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\'He jumped because he was fed up \' \"Leach\"

Leach departure at Ford extends management turmoil
'He jumped because he was fed up'

Automotive News Europe / August 25, 2003

Martin Leach was a Ford man through and through.

He has worked for Ford almost his entire working life, rotated through a series of important assignments and embodied the "driving dynamics" that Ford had made a core brand value in Europe.

The defection of such a talented, dedicated executive during a critical restructuring is not a good sign for Ford of Europe. Until August, European operations had been held up as a model for Ford's global recovery. Analysts were stunned when Ford Motor Co. reported earlier this month that its European operations lost $525 million (E477 million) in the second quarter.

Leach, 46, was a victim of Ford's larger problems in North America. Ford's shortage of experienced leaders led to high-level appointments for some young executives.

Leach is one of the industry's most respected product men. But he may not have been ready to lead the complex Ford of Europe.

He had grown up in product development and marketing at Ford and had led Mazda's product team. He lacked experience in finance, manufacturing and purchasing and could have used more seasoning in those areas if Ford had not been so desperate for top talent.

When Leach was given the top job at Ford of Europe's Cologne headquarters, he was substantially less experienced and much younger than his predecessors, David Thursfield, now 57, and Nick Scheele, now 59.

Leach had many of the credentials for the top job but his rise was accelerated primarily by developments across the Atlantic.

Nasser's departure

When Ford Chairman William Clay Ford Jr. ousted flamboyant CEO Jacques Nasser in October 2001, Ford senior executives looked around their global organization and identified the congenial Scheele as the best person to serve as an experienced chief operating officer for the new and also inexperienced CEO Bill Ford.

Scheele had been chairman of Ford of Europe for 18 months in 2000-2001 and had been transferred to Dearborn as a troubleshooter during Nasser's final turbulent months at Ford.

Scheele and Thursfield, his top lieutenant, had been architects of Ford's European turnaround strategy, launched in 2000.

The plan looked great on paper: Ford closed several inefficient plants, including its huge Dagenham, England, assembly plant; launched an aggressive new product strategy scheduling 45 new or heavily revised products in five years; and devised a cost-cutting plan aimed at making suppliers partners rather than adversaries.

But the plan had barely been put in place when Scheele and Thursfield were called to Dearborn to turn around Ford's troubled North American operations.

Thursfield retained the Ford of Europe chairmanship, but had two other time-consuming jobs: head of global purchasing and international operations. That left Martin Leach in charge of a turnaround that was far from complete in a market getting more difficult by the moment.

"He jumped because he was fed up with being ridden too hard," said a Ford insider. "I think he left out of exasperation for being the fall guy. Scheele and Thursfield were taking credit for things that hadn't been institutionalized yet."

Ford officials say the European recovery plan is still on track and that cost-cutting is beginning to show results. Ford has taken $1.3 billion out of its European cost base in the last three years using a combination of factory closings, greater purchasing efficiency and flexible plants.

"This year, the pace of cost reduction has accelerated," said a Ford executive. "What makes this so complicated is it really has to happen on both sides, cost and revenue."

Downward pressure on prices combines with relatively high costs to put the heat on Ford executives.

"We need to get the volume to support the cost structure," he said.

Ford brand image

Analysts say the Ford brand has not caught up with the strength of its vehicles. The brand isn't strong enough to get consistent prices in Europe's heavily discounted market.

Ford's brand is inconsistent from country to country in Europe. That is matched by a lack of continuity in the executive suites. Ford officials look with envy at the success of PSA/Peugeot-Citroen, which sells small cars in Europe at a profit.

Since the merger of Peugeot and Citroen in 1978, PSA has had three chairmen. In the same period, Ford of Europe has had at least 12.

They have tried to guide Europe through a succession of reorganizations. The most damaging was Ford 2000, the globalization effort by then-Ford Motor Co. Chairman Alex Trotman. Ford 2000 dismantled Ford of Europe completely and left only global small-car development instead. Ford couldn't respond to European market trends.

Through the years of tumult in Ford's huge bureaucracy, Europe frequently turned into just a short-term executive posting before a more desirable job became available in Dearborn, Michigan.

Shifting Ford of Europe's headquarters from Essex, England, to Cologne, Germany, in the late 1990s didn't help. Ford, long the market leader in Great Britain, has watched its UK market share slide alarmingly from 21 percent in 1994 to 15 percent today. Ford's German market share has remained static at about 9.9 percent.

"They've lost a lot of talent along the way, and they're losing talent at the moment," said Steve Saxty, director of the automotive practice at FutureBrand, a New York and London consulting firm. "They should be strengthening at a time when VW is weakening, but they're not. And Opel has more stability and vision at the moment."

No Ford executives in Europe are obvious contenders for Leach's job.

Thursfield, who has been spending most of his time in Europe, now must jumpstart the company again while looking for Leach's replacement. But before Europe really turns around, Ford must commit to a long-term plan.
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Mr Know-It-All
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Re: \'He jumped because he was fed up \' \"Leach\"

That's a real shame too as Leach was the man behind a lot of great products before his rise to the top, and I would assume a great many more would have followed. Cars like the Focus RS were what fueled his passion, and in turn they fueled the passion of enthusiasts as well. It's rare for someone with his ideals to make it that far in a large automotive company - I certainly understand the pressures that would cause someone like him to jump ship.

Good luck Martin!

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