Jacques Nasser

Bill Ford affectionately embraces Jacques Nasser, President and CEO of Ford Motor Company. Nasser and Ford drove to today's meeting in the TH!NK -- a zero emissions automobile.

The following are remarks, as prepared for delivery, by Jacques A. Nasser, President and Chief Executive Officer, Ford Motor Company, before the annual meeting of Ford shareholders in the Detroit Opera House, Detroit, Mich., on May 13, 1999.

Bill Ford mentioned how special this day is for him. It's also very special for me to stand before you as the chief executive of this great, global enterprise. I'm very aware and proud of the great heritage which you, the shareholders, have entrusted to me and my team.

Many companies can point with pride to their accomplishment and triumphs. Very few can say, as Ford Motor Company can, that they have succeeded for almost a century, and during that time, have touched the lives of literally millions in all corners of the globe.

So, as we gather to conduct this 44th Ford shareholders meeting, the giants who established and developed this industry -- this company -- are surely looking down, speculating on what lies ahead. Let me assure them and you that Bill and I and the team intend to leverage our great heritage as we pursue with vigor and boldness exciting new strategies designed to make us the leading consumer company in the world providing automotive products and services.

While we honor our traditions, we are not bound by them. The energy and ambition of the Ford team to create new ways is almost limitless. I am very proud to be here today on behalf of that team to share with you our vision and plans for the future.

To achieve a fast start we enacted a first 100 day program earlier this year. If the past 100 days are any indication, the future of Ford will be characterized by speed, transformation, teamwork and growth that are all driving to enhance customer loyalty and thus shareholder value.

It will also be characterized by a unique sense of family that distinguishes us from most other companies. While we have achieved much in our first 100 days, the tragedy at the Rouge is one we will never forget. The response of employees to help those who were lost or injured and their loved ones was an outstanding demonstration of the Ford family caring for its own. During those terrible hours and days, everyone came together as a team to meet the crisis. I would personally like to thank all employees, the UAW and those in the community who gave so much, and are continuing to give, to the families impacted by this tragedy. We will move forward. But the deeply human story of the Rouge will be with us always.

This morning, I want to share with you the transformation that is gathering pace at Ford, what it will mean for you, the kind of company we are building and the major agents of change that are moving us forward.

We are an organization with tremendous resources. First and foremost, we are truly global. We span 200 countries and territories on six continents. We are a diverse workforce of over 370,000 entrepreneurs. Ford Motor Company is one of the most recognized and respected names in the world. We connect with people.

Under the leadership of Alex Trotman, we took this global heritage and made it even stronger. Ford 2000 was, in effect, our own internal $150 billion merger of our regional automotive business into a cohesive, global organization.

Ford 2000 has paid real dividends. Quality and productivity went up. Costs were reduced. More product was introduced in more segments around the world in shorter cycle times. We eliminated or sharply reduced waste and duplication while sharing best practices throughout our global system.

We learned to communicate and cooperate effectively across oceans and time zones to better serve our customers. Just as important, we harnessed technology to leverage our global scale to compete more assertively in the global marketplace. And we took a major step forward in the development of our people by greater use of international assignments to hone and develop their leadership skills.

Ford 2000 energized our people and opened challenges and opportunities which placed us on the leading edge of the automotive business. The next stage in our evolution will transform Ford into a very different kind of company. One that produces superior shareholder returns, a real focus on consumers, profitable growth and continuous transformation.

Our great global strength will be leveraged even further. There will be five major focal points to this exciting transformation that we can leverage for a sustainable competitive advantage. The first is a laser focus on the consumer. The second is focus on our brands. The third is focus on our people and leadership. Fourth is best total value. And fifth is corporate citizenship.

But first, why change at all? We have produced 12 consecutive quarters of improved year-over-year automotive earnings. Operating profits in the first quarter set a new record. Total automotive costs continue to decline. In so many ways, we appear to be on a steady track to deliver consistent performance.

All true, but not enough. Change goes to the heart of what business is about. Society is changing at an ever faster pace. Globalization and technology are reshaping consumers' lives, creating new and different needs at an ever-faster pace.

In the midst of this, any business that is satisfied with the present state of affairs is deluding itself. Sitting still is effectively moving backwards. Competitors from within and without the industry are figuring ways to be the leaders in the next century. The Internet and E-commerce have the potential to revolutionize the business environment and, in the process, to turn today's winners into tomorrow's losers.

The Ford team has winning DNA. We have no intention of being the generation that hands over a diminished Ford Motor Company to our successors. Our task is to be the leaders of the business revolution, not those who wait to see which way the wind blows and then follow in the wake of the winners.

We are absolutely clear in our determination. We have embarked on the change from an industrial company to becoming a superior performer as a consumer-focused company that provides automotive products and services.

Superficially, it appears that the story of our industry is one of consolidation through mergers and acquisitions. These are significant, and we are on the acquisition trail ourselves. But the real story of our industry is learning to get inside the mind of the consumer to understand what he or she really wants, what they aspire to and what they will need not only at the point of original purchase but throughout the lifetime of the product or service we provide.

