Ford Inside News banner

WSJ: Ford Friction Led to Leclair's Exit

5K views 14 replies 9 participants last post by  theoldwizard1 
#1 ·
The Wall Street Journal

Ford Friction Led to Leclair's Exit
Finance Chief's Departure Said to Reveal Tensions in Auto Maker's Management

By MATTHEW DOLAN

The unexpected retirement of Ford Motor Co.'s chief financial officer last week came after increasing friction between him and other senior executives, people familiar with the matter said.

Top executives at Ford in recent weeks spoke with Chief Executive Alan Mulally and Chairman William C. Ford Jr. about their dissatisfaction with CFO Don Leclair, these people said. The working relationship had frayed so much that at least two high-level company officials talked openly about whether they could continue to working with Mr. Leclair serving as CFO, they said.

The strained relations between Mr. Leclair and other members of the Ford's senior management team centered on whether Mr. Leclair had been too forceful in pursuing his own agenda without informing other vice presidents in a timely way of his plans, according to people familiar with the matter.

Company spokesman Mark Truby declined to comment Sunday on Mr. Leclair's exit, saying that Mr. Mulally addressed the overall issue Friday. At that time, Mr. Mulally praised Mr. Leclair's tenure, saying in a statement that "Don's expertise and business acumen have been invaluable to Ford."

In a follow-up interview Friday, Mr. Mulally didn't talk about any tension within his executive ranks and said Mr. Leclair's departure was not linked to a difference over the future direction of Ford.

Mr. Leclair released a brief statement Friday, saying that "I have appreciated my time at Ford and now look forward to spending more time with my family and pursuing other interests." He recently re-married and is awaiting the birth of his first grandchild. Through a company spokesman, Mr. Leclair declined an interview request Sunday.

Mr. Leclair's departure was announced Friday as U.S. auto companies scrambled to address historic drops in their stock value and questions about whether they have enough cash to carry them through the economic downturn. Ford's stock closed at $1.99 on Friday. A year ago the stock was trading for $8.23.

Mr. Leclair's retirement caught off guard many who follow Ford. Only days before the announcement, he met with financial analysts at the Paris auto show.

Ford is also about to report its third-quarter earnings, and is expected to announce a substantial loss. The company posted a loss of $8.7 billion for the second quarter.

Seen by supporters as a strong advocate to protect his company's bottom line, Mr. Leclair was credited with engineering a 2006 financing deal that has left Ford with a significantly larger cash cushion than either of its Detroit rivals at a time when all three Detroit auto makers are losing money and using up billions of dollars in cash each quarter.

Nevertheless, Mr. Leclair was seen as distant and rigid, working apart from others on the management team, people familiar with the matter said. He also did not have the strong support of the Ford family, whose members continue to control the auto maker through a separate class of stock, they said.

Ford family members were also displeased earlier this year when they learned that billionaire investor Kirk Kerkorian had quietly accumulated a 4.7% stake in the company.

Mr. Kerkorian began buying Ford shares after his adviser, Jerome B. York, had discussions with Messrs. Mulally and Leclair. Mr. Kerkorian later increased his stake to 6.43%.

for more CLICK HERE
 
See less See more
#3 ·
Mulally seems to be dismantling the old boy network that crippled Jacques Nasser tenure as CEO, so much so that Bill had to step in, and almost ruined Ford.
Jacques Nasser crippled his own tenure and in the process damaged Ford, long term. Bill, sadly didn't do any better, but was wise enough to acknowledge his limitations and look for external help. Also his decision in hiring Mullaly was a 5 stars one.
There is a culture of old cronyism at Fords senior level that seems to attempt to go behind established order of things.
Don't you mean the White House?
 
#5 ·
Mulally seems to be dismantling the old boy network that crippled Jacques Nasser tenure as CEO, so much so that Bill had to step in, and almost ruined Ford.
There is a culture of old cronyism at Fords senior level that seems to attempt to go behind established order of things.

tho no one asked, here's my non-insider take on this - for what it's worth
(chronologically)

Jacques Nasser's tenure as CEO was before I followed the industry very closely at all
but I've read a lot of hearsay - mainly negative - which I choose to re-interpret:
imho Mr. Nasser was primarily a mis-match with 'historic' themes/goals at Ford
leading to the 'head' moving one way and the 'body' of the corporation going the other...
no Team was formed & <that almost DID ruin Ford.
Imho the general economy at the time is what kept the situation from being a true disaster.


The old boy network nearly crippled BILL FORD's tenure as CEO
....IN SOME REGARDS
BUT
- he did get CAR programs started
- got the quality scores heading up
- started the incredibly-timely loan/mortgage/funding package (with Mark Fields afaik)
.....that was completed very shortly after Mr. M. arrived at Ford
- & of course he GOT Mr. M.!!!!
so 'Uncle Bill' (as I call him with respect and affection) came nowhere near (IMHO) ruining the company


Mr. Mulally is by ALL accounts definitely dismantling the old boy
network** with a new streamlined "organized-ation"
AND building an amazingly cohesive Team, one of the hardest mgmt. jobs there is imho

** (imho the culture of old cronyism at Ford's senior level that used to go AROUND established order of things like Org Charts;
came about naturally from the disjointed regional fiefdoms - that were the way-things-got-done way back when)


I might be all wet but ^those are my conclusions
 
#6 ·
I think this is one of the things why Leclair decided to go

Mr Mulally has changed Ford by combining an affable demeanour with, when necessary, a quiet ruthlessness towards those who get in his way. One of his most effective tools, which he brought from Boeing - is a 2½-hour business plan review meeting, held each Thursday. Senior executives are required to attend, in person or remotely, and to report on key business objectives. Their progress is tracked by red, yellow or green squares on as many as 300 slides.

Mr Mulally has used these meetings to break down Ford's notorious regional and personal fiefdoms. He has encouraged managers, previously loath to pass on bad news, to acknowledge problems. But woe betide anyone who talks during a presentation, tries to score points or makes a joke at a colleague's expense. "I just stop the meeting and we all turn around and look at the person who's talking," Mr Mulally says. "And pretty soon they crawl under the table, or they crawl out of the room, or they leave the company."Displaying the tough streak behind his boyish smile, Mr Mulally adds: "I've even had to facilitate that by removing a few vice-presidents over the years for that one reason alone. They just did not respect the process or pay attention or respect each other."
continue at the link
 
#14 ·
^^there is cutting and there is cutting - and I think at least for now and from the outside - Mulally's cutting makes sense - e.g. one global portfolio of models.

Igor
The customers will decide if "global cars" make sense. I hope they do, because it is the company's last chance.

As for "global engineering", from what I hear, it is Europe's chance to put Dearborn "under the thumb". Decision are being made based simply on the basis of "well that's the way we do it in England", not necessarily what is the best/most cost effective way to do business, globally.
 
#15 ·
Nassar seems to get all of the blame, but he was just taking Ford 2000, which was started by Alex Trottman, to its next logical step.

Nassar biggest flaw was to convince most of the salaried employees that they need to "move up" every 2 to 3 years. If you couldn't make it to the "next rung", you were pretty much useless and should be "culled from the flock". The back stabbing and ladder climbing was intense. Many people made management just because the could make and or give good presentation, not because they really new anything because 2 years was not nearly enough time to learn all of the nuances of the job.

If you had all of the engineering organization charts from pre-Ford 2000 until just before the "global engineering" initiative , you will see that the company had come full circle back to where they started from.
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top