Info Leaks at Internet Speeds And nobody wants to feel they can't be trusted

This summer saw the development of an issue that will come to haunt the auto industry. Indeed, it will pose a challenge to all kinds of corporations, to every government around the globe, and even to we the people.

What I'm getting at here is the appearance of a web site called blueovalnews.com that was started two years ago by a 32-year-old nursing student named Robert Lane. As a card-carrying gearhead, Mr. Lane started his web site as a tribute to Henry Ford, a man he admires; the Ford Motor Co., which he adores; and to its many fine products, particularly the Mustang, of which he owns four.

Earlier this year, someone inside Ford sent him some sensitive documents showing that the company was having problems with the Mustang Cobra. These papers showed that in many cases the engine wasn't producing the power that Ford claimed, that it wasn't as fast as advertised and that it had a driveline vibration to boot.

So Mr. Lane started posting these documents on his web site. Ultimately it led to a recall, but it also led a number of other employees to start sending Mr. Lane reams of other internal documents.

Before long he had the company's complete product plans through 2005, its complete powertrain plans through 2010, pictures of future products, internal memos to vice presidents of the company, and much, much more.

Needless to say, Ford hit the roof. But it sensibly approached the situation very delicately. After all, the First Amendment to the Constitution of the United States protects freedom of speech, and Ford had to tread lightly between getting this information yanked off the Internet and not trampling on Mr. Lane's rights.

At first, it tried to persuade him to not post this information. That didn't work. Then it offered to buy him out. But Mr. Lane proved to be a tenacious believer in his right to publish this information. So the company obtained a restraining order that temporarily forced Mr. Lane to remove copies of all internal documents. And then it moved to obtain an injunction to permanently prevent him from posting that material.

U.S. District Court Judge Nancy Edmunds ruled in early September that the First Amendment took precedent here and said Mr. Lane can continue to maintain his web site. But the issue still has the potential of going all the way to the Supreme Court. And it raises a host of problems that will reverberate through the industry for a long time to come.

Not only does Ford have to worry about this information falling into the hands of its competitors, which I'm sure they already have, it has to worry even more about how this information got out in the first place. Is it the work of just a few malcontents? Or is it the reflection of dissatisfaction deep inside the company over President Jac Nasser's policies, including forced early retirements and performance reviews that identify which employees have no chance for advancement?

Unfortunately for Ford, this doesn't seem to be the work of a few malcontents. The discontent obviously runs through many different departments. Robert Lane even got an anonymous phone call from someone in Ford's legal department a week before the company obtained its restraining order, warning him this was about to happen.

The real damage to Ford is that it is going to have to control internal information much more carefully now. But any efforts to do so are going to instantly breed resentment and mistrust among employees, especially those who are innocent. Nobody wants to be made to feel as if they can't be trusted. Worse still, information controls will stifle ideas and knowledge, and ultimately lead to slow-downs in new product programs.

Ford's competitors may be laughing about its predicament, but they won't be laughing long. This could happen to any of them tomorrow. You think it's easy to keep secrets secret? Look at how easily America's most sensitive designs for nuclear warheads were whisked out of the national laboratories.

Ever since the advent of e-mail and the world wide web, companies have worried about how readily inside information could be sent outside.

This isn't exactly an example of that. The overwhelming amount of information that Robert Lane received came in unmarked envelopes through the postal service. The difference in this case is that he posted that information on his web site. From a publisher's standpoint, that's the beauty of the web: There's no constraint on space. You can publish as much as you want, which is a luxury that mainstream media, such as newspapers and magazines, can't afford. They simply don't have the room for it.

And while they may have put it on their own web sites, it's obvious they were never getting this kind of information, or at least not in the quantity that Mr. Lane did.

Will Ford suffer from this? You bet. Maybe its competitors can't change their short-term product plans to counter Ford. But they certainly can use this information to prepare better. Just look at how Volkswagen's sagging fortunes and General Motors' enviable profitability in Europe flip-flopped - almost to the day that Inaki Lopez and his cronies showed up in Wolfsburg with boxes of internal GM documents. o

- John McElroy is editorial director of Blue Sky Productions, producer of "Autoline Detroit" and "The Nightly Auto Report" for WTVS-Channel 56, Detroit