However, he failed to win over Wall Street. Ford stock -- in similar fashion to the Nasser days -- fell nearly 40 percent during his time as CEO. Meanwhile, investors smitten with Tesla drove its market cap past Ford’s this year despite its massive cash burn and fledgling business model. In addition, the automaker fell short of its quality goals in 2016, meaning executives took a hit.
Ford’s board of directors, which grilled Fields this month before the annual shareholders meeting, decided to move in a new direction.
The following excerpts from Ford Tough illustrate some of the similarities between Ford back then and now:
“Jac Nasser had a plan when he took over as CEO of Ford Motor Company. As he saw it, shareholders suffered from an undervalued stock price because they owned shares in what was primarily a manufacturing company. In 1999, most of Wall Street was bored with old-economy companies, even ones like Ford.”
The next big thing
“Ford ... was in the midst of its whirlwind transformation tour, guided by Jac Nasser, desperately trying to be part of the next big thing.”
Dedicated to delivering shareholder value
“Nasser was a lifelong company man who had no intention of totally abandoning the automotive business. He simply wanted to take Ford’s prowess and capital and expand and diversify the company so that it more closely resembled a consumer company, like, say, General Electric or Coca-Cola -- companies that commanded price-to-earnings ratios closer to 36 and 40, instead of 9 to 12.”
Then: Ford vs. e-tailers
“The American investment world was falling under the spell of a technology-driven consumer age in which the mere hint of a newfangled business model drew raves and investment dollars.
“[Amazon] made nothing in terms of profits and was little more than an order-fulfilling bookstore with a warehouse and a Web address. It lost $124 million in 1998 on sales of $610 million, yet by the end of the year was trading at a multiple of 97.4 multiple over sales. ...
“The online auctioneer eBay ... turned a razor-slim profit of $215,000 on revenues of $14.9 million in the first half of 1999. ... But eBay’s stock had a market value of more than $20 billion and was trading at 1,600 times revenues.”
Looking for growth opportunities amid new tech
“Ford Motor Company, reasonably, was headed toward another downturn sooner or later, most likely when SUV profits dried up. Nasser was looking at consumer-based growth companies like Amazon.com, which in late 1998 passed manufacturers like Alcoa, Caterpillar, and International Paper in market capitalization before even making a dime in profits, simply because they were Internet based. His idea was to move Ford ... closer to consumers through technology and diversification.”
Grilled by the board of directors
“The board set a two-day meeting to grill the company’s CEO about the range of issues troubling the company, including declining profits, quality, and productivity; increasing costs; and unhappy employees and dealers.”