Jac Shuffles the Deck Ford's Nasser quickly moves a leaner team into place

Judging from their respective management moves of recent weeks, one might think that General Motors Corp. was sitting pretty while Ford Motor Co. was on the brink of financial ruin.

In announcing his new leadership team Ford CEO-elect Jacques A. Nasser replaced seven top executives, trimmed the number of corporate vice presidents from 45 to 40 and rolled out a new performance-based profit-sharing plan covering 50,000 salaried workers in the U.S. and Canada.

By contrast, the only pain in General Motors Corp.'s recent reorganization belongs to Lou Hughes, who now appears to be one notch below President and Chief Operating Officer G. Richard Wagoner in the handicapping of who succeeds Chairman and CEO John F. Smith Jr.

When asked whether there would be jobs eliminated deeper in the white-collar ranks or incentives offered to spur people to retire early, Mr. Wagoner said, "I don't think it is going to be broad-based. We're going to stretch people. If we have specific cases where we wind up with pockets of surplus people we will look at that."

The reality is Ford has had a great year. Through the first nine months it has earned $5.1 billion, or $16.90 per share. Its market share in the U.S. is a solid 25%, down a scant 0.2 of a percentage point from the first nine months of 1997.

There's still a customer waiting to buy every Ford Expedition and Lincoln Navigator it can crank out. The engines in its already overachieving F-series pickups have been tweaked to compete more effectively against GM's new Chevrolet Silverado and GMC Sierra. The new Lincoln LS import-fighting sedans are coming next spring. Plus, Ford is rolling out an improved and more efficiently engineered new Focus (see p.40) in Europe.

But that's not good enough.

Gone are such heavy hitters as Charles W. Szuluk, the 55-year-old former IBM executive who launched Visteon Automotive Systems, Ford's in-house components operations (see Auto Talk, p.17).

Other key players opting for early retirement include Robert H. Transou, 59, who steps down as group vice president for manufacturing, to be succeeded by 52-year-old James J. Padilla, who has been running Ford's South American operations and who was instrumental in the sweeping quality and productivity improvements at Jaguar.

Kenneth R. Dabrowski steps down as vice president of quality and process. The quality part of his portfolio has been handed off to Richard Parry-Jones, now group vice president for product development and quality. In essence, Mr. Parry-Jones takes over many of the prior duties of Mr. Nasser.

The other big winners in the Nasser lineup appear to be Peter J. Pestillo and Chief Financial Officer John Devine. Mr. Pestillo, the chief architect of Ford's cooperative relationship with the United Auto Workers union, is promoted to vice chairman and a newly created position called chief of staff. Mr. Devine, who had been seen by some as a contender for the CEO position, gains expanded responsibilities encompassing component supplier Visteon, Hertz car rental and Ford Land, the company's real estate subsidiary.

Other changes include:

n Roman J. Krygier Jr. takes over as vice president of powertrain operations, succeeding John T. Huston, who is retiring. Both are 55.

n David L. Murphy, 52, becomes vice president of human resources, succeeding Robert O. Kramer, 59, who is retiring.

n John H. Rintamaki takes over as vice president and general counsel from retiring John W. Martin Jr., 62.

n Vaughn Koshkarian, most recently chairman and chief executive officer of Ford Motor (China) Ltd., succeeds 58-year-old David Scott as vice president of public affairs. Mr. Scott steps down at the end of the year after 31 years at Ford.

n Mei Wei Cheng, now president of Ford's China operations, will succeed Mr. Koshkarian.

In short, Mr. Nasser will lead a leaner and younger team. In some cases those retiring may be leaving earlier than they planned, but all are eligible for comfortable pensions and presumably have exercised some of their stock options.

Many executives preach about guarding against complacency. Mr. Nasser guarantees that the status quo will be constantly challenged, even when the company succeeds on all the conventional measurements.

This dictum, combined with the buyout program for mid-level salaried employees announced this past summer, amplifies the insecurity within the company, but it tends to keep people prepared for change and less threatened by pressures of the marketplace.

"This shouldn't be a surprise," says David Healy, auto analyst with Burnham Investment Research. "Heads rolled in Europe when Jac took over there. Then when he came to the U.S. to get Ford 2000 back on track, he put his own guy, Jim Donaldson, in charge of Ford of Europe. I'm sure he's liked a lot better by shareholders than by employees, but his style is extremely effective."

Ford could have handled the broader buyout offer more diplomatically. Instead, internal memos leaked out about how the offer would target underachieving workers or those identified as having limited opportunities for advancement.

But at least there is a degree of consistency here. If those in the trenches are expected to do more work with fewer people, it helps recruit true believers if they see folks on the fast-track, who made vice president before they were 50, leaving in the prime of their working lives.

Among both fans and skeptics of the Nasser approach there's little doubt that a sense of urgency is pulsing through the world's second largest automaker.

Don't think the UAW doesn't take note.

When there's change at the top, it is easier to sell sacrifice down through the ranks. This is not a great big happy family. But it is a global automaker well positioned for the 21st century.