Jacques Nasser turns 51 this month and, barring unforeseen events, he'll spend the next 14 years leading what's now the world's second-largest automaker, but could well become the largest before he is finished.

A major merger could hasten that day, of course, and Mr. Nasser agrees that the $22.9 billion Ford has amassed provides "quite a lot of flexibility and leaves our options open."

That cash, largest of any automaker, could be used "to be more aggressive in our organic (internal) growth and clearly it could be there for the right acquisition," he says. It also could be used to boost dividends, as Ford did in the third quarter, or for buybacks to raise the value of its stock. "At this point you'd be speculating as to the potential uses for it," he shrugs.

The 30-year Ford veteran, until now the second-highest ranking executive as president of Ford Automotive Operations, now takes over as corporate president and chief executive officer in a new team headed by William Clay Ford Jr., 41, who moves up to nonexecutive chairman.

Although Mr. Ford will continue to chair the powerful finance committee and represent the Ford family's 40% control of the company his great-grandfather started, Mr. Nasser will run day-to-day operations. Mr. Ford's strong views on the environment are well known, but Mr. Nasser says the company already is out front in addressing those issues (see Q&A p.44).

Born in Lebanon and raised in Australia, Mr. Nasser is widely respected both inside and outside Ford. He brings broad international experience to the job (Asia/Pacific, South America, Europe) and a penchant for products that belie his financial upbringing (see WAW cover story-Feb.'97, p.27).

He also has a reputation for being tough on costs, and long has lived with the moniker "Jac the Knife." He's clearly not comfortable with that, arguing that in a tough global environment cost vigilance is simply the price of admission.

Mr. Nasser takes over while Ford is riding high. Besides the big cash stash, its Ford 2000 gloablization plan, after considerable tweaking, is beginning to pay dividends. Jaguar Cars Ltd., acquired in 1989, has mounted a substantial turnaround and reportedly is operating in the black after a total investment of some $5 billion. Mazda Motors Corp., in which Ford owns a 33% interest and over which it has effective control, also has crept back to profitability despite Japan's financial woes.

Moreover, Ford ranks among the world's lowest-cost automakers, and a string of new, high-profit product successes has fattened both its coffers and market share in key markets.

Still, there are some clouds in its crystal ball - most shared with other automakers as well - such as plummeting sales in Brazil and continuing reverberations of the Asian economic meltdown.

He also has two recent events to think about: The DaimlerChrysler merger and General Motors Corp.'s decision to combine its North American and International Operations into a single global entity.

Mr. Nasser says both moves reflect "powerful commercial and industrial logic and in concept are very much like what we embarked on five years ago (the Ford 2000 globalization scheme). So we're a touch ahead of them, but I applaud their efforts."

Ford is rumored to be pursuing tieups with numerous other automakers and suppliers. BMW AG and Fiat SpA are mentioned frequently. Ford also discussed a deal with Daimler-Benz AG in the summer of 1997 before D-B got serious with Chrysler. Mr. Nasser won't discuss that, but a D-B executive says negotiations broke down when Ford insisted on a takeover rather than merger.

Ford bid to acquire Korea's bankrupt Kia Motors Corp., in which it and Mazda combined own 16.9% control, but lost out to Hyundai Motor Co. Ltd.. in October. Kia's debt was too large for Ford's taste. Still, "there may be some commercial transactions we will continue to do with the new company," says Mr. Nasser. How Ford's stake will wind up depends upon how Hyundai/Kia is restructured, he says.

Looking into 1999 back in his home market, Mr. Nasser remains fairly bullish.

"We don't see any real signs of a recession (in the U.S.) next year," but a slight fall-off is possible. "If I had to peg a forecast, 15 million (U.S. car and trucks) is about what we think," he adds.

If so, that would be the sixth straight year above the 15-million mark - no big gain, but a healthy level by any measure, especially compared with other world markets.

This year U.S. sales are expected to reach 15.5 million, which Mr. Nasser attributes to "strong performance" in recent months triggered by sales incentives and GM's push to recapture market share after a 54-day strike last summer.

