Ford CEO praises dealers' crisis control

"They showed a lot of tender loving care to customers" Ford Motor Co. CEO Jac Nasser was troubled about a company problem. Not about the Firestone fiasco. Not yet. That would come later.

Last year, a series of incidents - including an explosion that killed six workers - plagued Ford's Rouge factory complex in Dearborn, MI. It was one thing after another.

When a late-night power outage hit the plant, a Ford public relations executive got a 5:15 a.m. phone call at home. It was Mr. Nasser. The PR guy braced himself, thinking the CEO was about to vent. Turns out, it was just the opposite.

"He wanted to know what we could do about these things that kept happening," recalls the PR representative. "He seemed saddened rather than acting like an executive beating up on a subordinate. He was worried about employees at the plant. His human concern impressed me."

In retrospect, the Rouge factory problems seem dwarfed by the Firestone tire recall debacle that blew up in the face of Ford.

So, how did Mr. Nasser approach that matter as a person as well as an auto executive?

"I have trouble dividing up an executive and a human being because if they are not the same person it doesn't work," he says in an interview at Ford world headquarters in Dearborn, MI. "Not anymore."

He says the Firestone matter left him tremendously disappointed as an executive and as a person.

"I knew it was going to cause anxiety for customers. So our immediate reaction was to get the products off the road," he says of the massive recall.

Mr. Nasser finds a few positives in the calamity. He credits Ford personnel for showing character and integrity through it all. He singles out Ford dealers for their above-and-beyond efforts.

He says, "The Ford dealer body was brilliant. They are well-connected to the market and served it well.

"They virtually went person-to-person on every Explorer owner asking, `Is there anything more we can do?' It was just personal care.

"In California, dealers called up customers and said, `Come on in anyway and have a coffee even if your tires aren't recalled, and we'll check your tires for you, we'll change them, we'll wash your car.' It was a lot of tender loving care."

He's learned hard lessons from the tire recall disaster.

"You learn who your friends are and aren't. And I learned a lot more about the political process," he says, referring to his Congressional testimony. "...But I'm politically naive. I just try to run a $170 billion company."

Despite Mr. Nasser's praise of Ford dealers for their handling of the Firestone/Explorer mess, some of the automaker's 4,100 U.S. dealers members are unhappy with the company and him.

At issue are a couple of Ford dealership initiatives of late.

One is the Ford Collection, a project in which the automaker planned - in certain under-performing markets throughout the U.S. - to buy into dealerships, consolidate them and run them as a network.

Tulsa was the test market. But the project's anticipated expansion failed to materialize, largely due to dealer resistance. Many dealers saw the plan as a threat. Others just didn't want to get involved.

Says Mr. Nasser, "We felt it would get us better connected to the marketplace. We still have one in Tulsa. But it got very complicated. We were only talking about a few dealerships but it was characterized as a wholesale takeover.

"We'll continue with what's there, but it's not going to go further."

If Ford backed off on that one, the company is determined to launch its impending Blue Oval project, despite many dealers voicing objections and apprehensions with some aspects of it.

Blue Oval calls for certifying dealers whose operations meet established company customer satisfaction and quality control standards on matters ranging from customer care to building maintenance.

The rub is that certified Blue Oval dealers, as a reward, would pay 1.25% less on vehicle invoice charges from the manufacturer.

Many dealers call that unfair two-tier pricing. Seventy-six percent of responding dealers say that pricing creates an unfair advantage, according to a Listener Group Inc. survey.

"We can't believe this is legal or ethical," says Norwood Bryan, president of the North Carolina Automobile Dealers Association.

But Mr. Nasser is determined to see Blue Oval through - including the discount price incentive for qualifying dealers.

"We feel very strongly about it," he says.

He adds, "It got off to a rocky start, but it is back on track. The dealer council and a majority of dealers support it. The great dealers love it. The idea is that if you do the right thing with customers, you get more business and more profits."

So far, 1,291 Ford dealers have applied for the Blue Oval certification. Almost 1,000 have been approved.

Another of Ford's dealership projects, one which dealers have embraced, is FordDirect.com. It's an on-line vehicle shopping venture which will be 80% owned by dealers.

Mr. Nasser says the Internet offers great, but ultimately limited, marketing opportunities.

He explains, "For most people there's an emotional attachment when you buy a car or truck. It's a lot of money and you're not buying a book. There are a lot of practical and functional attributes that are difficult to evaluate if you're not really sitting in the vehicle, driving it, checking the trunk size, seeing whether you're comfortable in the driving position."

Nevertheless, he believes the Internet will help Ford and its dealers sustain a lasting relationship with customers. It will also change the way of doing business.

"It will change because customers will be able to get a lot of information. They are better prepared now when they come into a dealership. They know more about the product they are interested in as well as competitors' products."

He predicts the Internet will improve dealers' margins and eliminate waste in their systems as well as automakers'.