By Tom Brown
DETROIT, July 21 (Reuters) - Nick Scheele, Ford Motor Co.'s president and chief operating officer, sees himself as a soldier in Detroit's cut-throat car wars.
"My whole career I've been in the trenches," Scheele told a small group of journalists over dinner last week, as he spoke about the massive turnaround effort he is leading at the world's No. 2 automaker.
"You've got to suck it up. You've got to be prepared to take the beating," he said.
Chairman and Chief Executive Bill Ford, 44, is officially in charge of the company his great-grandfather founded nearly 100 years ago, after ousting former CEO Jacques Nasser in October last year. But it's the affable, British-born Scheele, 58, and a veteran of more than 35 years at Ford, who hopes to guide the company back to profitability after its stunning $5.45 billion loss in 2001.
His comment about taking a beating was not meant literally. But with Ford just six months into its multiyear turnaround program, and its stock at or near a nine-year low, he knows the company faces a long hard march on the road to recovery.
He also knows he faces more than one skeptic about his ability to get it there.
"The fact of the matter is you can't do it in three months or six months," said Scheele, who argues that broad lead times mean it will take three or four years to return Ford to the days, as recently as two years ago, when it was considered one of the world's best-managed car companies.
Ford reported a $570 million second-quarter profit last Wednesday, as cost-cutting and stronger North American vehicle production helped it snap a year-long losing streak.
But Ford also warned it was planning a new round of cost cuts, which could include additional job losses, as it was missing targets for reductions in vehicle costs. As part of its restructuring, the company had already announced it was slashing about 35,000 jobs, or 10 percent of its work force.
Already derided as the downhill racer among Detroit's Big Three automakers, Ford also said it see a "small loss" in the third quarter while its main cross-town rival, General Motors Corp. , says it will make a sizable profit.
SNEAK PREVIEW
Hoping to offset some of the bad news dogging it ever since the Firestone tire fiasco erupted two years ago, Ford opened the doors of its design and scientific research centers in Dearborn, Michigan, last week to give 360 journalists and auto dealers from around the globe a look at some its future vehicles and new technologies.
The goal, as Bill Ford described it, was "to dispel the notion that the product pipeline is empty" at Ford, whose U.S. sales have dropped far below the industry average this year.
It was the first time Ford has displayed jealously-guarded, in-house models of its new cars and trucks to such a large crowd, a year or more before they actually go into production, company officials said.
Scheele ordered the preview, which is sure to lead to widespread media leaks about Ford's upcoming vehicle lineup, even though journalists were sworn to secrecy. Company sources said Scheele, dubbed "Mr. Fix-it" by some industry analysts, was fed up with reports that Ford, which has been losing key U.S. market share, is destined to become a much smaller player in the global auto industry, thanks to a lack of strong new products that will lure customers into showrooms.
"These are not pipe dreams, these are not someone's sketch pads. These are what's coming," Scheele said at the dinner with journalists. "We have some real substance behind what we've been saying," he added, referring to Ford's repeated promise that its return to profit will be led by hot new products.
TURNAROUND SPECIALIST
As the executive who turned around Ford's Jaguar unit while serving as its chairman and CEO between 1992 and 1999, and the man later credited with leading Ford's troubled European operations back into the black, Scheele is seen by many analysts as ideally suited for the much larger task he's now charged with at Ford's world headquarters in Dearborn.
"I'm a big fan of his," said John Casesa of Merrill Lynch. "I think Scheele has the right experience and the right temperament to do the job."
Scott Hill of Sanford C. Bernstein, another fan, said it remained to be seen how Ford's new products will resonate with consumers when they finally become available, however. And a recent history of quality problems and botched or delayed vehicle launches could cloud Ford's outlook going forward.
"What would be horrifying is if you have a product-led recovery and you have no capability of engineering and designing and executing a product the consumer wants to buy," Hill said.
Off the record, meanwhile, some analysts say Ford insiders question whether Scheele, whose background is mostly in purchasing and manufacturing, has the mass-market vehicle savvyand hard-charging "car guy" spirit needed for what lies ahead.
Those same analysts say David Thursfield, a rising star who currently heads Ford of Europe but is due to assume added responsibility for international operations and global purchasing next month, may soon be jockeying for position to replace Scheele.
"The sort of thing I always hear is that Nick is not tough enough and Thursfield really threatens him ... And a lot of Ford insiders say it's going to be Thursfield that's running the show," one analyst said.
Scheele denies feeling threatened by Thursfield, a fellow Briton who worked under him in Europe. But he admits the turnaround process demands full accountability and a relentless commitment to meeting established goals.
"The key thing is not to blink actually," he said over an after-dinner glass of port.