The rumors just wouldn't die. The Detroit auto show was supposed to be a celebration of Jac Nasser's strategy for the 21st century.
First, Ford would demonstrate its plan to link motorists to the Internet. Next, Nasser would establish his 'green' credentials by announcing plans to sell inexpensive electric cars and bikes.
Instead, journalists were chasing reports that Jac had a heated argument with Ford Chairman William Clay Ford Jr. Try as they might, the two Ford executives could not put the rumors to rest.
Perhaps the problem was Jac's image. His cost-cutting campaigns had earned him the nickname 'Jac the Knife.' Recently, he had launched an employee evaluation program in which the bottom 10 percent of Ford executives were 'invited' to quit.
Jac - a man known for his love of Patek Philippe watches and Savile Row suits - is seen as an executive who enjoys the exercise of power. In truth, Nasser is figuring out how to share power.
In overseas markets, Ford is losing money and market share. In Brazil, Ford was hampered by labor unrest and a stodgy lineup of small cars. In Europe, analysts predicted that Ford's excess production capacity would force it to close an assembly plant and an engine plant.
In short, Ford 2000 - the company's effort to streamline its corporate bureaucracy - needed a tuneup. Six years ago, then-Chairman Alex Trotman had announced plans to produce world cars for overseas markets. Most product design was centralized in Dearborn; regional chiefs had little input.
Nasser understood the problems that occur when a company is out of touch with foreign markets. As a Ford executive, he had held posts in Australia, Argentina, Brazil, Europe, Mexico, the Philippines, Thailand and Venezuela.
Demonstrating a certain gift for improvisation, Nasser recruited former BMW executive Wolfgang Reitzle, then created a job for him.
To fine-tune Ford's growing lineup of luxury brands, Nasser created the Premier Automotive Group - which includes Jaguar, Aston Martin, Volvo and Lincoln-Mercury - and put Reitzle in charge.
Over the course of 1999, the rest of Nasser's team took shape. Nick Scheele would run Ford of Europe, and Terry de Jonckheere would oversee South America. Nasser put the youthful Mark Fields in charge of Mazda following the sudden resignation of Jim Miller.
Nasser also gave his regional chiefs more influence over vehicle design a reorganization, which took effect Jan. 1. In a recent interview with Automotive News International, Nasser was careful to note that he was tinkering with Ford 2000, not dismantling it.
'It's an evolutionary change to our business process,' he said. 'We've changed the way we manage the business - so that we are more strongly aligned around brand, market and consumer.'
Still, a turnaround in Ford's overseas markets is likely to take years rather than months. After steady losses, Mazda is earning modest profits again. But in Brazil, Ford cannot expect big gains until its Project Amazon assembly plant launches production in 2002.
And in Europe, the launch of the redesigned Transit and Mondeo will dampen profits and market share. 'In time, the European market will be much better for us,' Nasser said. 'But I am not expecting any great improvement this year.'
Indeed, Ford of Europe profits in the first nine months of 1999 declined to $83 million, compared with $267 million for the comparable period in 1998. Meanwhile, Ford South American operations lost $357 million in the first nine months of 1999, compared with a loss of $75 million in the first nine months of 1998.
Here's a look at Nasser's turnaround team.
Scheele must cut capacity
When Jaguar unveiled its F-type roadster at the North American International Auto Show in January in Detroit, one might have expected Nick Scheele to bask in the glory.
During his seven-year stint as Jaguar's chairman, Scheele turned the British luxury car maker from an industry joke into a powerhouse.
But Scheele was a no-show in Detroit; he had other things to worry about. Scheele is enmeshed in yet another turnaround effort: making Ford of Europe profitable again.
Ford has been slipping in Europe. Last year, market share for the Ford brand dropped from 10 percent to 9.3 percent, losing ground to such rivals as Volkswagen, Opel and Renault.
In the short run, Scheele must deal with the politically explosive need to eliminate Ford's excess production capacity. In the long run, Scheele must use the autonomy Nasser has given him to revive a stodgy product lineup.
All of this comes at a time when Ford's European operation has been a revolving door for top executives. Scheele knows his task will not be easy.
Scheele's final post?
'Jac is well aware of my views that we should have people in these jobs for longer rather than shorter periods,' said the affable, white-haired executive during an interview in his office overlooking the Rhine. 'I don't plan to be here just one or two years. How long I'll be here, it's tough to forecast. I would imagine I wouldn't move on to another job.'
At 57, Scheele is nearing the end of an illustrious career that began in 1966. Scheele was born and bred in Essex. His father was German, and Scheele speaks that language, along with French. He also is fluent in Spanish, which served him well in his days as president of Ford of Mexico.
Altogether, he spent nearly a decade and a half in North America before Ford brought him back to his native country to run Jaguar. He and his wife Ros hold joint citizenship in the United Kingdom and United States, where their three children live.
