BUSINESSWEEK ONLINE : OCTOBER 11, 1999 ISSUE
COVER STORY

Jac Nasser: 'In the Past, We Tried to Do Too Much'


How -- and why -- would you change the world's most profitable carmaker? To find out what's behind the changes being plotted by Ford Chief Executive Jacques A. Nasser, Business Week Detroit Bureau Chief Katie Kerwin sat down with him a few weeks ago. They talked about his efforts to shake up the world's second-largest car company. Here are edited excerpts of their conversation:

Q: Ford is the world's most profitable auto maker, what's the urgency to remake it?
A:
It's a world going through tremendous change, not just through economic events, but largely through technology. We're trying not to be left behind.

Q: How do you change a company as big as Ford?
A:
You start with a vision to be the world's leading consumer company for automotive services and products. Then you let your teams have room to work, and give them air cover. I'm not a believer in telling people [exactly] what to do. If you start giving people a cookbook, you start to get very narrow solutions.

Q: You've been hiring a lot of outside talent lately. What's your long-term goal for the ratio of insiders to outsiders?
A:
We're heading toward an 80-20 mix. We are spending more time and effort developing leaders from inside the company. And this is an opportunity to learn from somebody who comes from a different environment.

We're trying to strengthen the team. Like any sports team, if you stop recruiting, over time, you'd lose your competitiveness. If you look at the team we've got today, there's a tremendous mix of different backgrounds, even among the people who came up through Ford Motor Co.

Q: You've gotten some advice about changing Ford from General Electric Chairman Jack Welch and his advisers. Do you want to make Ford more like GE?
A:
We're a very different company than a conglomerate like GE. Autos are a very heavily integrated business, so I don't think we could go to a GE-type model. Our traditional, core auto business will always be the largest part of our company... But we are heading toward more accountable business enterprises -- even if they are more like virtual businesses. We're on our own course, which we think is right for us.

Q: How does your background, working for regional Ford units around the world for most of your career, shape your view of what Ford ought to be?
A:
I've been with the company over 30 years. Yet because of the way I was brought up in the company, operating in smaller units, it's not really that different from the way Jack Welch does things. It allowed me to come in with 30 years of experience, but with the fresh eyes of a newcomer.

Q: In trying to make Ford more of a "teaching culture," you started out by training employees in business basics. You said you found many managers didn't know what a p-e ratio was?
A:
Yes. But I don't blame them. Because we are such a large company, many of our people were brilliant in their functional areas, but we really didn't proactively involve them in the total business. Business acumen is such an important element of our business. Our purpose was to give everyone a grounding.

Q: Ford is making buckets of money selling trucks in the U.S. But the car business is another story. Are you worried?
A:
Sure. We'd like to be strong everywhere. But if you had to choose, you'd like to be strong in the strongest part of the market. So being strong in the SUV and truck market is fine with me.

Q: How will you make some of your less successful cars more popular and profitable?
A:
In the past, we tried to do too much in the car business, and dispersed our resources. Now we're simplifying the product line. And we're separating the models that remain, and giving them better brand identities.

Q: After your earlier work within Ford, cutting costs and reducing payrolls, people started calling you "Jac the Knife"? How does that nickname sit now?
A:
You kind of grimace at some of the comments that are made. These days, you'd better be a car guy, a global guy, a finance guy, a cost-cutter, and an agent of change. You really have to be all of the above. Any single thing is doomed to failure. You also need to be able to change with the times.



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