Automotive Insight: Jac Be Nimble, Jac Be Quick

Ever since Jac Nasser barn-stormed into the driver's seat at Ford Motor Co., he's been all action. He tore into the organization, cutting headcount, tossing out deadwood and yanking layers of bureaucracy. He re-jiggered the Ford 2000 organization, promoted non-Americans to positions of prominence, and brought in new faces from outside the industry. He also proved he knows what he's doing, providing the company with quarterly improvements every single quarter.

But that's just for starters. Mr. Nasser is not interested in seeing the company make nice and steady quarterly improvements. He wants to transform Ford into an automotive consumer services company that makes much better margins than any manufacturer of cars and components could ever hope to earn.

First off, Mr. Nasser has got some radical plans for the traditional manufacturing end of the business. He's pushing the outsourcing envelope further than other automakers dare try. In Europe, Ford is starting to let suppliers do the calibration work on its engines - something that would have been considered heresy just a few years ago. In the U.S., he's turning some of its manufacturing operations over to suppliers. Last year, he gave the company's transmission plant in Batavia, OH, to ZF, the German supplier. In the long run, I'm betting that Ford gets out of manufacturing altogether.

But he's not just revamping the old order. Under Mr. Nasser, Ford is experimenting with new business ventures. He bought Qwik Fit to stick his toe in the water and see if he likes the automotive repair business. He bought junk yards to test out the profit potential of the recycling business. He allied Ford with Microsoft, Priceline.com and Bolt.com to help figure out how online buying works.

Will these ventures succeed? Some will, some won't. That's the positive side of his operating style. He's willing to accept the fact that some ventures will fail, in the belief that the successes will far outshine the losers.

But I'm also beginning to wonder if Mr. Nasser is starting to push too hard. Like most automakers, Ford is a company under tremendous pressure. It no longer has redundant layers of management and extra personnel who can pitch in to help a project get done well and on time. Many of its young project managers are stressed to the max.

Moreover, Ford is trying to digest the acquisition of Volvo Car at the same time it creates a completely new business unit, the Premier Automotive Group. The PAG is headed by Wolfgang Reitzle, who has ordered crash programs to re-do the interior of the S-Type Jaguar and beat BMW to the market with all-new aluminum engines. Good stuff. Except that the uncertainties of operating under a new reporting system, all the international travel it entails, and ripping up work that's already done is a recipe for burning out your best people.

This has always been a tough business, but now the pellmell rush to be first is starting to take on a manic quality. At the Specialty Equipment Manufacturers Assn. show in November Ford got wind that General Motors Corp. was about to announce an e-purchasing program, where suppliers will be able to bid and sell parts to GM on-line. There was no way Mr. Nasser was going to let GM President Rick Wagoner beat him to the punch. He went into hyper-drive and announced Ford's foray into e-purchasing in a venture with Oracle at a hastily arranged announcement.

It was weird. In the middle of a Ford press conference to unveil some customized trucks, Mr. Nasser ordered the media to the press room for "an important announcement." Forgetting all about the trucks, we rushed out, wondering what could be so important as to interrupt one press conference with another.

We raced to a bare-bones press room where a telephone sat on a plain table. In a moment, the room was jam-packed and the press conference was under way. Reporters from around the country were patched in on a conference call. In a flash, the president of Oracle was on the speakerphone, calling in from California. He and Mr. Nasser announced that Ford and Oracle were taking the plunge into a business-to-business e-commerce venture, and spoke glowingly of the benefits to both companies. And then, while the president of Oracle was yammering on about the details, Mr. Nasser stood up and walked out of the press conference. I guess he had more important things to do. Most reporters there took that as their cue and walked out, too, while the voice of the Oracle man on the speakerphone echoed on in a near empty room. I've never seen anything like it.

Never mind that Oracle has never handled online business-to-business auctions before, or that Ford will be at least six months behind GM in its e-commerce venture. The goal was simply to make an announcement before GM did.

I love watching corporate executives who want to move the needle, rather than be content to sit back and manage the business. But the danger of always trying to be first is that you may rush into a business deal before all the ramifications are fully figured out. Mr. Nasser could use a smidgen of caution in his headlong rush to be first. In combat, the point man is usually the first to get shot.