The Scheeles live in downtown Cologne, but they also have a place back in rural Warwickshire in England, where they will retire once his career is done. Though Ford of Europe has moved its headquarters to Cologne, Scheele also keeps an office at Warley, Ford's former European base.
When he's not busy turning companies around, he loves reading and music. But he won't have much time for those pursuits in the near term. He'll be too busy tackling Ford's multiple problems in Europe.
Ford of Europe has only one true product star at the moment, the Focus. Other mainstream models such as the Mondeo and the Fiesta are getting tired. Relief is on the way; the Fiesta has been facelifted and the Mondeo will be replaced late this year.
Uneven brand image
Even so, Ford's brand image varies wildly around Europe.
'Ford is great in the UK, where it is popular with the masses who want good, straightforward motoring,' said Simon Empson, managing director of Broadspeed Engineering, a UK firm that researches European car prices. 'But Ford has a lousy image in Germany, where only price-conscious buyers will buy a Ford.'
Nasser's latest shakeup returns some of the regional functions taken away under Ford 2000. Scheele has been rebuilding Ford of Europe, starting with his own leadership team.
He has named a president, Dave Thursfield, who will run day-to-day activities of manufacturing, engineering and purchasing. Martin Leach, the new European product development chief, will report to Scheele.
That's a significant change. Leach's predecessor reported to Richard Parry-Jones in Dearborn.
Scheele also brought in former Nissan marketing whiz kid Earl Hesterberg to oversee Ford's marketing and retail distribution. Under Hesterberg, Ford is consolidating retail networks in the United Kingdom and Germany.
Marketing challenges loom, including the Internet and the potential end of the European Commission block exemption, which protects manufacturers and their exclusive dealer systems.
But overcapacity is Scheele's biggest headache. Ford can produce nearly 2.3 million cars annually in Europe, but needs to produce only 1.7 million. Last year, Ford trimmed 1,000 jobs at its Cologne plant and 2,400 jobs at Genk, Belgium.
Since Scheele took charge last year, Ford has closed factories in Plonsk, Poland and Azambuja, Portugal. The Halewood, UK, factory is being converted to Jaguar production.
Further plant closures are probably on the way, Scheele and Nasser have warned.
Closing any of Ford's assembly plants could be a political nightmare, but Scheele does have some options. Volvo, for example, wants to expand production. Ford conceivably might transfer an underused plant to its new subsidiary.
Scheele says he is willing to try new things. Despite the pressure to boost profits, however, Scheele says he will stick to a long-term plan.
'At Jaguar, we put a game plan together. We said it would take time. ... We stayed focused on the essentials. The business did turn around. You're liable to have more success than if you keep on knee-jerking as things evolve.'
Terry de Jonckheere is a former U.S. Army captain, a graying auto executive with a no-nonsense style.
Antonio Maciel is a corporate turnaround artist, a boyish, informal Brazilian who prefers to work with his shirtsleeves rolled up.
The two men are a study in contrasts, but Ford hopes to exploit the strengths of each.
As the newly named president of Ford South Amer-ica, de Jonckheere must launch the innovative - and crucial - Amazon assembly plant. De Jonckheere has extensive manufacturing experience, but he will need help dealing with Brazil's political complexities.
That's where Maciel comes in. As president of Ford do Brasil, Maciel must pacify suspicious unions and improve Ford's damaged relations with government leaders.
These are not trivial tasks. Over the past two years, Ford's market share in Brazil plummeted from 14.2 percent to 8.8 percent.
Consumers yawned at Ford's dull small cars. Angry workers disrupted production to protest layoffs. And a populist politician nearly torpedoed the Amazon project when he vetoed a government subsidy.
Last August, Nasser moved to clean up the mess when he appointed Maciel. Because Maciel has no automotive experience, he paired him with de Jonckheere - Maciel's immediate boss - who assumed his new duties in January.
Both men have a tall, athletic build and a love of sports. Maciel plays basketball and de Jonckheere plays golf. Both are family men, too, but the similarities end there.
De Jonckheere, a 55-year-old West Point graduate, is a somewhat formal southern Californian with a no-nonsense style. Maciel, 42, is a boyish Brazilian with a more relaxed style.
Maciel had no auto experience when he joined Ford last July, but he knows his way around government and corporate corridors.
An engineer by training, Maciel revived a railway company and later a ceramic tile firm that had fallen on hard times. But his four-year stint at the Ministry of Industry, Commerce and Tourism may be a key reason why Ford hired him.
In 1992, he was the government's chief negotiator in an accord with the automakers and unions. The government cut the auto sales tax, automakers cut car prices 22 percent and the unions agreed to a six-month wage freeze. That was a major accomplishment at a time when inflation was raging out of control.
Maciel prefers to play down his clout in Brasilia. 'I have no greater access to top government officials than any other top chief executive in Brazil,' he claimed.
