Issue: Jan 2005


100 + 10: Management Shakeups



Visionaries or Illusionaries

by John Peter

The last 10 years have seen a lot of new faces in the boardrooms and at the helms of the worldís automobile manufacturers. Many of the changes were expected, and while there isnít the space to cover every change of the guard, there were a couple that warrant review.

Bernd Pischetsrieder graced Automotive Industriesí 1995 cover. The Chairman of BMW was 1995 Executive of the Year. He assumed the position in 1993 while still in his forties and set to grow the company. Purchasing Britainís Rover from British Aerospace for $1.2 billion in January of 1994 instantly doubled the size of the organization and promised to pay big dividends. Land Rover alone, on the strength of sales in North America, was worth the price with Roverís of front-drive cars an added bonus.

Pischetsriederís intent was to merge the companies yet keep the two cultures separate. He formed joint committees, half run by BMW, half by Rover. Pischetsrieder felt that maintaining complete separation in product development and marketing, BMW and Rover would be able to sharpen their respective brand images. What Pischetsrieder didnít know was that Roverís image had already been dulled beyond repair. The company hadnít made a dime since the 1970s and sales suffered due to a very relaxed working environment that produced less than quality results. The losses at Rover were not only escalating, but dragging down the entire enterprise with it. BMW scuttled the separation strategy in 1996, putting its own people in all key management and marketing positions in an attempt to stop the bleeding.

Pischetsrieder hoped that the new Land Rover Freelander would rack up big sales in the U.S. and help reduce some of the debt. But Freelander suffered from serious quality problems and never made it across the Atlantic until 2001, under Ford ownership.

By 1998, BMW had invested over $4 billion dollars in Rover and was predicting losses of $1.6 billion over the next two years. Investors were starting to question Pischetsriederís leadership abilities. It all came to a head during a heated boardroom dispute in 1999, where Wolfgang Reitzle, senior head of product development, accused Pischetsrieder of ruining the company. Pischetsrieder resigned in February of 1999, eventually landing the top job at Volkswagen in 2002 following the retirement of Ferdinand Piech, inheriting a company with quality problems and an identity crisis.







 
Jac Nasser saw Ford Motor Company as more than just a car company and product quality suffered under his reign.
Not all bad came out of Pischetsriederís reign. BMW can thank him for the very profitable Spartanburg, S.C., plant and the hot-selling Mini. Ford Motor Company CEO, Jac Nasser, addressed a large group of automotive journalists at Fordís 2000 media holiday party. During his speech, he half-jokingly told those attending that he was changing his name from Jac to something like ďPaul,Ē so the press would stop calling him ďJac the knife,Ē a name he earned for his penchant for cutting jobs to lean-up the operations that he ran as he climbed the Ford corporate ladder. Nasser was named CEO on January 1, 1999.

He had waited 30 years to occupy the blue oval office and launch the grand plans he had for the company. He envisioned Ford as more than the lean, mean car-making machine of former chief Alex Trotman and his Ford 2000. Nasser would make Ford a leading consumer company for automotive products and services. His ďcradle-to-graveĒ strategy would have Ford involved in everything from in-car e-mail, to instant auto repairs, to recycling.

He saw the internet as the future, embarking on a massive e-commerce venture, signing on with AutoXchange, teaming up with Yahoo! and announcing that Ford would provide computers with internet access to virtually all of its employees.

His unique take on the business caught the eyes of the editors at Automotive Industries, who chose him as Executive of the Year in 1999, merely a month after he took the helm. ďFord is an amazing place right now; we havenít seen a personality like Jacís in this business for so long,Ē David E. Cole, director of the University of Michiganís Office for the study of Automotive Transportation, told Business Week that same year. ďItís either going to explode in greatness or explode.Ē

Nasserís troubles began when he tried to change the ďblood vesselsĒ of everyone in the company, as he told AI in 1999. He wasnít making any new friends at the 90-year-old company. His affirmative action plan promised that Ford would be made up of 30 percent minorities. But that seemed to come at the expense of an aging and predominantly white top-level management who were threatened by a management ranking system seemingly designed to eliminate those who didnít fit into the plan, creating ill feelings among Ford employees and fostering several class action discrimination suits. While Nasser was busy changing Fordís culture, product quality slipped to a new low. Recalls were almost a daily occurrence and sales were slipping.

And then the air went out of his tires, literally. Nasser became Fordís point man in the Firestone tire fiasco. It was his decision to replace the 13 million tires at Fordís expense instead of waiting for the government to step in. The terrorist attack of September 11 and the lack of support from the Ford family finally sealed Nasserís fate. He was replaced by Bill Ford Jr., in October 2001.

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