for The Detroit News, described this week as a "ritual sacrifice" of Nasser.

"The edifying sight of a CEO being hacked to bits upon a high altar is a traditional way to bolster the faith and stir the multitudes to more fervent effort," Higgins said.

"The family has made the decision already to jettison Nasser," added a Wall Street analyst, who attributed his information to a senior banking source with links to Ford.

COMPANY IN TROUBLE

In the last year, Nasser has presided over a company mired in the Firestone tire crisis, nagging product quality and recall problems, employee and consumer lawsuits, declining profitability and increased competition.

It is also a company gripped by widespread uncertainty as it hammers out details of a restructuring plan first announced in August, when Ford said it was cutting up to 5,000 white-collar jobs or about 10 percent of its North American work force.

Further actions, which may include broader job cuts, will be announced in December.

Several sources close to Ford, in interviews this week, denied knowledge of any plans to topple Nasser, who until recently was regarded as one of the auto industry's most capable executives.

One of the sources acknowledged Nasser could be ousted as early as December, however, saying Ford's fortunes have fallen recently and "the reputation of a company and the reputation of a CEO pretty much go hand in hand.

"Obviously right now the results are not very strong. So it would make sense to question the CEO. I think that would be true at any company, not just Ford," the source told Reuters. "There's not a lot of positive news out there."

"FLEA ON OUR BUTT"

Ford chief spokesman Jason Vines, exasperated by what he sees as nameless sources "throwing out garbage" about Ford, said Nasser commands great respect within the company, meanwhile.

"We believe in Jacques, and believe that we're in a position to be the best company in the world for what we do because of Jacques," said Vines.

"The guy is the CEO, he is in charge of the day-to-day operations of Ford Motor Company globally. And everybody who works for him will tell you that. That's what we're doing when we're not scratching this flea on our butt, that is these constant baseless rumors."

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