These days, a good auto executive needs the instincts of a savvy politician. Consider the parallel cases of Ford Motor Co. and General Motors in Brazil. In recent years, that country's regional governments have engaged in wild bidding wars for new assembly plants. State subsidies for construction and site preparation have risen well over $200 million per plant. And that doesn't include long-term tax breaks.
But in Rio Grande do Sul, Governor Olivio Dutra last year announced that Ford and General Motors did not deserve costly incentives to build assembly plants in his state (see cover story on Page 18). Dutra, a socialist, wanted to spend more money on education and health care. General Motors, with its Blue Macaw plant nearly finished, could ill afford to back out. But Dick Nerod, a seasoned executive, wooed the leftist governor and offered him some concessions.
By contrast, Martin Inglis, chief of Ford's South American operations, refused to compromise. Within a few months, he managed to find a new site in Bahia for Ford's Amazon plant. Shortly after that, Inglis departed for Ford headquarters in Dearborn, Michigan. Since a major promotion was waiting for him there - and since the Amazon project did not suffer major delays - one can argue that Ford did not hold Inglis responsible for Amazon's troubles.
But it's clear that Ford wants to avoid any lingering ill will in Brazil. Late last year, the automaker named Antonio Maciel president of Ford do Brasil. Maciel, a native Brazilian, is a corporate turnaround artist. Perhaps even more important, Maciel has experience dealing with Brazilian unions. And as a former government official, he helped negotiate a 1992 accord in which automakers cut prices 22 percent in return for a lower sales tax. Maciel's ties to Brazil's political power structure will prove useful. Last year, Brazilian President Cardoso offered unprecedented federal subsidies to save Ford's Amazon project. One presumes that Cardoso will return Maciel's phone calls.
You can e-mail David Sedgwick at [email protected]