Tension with unions
However, Maciel later admitted that many of his former ministry colleagues are still on the job. Moreover, Maciel's experience with the unions could be a godsend for Ford, given its recent labor troubles.
Just before Christmas of 1998, Ford mailed layoff notices to 2,800 workers without bothering to inform the union in advance. It was a colossal public relations blunder.
After the Christmas holidays, furious workers repeatedly disrupted operations at Ford's Sao Bernardo assembly plant.
Laid-off employees showed up at the plant to work alongside workers who had not been fired. For security reasons - an excess of assembly-line personnel - Ford was forced to shut down production.
Ford eventually rehired 800 workers. In July, the company must decide whether to rehire the remaining 1,000 laid-off employees. Maciel will come in handy during those deliberations. Union leaders speak well of him.
'Maciel ... is a competent, direct and ethical guy who believes that dialogue can solve problems between labor and management,' said Luiz Marinho, president of the Sindicato dos Metalurgicos do ABC, Brazil's largest autoworkers' union.
'He told us there wouldn't be more layoffs this year,' he said. 'But if there are, we'll discuss the matter before rank-and-file workers get notified in the mail.'
Maciel says he will avoid such mistakes. 'We want to sit down with the unions and deal with labor issues as soon as they come,' he said. 'And we don't want to let unresolved minor issues - like those concerning health plans - to pile up.'
One not-so-minor issue is the future of Sao Bernardo. Workers fear Ford eventually will shut down the plant. Maciel denies it. The plant will continue to turn out the Ka, Fiesta and Courier models, he said.
Still, Ford's future in Brazil clearly rests with Project Amazon. The project was nearly derailed after the governor of Rio Grande do Sul killed a $250 million subsidy for the project. Ford eventually found a new location in Bahia, and cajoled government officials into restoring a similar subsidy. The plant is expected to launch production in 2002.
The $1.2 billion plant will produce as many as five models based on the Ford Focus. To make sure those vehicles are suitable for local tastes, Ford brought 100 Brazilian engineers to Detroit to help develop these models.
With their assistance, Ford is easing its former one-size-fits-all product strategy.
At age 38, Mark Fields might be considered a bit young to be guarding Mazda's company store.
In a country that reveres seniority, Fields is the youngest president any Japanese carmaker has ever had. He had been with the company barely a year when he was named Mazda's president in December.
Just five years ago, he was program manager for the dowdy Ford Aerostar minivan. Now he reports to Ford's chief financial officer, Henry Wallace, Mazda's first gaijin boss.
Fields is taking command of Mazda at a time when the company has returned to modest profitability. Since Ford took over, Mazda has downsized its dealer network, deleted slow-selling models, cut costs and hired marketing experts.
Now Fields must improve Mazda's fuzzy brand image. A decade ago, the company tried to become an upscale niche brand just as the Japanese bubble economy burst. In addition to bad timing, Mazda's product strategy lacked consistency.
New vehicles coming
To fix this problem, Mazda has a batch of new vehicles in the pipeline. Key vehicles include the Tribute sport-utility, which Mazda will share with Ford. Mazda also plans to produce a rotary-powered sports car and a sporty sedan based on the next-generation Miata's platform.
But Mazda still has a litany of troubles. It still relies too heavily on exports from the home market. Its supplier base is weighted too heavily in Japan. And its union is unhappy.
George Peterson, president of Auto-Pacific, an industry consulting firm in Tustin, California, noted that Mazda's turmoil has left it mired in the second tier of Japanese automakers.
'In Japan, they still haven't established which brand they want to stress,' Peter-son said. 'There's too much distribution diffusion. And in the U.S., they had too much product breadth instead of focusing on what they do well.'
As if all these problems weren't enough, Fields will have to establish his credibility in a culture that values engineering but doesn't really understand brands. Fields admits he is not an auto enthusiast. 'I don't have gasoline in my veins,' Fields said.
That is at odds with most presidents of Japanese automakers, who typically were trained as engineers. But industry analysts say excessive reliance on engineering - at the expense of marketing, finance and customer service - is what got Mazda into deep trouble.
Too many niches
Letting the engineers go wild resulted in one of Mazda's biggest problems in the early 1990s: too many niche products that no one had asked for. Fields thinks he can win by letting the engineers have fun with their projects as long as the vehicles fit specific market needs.
Fields also thinks he can satisfy skeptics who suspect he's too young for the job. 'I experienced this in Argentina (where he was in charge of Ford's operations),' he recalled. 'That country also is very respectful of age. They ask, `Who is this young guy?' But I think it isn't about how old you are, but what you've done with your years.'
Fields has handled sales and marketing assignments on three continents. Questions about his age will evaporate once he proves his competence, Fields predicts.
'I've run organizations. But it all comes down to showing your capability, because people can smell that out right away.'
This story was reported by Brad Wernle in Cologne, Mark Rechtin in Los Angeles, Mike Kepp in Sao Paulo and David Sedgwick in Detroit.