Detroit - By giving a direct operational role to Chairman William Clay Ford Jr., Ford Motor Co. took another step last week to speed decision making.
But the latest round of management changes occurs at a company already fatigued by organizational upheaval. Executives now must learn how to deal with yet another regime.
Last week, Ford created an Office of the Chairman and CEO, increasing the authority and decision-making voice of Bill Ford. On July 12, the company handed the critical North American market to Nick Scheele, beefing up his executive team as it did so.
The board of directors is moving because CEO Jacques Nasser tried to do too much single-handedly, weakening his management team, observers say. The company is wrestling with declining market share, sloppy product launches and the Firestone tire recall.
'Ford lost its way in making decisions,' said Sean McAlinden at the Center for Automotive Research in Ann Arbor, Mich. 'There was too much detail going to the CEO and not enough decision-making power being sent to others for things to happen.
'There were too many different areas reporting in detail seven days a week to the CEO,' McAlinden said. 'Jac Nasser works seven days a week, 15 hours a day. He never takes a break. But the company is too big to micromanage like that, and the Ford family is concerned.'
Now the Ford board is imposing a new structure, one that will diminish Nasser's role as it strengthens the authority of executives such as Scheele.
'There was no team under Nasser,' said one person familiar with the situation. 'There were strong individuals fighting for what they needed. But there was no glue, no unified policy, so they knew where their turf stopped and others' began and how to bridge each other's turf. Nasser could not form the systems, so he tried to resolve everything himself.'
As Ford circumscribes Nasser's role, the company is cultivating a new group of decision makers and shifting some operations. For example, in the new regime, Jim Padilla, group vice president of manufacturing, takes over quality. Formerly, the 500-person organization reported to product development chief Richard Parry-Jones.
The management change is the latest in a series of upheavals in the past six years.
1995: The company launched Ford 2000, a wrenching top-to-bottom change designed to transform a regionalized company into a centralized, global corporation.
1999: Nasser rose to CEO and Bill Ford became chairman, which led to wholesale changes in the upper ranks of Ford management. The changes were effective Jan. 1, 1999, but announced in September 1998. By October 1998, five vice presidents and two group vice presidents were gone. Others would follow as Nasser began hiring talent from competitors and nonautomotive companies.
2000: The company retreated from Ford 2000 in favor of six autonomous customer business groups, essentially re-creating regional operations.
2001: Scheele takes over Ford brand operations in North America, replacing Martin Inglis, who held the job for 19 months. Scheele will run an expanded and more powerful organization than Inglis. Scheele's cabinet includes two newly created vice presidencies. In addition, two more vice presidents who reported to Nasser now report to Scheele.
Simultaneously, the Ford organization absorbed new companies. Ford bought Volvo Car Corp. in 1999 and Land Rover Ltd. in 2000.
Reorganization has been a daily fact of life as Nasser hired executives from outside the automotive industry, launched e-commerce initiatives and pressed relentlessly for better shareholder return.
In the 1980s and 1990s, GM was criticized widely for regularly tearing up its organizational chart and shifting executives from job to job.
Now the company's executives have more changes to digest.
With the Office of the Chairman and CEO, Bill Ford and Nasser will meet every two weeks, relying on a formal agenda.
'In the past, they would talk almost every day,' said Jim Vella, Ford spokesman. 'But it was not necessarily a formal, sit-down meeting with an agenda. This allows various business operations to know the timetable and when to bring issues forward. It is a formalized process to review business issues.'
The change means that Bill Ford will have a clearer role in decision making and more formal contact with the company's managers.
'We face challenging times, and this new structure allows both Jacques and me to work hand-in-hand to lead the company forward and meet these challenges,' Bill Ford said in a statement.
Vella decline to specify an example of an issue that would be handled jointly today but would have been Nasser's sole responsibility in the past.
The 14 executives reporting to Nasser will continue to do so, Vella said. No executive reports to the Office of the Chairman and CEO.
Who's in charge?
'The critical issue is, can they speak as one voice?' asked Mike Flynn, director of the Office for the Study of Automotive Transportation at the University of Michigan in Ann Arbor. 'Otherwise people will feel they are getting one set of directions from one and another set of directions from the other.
'Typically when two people share power they are jockeying so that one will be the winner. In this case there is no question who wins down the road. Bill Ford is younger and will be there longer.' Bill Ford is 44; Nasser is 53.
Others are not so sanguine.
Putting two executives at the top creates the potential that those working in the organization will receive conflicting signals, said a source. 'Whom do you please? To whom do you refer for answers?'
The changes 'increase the potential for management distraction at a bad time for Ford,' said John Casesa, analyst with Merrill Lynch. He said Ford is grappling with replacing 13 million Firestone tires, an aggressive General Motors and an attack on the truck market by Japanese automakers.