June 4, 2001

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Ford's Board Weighs Plans To Shuffle Top Management

Staff Reporters of T HE WALL STREET J OURNAL

Ford Motor Co.'s board, amid concerns about product quality and the continuing Firestone tire controversy, is weighing plans to restructure top management and possibly give a new, senior role to a key executive behind the company's European turnaround.

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Top management changes have been in the cards for some time at Ford, as certain important executives under Chief Executive Jacques Nasser near retirement age. But now, company Chairman William Clay Ford, Jr. and other directors are looking at management changes against the backdrop of a year in which Ford fell behind its key rivals on quality and took hits to its corporate reputation from the Firestone scandal, according to some people familiar with the situation. Ford directors last fall disclosed that they are conducting their own review of management's handling of the tire crisis, as is common when companies are under fire.

A Ford spokesman Saturday dismissed as "wild speculation" various management scenarios circulating in Detroit and on Wall Street, and denied that quality concerns or the tire situation are factors in potential management shifts.

Plans to reshuffle the company's senior management were reported by the New York Times over the weekend.

It isn't clear how soon changes would come or how deep they would go. Some people familiar with the situation expect any move would wait until after Congressional hearings later this month on Ford's decision last month to recall 13 million additional Firestone Wilderness AT tires used on Ford Explorer sport utility vehicles and other models. Ford says the tires are potentially unsafe, though not as bad as the 6.5 million tires recalled last year. Bridgestone Corp.'s Bridgestone/Firestone Inc. Chief Executive John Lampe has retaliated with charges that Ford is trying to dodge serious safety concerns about the Explorer.

Any major leadership changes at Ford would be scrutinized by Wall Street for their impact on Mr. Nasser and the power-sharing arrangement he has with Mr. Ford, who as nonexecutive chairman represents the Ford family's controlling 40% voting interest in the company. Mr. Ford last month publicly supported Mr. Nasser's handling of the Firestone situation. And Mr. Ford in February said he had no interest in taking over Mr. Nasser's executive duties.

Mr. Nasser has run Ford without a chief operating officer, preferring a flatter structure in which the heads of about 15 major business units and key staff areas report directly to him. Mr. Nasser still doesn't favor inserting a chief operating officer between himself and operating executives, company insiders said.

One plan under consideration would move Ford of Europe Chairman Nick Scheele to company headquarters in Dearborn, Mich., to strengthen the organization under Mr. Nasser, people familiar with the situation said.

Mr. Scheele, 57 years old, led a major turnaround at Ford's Jaguar luxury car unit between 1992 and 1999, doubling sales and overseeing a strategy that boosted the brand's quality from among the industry's worst to one of the best, according to recent J.D. Power & Associates' surveys of new-vehicle quality. Since January 2000, Mr. Scheele and Ford of Europe President David Thursfield have led a push to stanch losses at the company's main European unit and have successfully launched key new models that are helping Ford regain market share in Europe.

Write to Joseph B. White at joseph.white@wsj.com and Norihiko Shirouzu at norihiko.shirouzu@wsj.com