DETROIT – The automotive buzz is that Wolfgang Reitzle will resign as chief of Ford Motor Co.’s Premier Automotive Group (PAG) as early as today, a day after senior executives poured water on heightened speculation he wants out.

Wolfgang Reitzle

“Wolfgang has not requested any change,” Ford President and Chief Operating Officer Nick Scheele says during the auto maker’s first quarter earnings review April 17.

But reports out of Europe suggest Reitzle played hardball with Ford Chairman and CEO Bill Ford Jr. and has lost his bid to leapfrog Scheele as the No.2 man.

The rumor mill has the impatient Reitzle heading in a number of directions. Insiders in Reitzle’s native Germany say he is leaving to head up Linde AG, a Germany engineering and industrial products company. Others have him defecting to General Motors Corp. as car-czar-in-waiting when Bob Lutz retires, or heading to Volkswagen AG. There have been suggestions he’s being moved – against his will – from his U.K. office to Ford’s Dearborn headquarters for a position akin to vice chairman.

In leaving, Reitzle forfeits $5 million he would have collected by remaining with Ford through the end of 2005. Ford paid $3.3 million in 1999 to free Reitzle from his previous employment agreement with BMW AG to head Ford’s luxury vehicle divisions.

Reitzle has not responded publicly, but at Ford’s quarterly earnings teleconference, Chief Financial Officer Martin Inglis called the stories “crap.”

And Scheele dismissed the talk as stemming from internal discussions about how best to manage Lincoln-Mercury.“The issue was Lincoln-Mercury and where it reports,” Scheele said in releasing Ford’s first-quarter earnings. (see related story: Rock Road Leveling Off, Ford Believes )

To that end, Reitzle was to submit to Scheele this week a report outlining recommendations for the future of the two storied brands. The report was to focus on cycle plans and platform usage “and as an ancillary to that, where Lincoln-Mercury should report,” Scheele says. “It’s got to do with what is the appropriate place and what is the best leverage.”

Asked what he expects from Reitzle’s report, Scheele replies: “I don’t know what the recommendation will be. I’ve got meetings later on this week and then I’ll know.”

More speculation suggests responsibility for Lincoln will shift to Ford from Reitzle’s PAG. Lincoln joined Aston Martin, Jaguar, Land Rover and Volvo brands to form PAG, an alliance established by former Ford CEO Jacques Nasser, to boost the No.2 auto maker’s competitiveness in the lucrative luxury vehicle market.

Buoyed by new products such as the Jaguar X-Type and Land Rover Freelander, PAG – considered Ford’s best hope for near-term profitability – shows signs of growth. But when money-losing Lincoln is lumped in with its European contemporaries, PAG suffers financially. Mercury, which is administered by PAG but is not a premium brand, has the same effect on the umbrella organization.

Meanwhile, PAG’s European-based brands enjoy significant success in North America. But Lincoln does not reciprocate. For 2001, Ford’s annual report shows just 1% of Lincoln’s sales coming from outside North America. Britain-based Land Rover is the next-poorest PAG performer – with sales of 17.7% occurring outside its home market.

Still, Scheele and Inglis defend the Lincoln brand, citing the imminent launches of the ’03 Navigator and Town Car – both of which have been upgraded. Navigator has an entirely new chassis. Later this year, Lincoln will launch Aviator, a midsize SUV.

Regardless of whom its executives answer to, Inglis says Lincoln will “always” be a premium brand.

--with Alisa Priddle