Because of intense competition, automa-kers also basically held the line on

1999-model prices. "If you looked at the total industry, including incentives and promotions," prices are "probably flat to somewhat negative," he says, creating a powerful lure to Americans who continue to enjoy a high level of prosperity.

Things aren't nearly that rosy elsewhere, but Mr. Nasser says the company continues to reap benefits from Ford 2000.

Although it began as a total global program, Ford since has massaged the strategy by giving more autonomy to regional operations. "When we first embarked on the globalization program it was very clear that we would have to make changes as we went along," he says. "One of the key elements was that change would become easier because we weren't divided up into small functional responsibilities. We could take a global view and make quicker decisions, and we have. That would probably be true whether we had a Ford 2000 program or not."

Ford stuttered in Europe at the outset of Ford 2000. Mr. Nasser headed Ford of Europe in 1995, but in 1996 was promoted to executive vice president in charge of product development based in Dearborn.

He stayed on his new job but also took charge again in Europe, spending considerable time there getting the big operation back on track. One major decision: rebuilding a local management structure.

"It's a tough market, but we'll do pretty well over there this year," he says.

But will Europe make money? "I think so. They're on course" and "should come pretty close," he says.

Ford lost momentum in Europe during the recent changeover from the phased-out Escort to the new Focus, now in full production, "so they'll have a strong fourth quarter," says Mr. Nasser.

Cost-cutting, of course, also has helped. But he says revamping "strategic functions" such as reducing worldwide vehicle centers from five at the outset of Ford 2000 to three also has boosted efficiency.

Thanks largely to his efforts Ford trimmed $1.9 billion from costs through the first 10 months of 1998. He offers no estimate of total yearly savings nor a target for 1999. "When you look at milestones (set for 1998) it's interesting that people focus on cost reductions because we wouldn't be where we are if we only did cost reductions," he emphasizes. "A simplistic view of the business is just taking a view on cost. We don't do that. I don't do that. I probably spend less time on cost and productivity than I do on what we do to get the business healthy and how to grow the business. Where do we get improved customer satisfaction and revenue?

"The cost side is necessary because that's what customers are asking for. If we think we are under the hammer on cost and efficiency, look what's happened to the price and cost of products such as white goods and computers? We are in the kindergarten stage of cost efficiency."

Suppliers privately grumble that Ford is too tough on them, but Mr. Nasser obviously doesn't buy that. "I think it's simple. What's driving the business, I think, is a perfectly reasonable request from the marketplace. Customers want even better products at lower prices or value," and Ford intends to deliver on that without eroding shareholder values. "If there are elements in the supply base that feel uncomfortable with that, then fine; they have a decision to make.

"In the end we're just kidding each other. If they think the difference is how tough we are, they just don't get it, It isn't us; it's the marketplace," he says.

Although Ford 2000 originally had a target for a specific reduction in global platforms, Mr. Nasser says emphasis has shifted to a strategy of "really getting the economies of scale on volume platforms." The F-Series light trucks already are over 1 million units annually. The new Focus may be; the European Fiesta and Ranger/Explorer are close to that; and several platforms are running at 500,000 a year, he says.

"That's what really drives efficiency and productivity and costs and, importantly our ability to get products to the market faster." Over the past three years, he adds, "our product development efficiency has improved by somewhere between 40% and 50%."

Ford has "demonstrated we can do programs in 18 months," Mr. Nasser says, adding that developing and launching "a broad range of new models" more efficiently is where the big payoff comes.

Until now Mr. Nasser and his top lieutenants have worked together at the Ford Product Development Center, close to the action. Now his entire, larger team will be ensconced on the 12th floor of the nearby Ford World Headquarters "to facilitate teamwork," he says.

As part of the top-level realignment, triggered by Chairman Alex Trotman's decision to retire a year ahead of schedule, numerous Ford executives are exiting at year's end.

"I think that caused a lot of people to sit down and say, `There's going to be a new team in place. Am I prepared to commit to another five years?' And some people were, and some weren't," he explains.

Is his team now in place? "There will always be normal and natural turnover," is Mr. Nasser's simple reply.

Yes.