By Justin Hyde
DETROIT, April 21 (Reuters) - Wanted: chief financial officer for one of the world's largest companies. Experience in global cost cutting and the occasional financial crisis a must.
That's the message Ford Motor Co. has been sending for some months now as it searches for a successor to CFO Allan Gilmour, 68, a Ford veteran who came out of retirement last May to help speed the No. 2 automaker's turnaround.
Gilmour has said while he has no plans to leave, Ford should find his successor. That's a tall order for what may be one of the hardest CFO jobs in the world, with five executives holding the title over the past four years.
Ford must shop in a seller's market. Quality CFOs are in demand at a time investors are scrutinizing every financial statement and new regulations such as the Sarbanes-Oxley law make CFOs personally liable for mistakes in company results.
"The CFO position is a lot riskier than it used to be," said Lee Shull, a managing director of Resources Connection, a financial executive firm. "There are a lot of great companies with great internal controls and procedures, but you can't be everywhere and possibly know everything."
The company has declined to comment on its search for Gilmour's successor. An executive search firm has been seeking candidates for the past few months, and insiders say it is possible Ford might actually hire a finance chief from outside the company since Henry Ford II brought in the famed "Whiz Kids" in the 1940s.
It's rare for any automaker to bring in a CFO from outside the industry because of the scale and complexities of the job. Ford has 335,000 employees worldwide and sells 7 million cars a year from Antigua to Zimbabwe. Ford Motor Credit, Ford's vehicle lending arm, has some $150 billion in debt outstanding and would rank as one of the 10 largest U.S. banks.
HIGH TURNOVER
Ford has had five CFOs in the past four years, starting with the departure of John Devine in 1999. The dream CFO candidate would have deep experience at the top of the industry and at Ford. Unfortunately, that describes Devine, who joined rival General Motors Corp. as CFO in 2001 and has helped GM win new respect on Wall Street.
"It would be preferable if they have someone with real savvy within the auto industry, but that may not be possible," said David Cole, director of the Center for Automotive Research and a long-time industry observer. "It was a good move to bring Allan Gilmour back, but by definition he's a short termer."
The final decision rests with Ford Chairman and Chief Executive Bill Ford Jr., who convinced Gilmour to come out of retirement. Ford said earlier this year he wanted Gilmour to stay on as long as possible, that Gilmour brought a historical perspective that had been missing from top management.
But even the best CFO in the world would not likely dispel Wall Street's deep skepticism about the auto industry. Ford itself says the industry has 3 million to 4 million units of excess capacity in North America, which is pushing down prices. Both GM and Ford are facing tens of billions of dollars in pension costs and future health-care liabilities.
And thanks to the cyclical nature of the industry, every several years bring some sort of financial crisis. In Detroit, it's known as being "in the barrel." Ford Chief Operating Officer Nick Scheele said last week the company was still there, even after surprisingly strong first-quarter earnings.
"Detroit has got to have someone in the barrel," Scheele said during an interview at the New York auto show. "It wouldn't be Detroit if there wasn't somebody there, and you can't get out of the barrel until someone dives in."