Quality Magazine

A Ford Takes the Wheel

May 5, 2003
For the first time since the late 1970s, a member of the Ford family is running the automaker of the same name. William C. Ford Jr., Henry Ford's great-grandson, has taken over as chief executive officer at Ford Motor Co. (Dearborn, MI). Ford replaces Jacques A. Nasser, whose tumultuous three-year reign as CEO has been marred by a series of quality problems that last year alone cost the company at least $1 billion, according to a Sept. 3 BusinessWeek story. The company, which until recently was considered by Wall Street to be the best-run U.S. automaker, has lately been mired in red ink--with losses totaling $1.4 billion in the past two quarters.

The company's earnings were hurt by the Firestone tire recall. In the first quarter, earnings were $1.1 billion. Ford's sweeping move last spring to recall some 13 million Firestone Wilderness tires at a cost of up to $3.5 billion may be among the most publicized, but it is one of only several quality problems to hit the company recently. In May, Ford recalled its redesigned 2002 Explorer, after engineers apparently forgot to ad-just a rail used to guide the vehicle along the assembly line. The result: a nine-inch gash in some of the tires. A few weeks later, the company issued another recall on the Explorers because loose rear-hatch windows may shatter when the hatch is shut. Additional recalls have involved the company's new Escape and Focus models.

If the recalls weren't problematic enough, a survey released last May by J.D. Power & Associates revealed Ford has fallen behind its rival General Motors in quality and now ranks last among the big-seven automakers. The study concluded that Ford made no improvement in overall quality last year. As CEO, Bill Ford will have his hands full. He has already taken steps to surround himself with seasoned executives. Working alongside Ford will be Nick Scheele, chief operating officer, and Carl Reichardt, the vice chairman who will oversee the company's finances. Sheele ran Ford's Jaguar unit, while Reichardt, a Ford board member, is the former chairman of Wells Fargo & Co.