Amid recalls, lawsuits and cash flow problems, Ford chief executive Jacques Nasser will have to answer a lot of questions when the company directors meet on Wednesday.
Ford chief executive Jacques Nasser is likely to come under fire at the company’s board of directors meeting on Wednesday. The directors are meeting to discuss the growing problems at the manufacturing company, which are causing declines in profitability.
A massive recall of Firestone tyres linked to more than 200 deaths and 700 injuries, many of them in rollovers of Ford’s popular Explorer sport utility vehicle have hit the company hard.
Negative cash flow, steadily eroding market share, the costs of the recall and the company’s recent warning it will fail to meet financial targets set earlier this year have led most analysts to downgrade Ford’s stock in recent months.
The company is also facing the possibility of more huge lawsuits connected to the tyre issue and is currently being sued by older mid-level managers because of a controversial employee evaluation system that they believe discriminates against them.
There is also an apparent decline in support for Nasser and persistent rumours of a rift between the chief executive and chairman Bill Ford.
Industry analyst Rod Lache believes it would be a mistake to get rid of Nasser now. He said the Australian is the type of person who can lead them through this bad phase.
“I think it’s going to be a very difficult few years. There’s a scenario in which the company will not be profitable at some point over the next three or four years,” Lache said. “I think they’ll restructure and come back. I don’t think this a sort of fatal situation. But I do think that it’s going to be painful.”