Excellence in manufacturing, quality and productivity will no longer be enough. They are becoming standard within the industry. Only those companies who really understand the consumer will prosper in then next century.

So, we're working to create a consumer "headset" to understand how consumers think, see, hear, touch, smell and feel. We want to know everything about them and how they see us and what they want from us.

The consumer headset starts with understanding consumers' rational requirements -- what they want in a car or truck. Things like package, price, quality, safety and driving dynamics. But the consumer headset also requires a broader perspective on the business. Take cost as just one example. To sharpen our focus on the consumer, we've changed our point of view totally. We're looking at value from the consumers' eyes.

We used to think of costs simply as our costs of manufacturing and selling. We didn't really think about costs the same way a consumer does. Cost of ongoing ownership, repair, service, financing, insurance, residuals, recycling -- all of it.

We do now. We do because it gives us better insight into how to bring greater value to consumers over the entire time they use the vehicle.

And the consumer headset means our products and services must touch the consumer on an emotional level.

The emotional level is harder to pin down. It's more than styling or a feeling of exclusivity. It's about what the consumer personally aspires to become and how she sees herself at a particular stage in her life. And how the car or truck enhances that self image.

Valuable as it is, market research isn't enough to really get inside the consumer's mind or to understand the consumer's soul. To really succeed, intuition and visceral feel must come into play.

Do you remember when you first learned to drive? The first car or truck that you called your own? Years and years later, most people do.

That's the magic real consumer knowledge can bring, by having that intangible, intuitive feel for what will surprise, delight and excite.

Does the car look fast while parked in the parking lot standing still? Do the door handles signal the quality of the whole car? Does the seat fit like a tailor-made suit? Is the feedback from the road always responsive and comfortable?

Characteristics like these separate the copiers from the true originals. No wonder we still say that designing a new car or truck is an art.

Executing well creates ongoing loyalty and real enthusiasts.

It's that special challenge that leads us to the next major focus in our transformation – strong global brands.

The art of connecting with the consumer actually starts with strong brands. Brands that speak to the consumer's aspirations. Brands that define the consumer's identity and personality. Brands that excite.

Fortunately, we already have some experience building and growing strong brands. Strong brands have helped us redefine and even create important segments in the market.

Built-tough Ford trucks. Can't you just see the image of this great brand? It's one of the strongest in the industry, and one of the reasons that F-Series continues as the best-selling vehicle – car or truck – in the world.

Ford Explorer. It redefined the compact sport utility segment, followed by the Ford Expedition, which redefined the large sport utility segment.

Lincoln Navigator virtually created an all-new segment overnight and brought to Lincoln consumers who were totally new to the brand.

Jaguar. Elegance that purrs. A copy of nothing.

And, of course, Volvo. Not a Ford creation, but one that now graces our portfolio with a powerful reputation for safety, environmental responsibility, and world-class engineering.

In Europe, Focus has redefined the small car. We've found that 40 percent of all Focus buyers drove cars of other brands before switching to the new Ford. Focus won honors across Europe, wining European Car of the Year and many other awards. We think Focus will do equally well when introduced to American consumers.

Strong brands like Mustang and Thunderbird live on in the consumer's heart and soul long after the purchase. They actually enter into the lives of the consumer and become an active part of their personal histories.

Here's what we mean by strong brands.

First, new cars that will grow our business: Focus. Taurus. Thunderbird.

Next, trucks – the part of the market we dominate and will continue to do so: F-Series Super Crew. Excursion. Blackwood.

Finally, the Premier Automotive Group – four wonderful luxury brands, our next segment to dominate: Volvo S80. Lincoln LS. Jaguar S-Type. Aston Martin DB7.

You saw the TH!NK electric car that Bill and I drove. Think is manufactured by Norwegian-based TH!NK Nordic, in which Ford recently took a majority interest. We'll be introducing TH!NK in Finland, Denmark, Norway and Sweden this year and expanding sales to other markets thereafter.

But understanding the consumer is more than selling new cars and trucks or providing financing or irresistible value. We want to be involved in the consumer's total transportation experience. This experience is far broader than new car or truck purchases. It's service, parts, accessories, insurance and so on until then next purchase. If you look at market share on that basis -- the total transportation experience -- then our market share is actually far lower.

We're focused as never before on understanding the consumer's total transportation experience. It's a huge opportunity for us. So, we've developed a cohesive strategy that will inject us into that total experience as never before.

This strategy takes two forms. One relates to how we look at the business and how Ford Credit and Hertz relate to one another and how Visteon relates to the automotive business. The other involves new but carefully executed acquisitions that will help us extend our reach to broaden our understanding even further.

Recently, two acquisitions have been in the news. One strengthens our presence in the service business in Europe. The other makes us a bigger player in recycling in North America. In Europe, we are purchasing Kwik-Fit, Europe's largest maintenance and light repair chain and an expert in customer handling. This acquisition offers a great opportunity to reach an entirely new set of customers in Europe.

In addition, we announced the purchase of Copher Brothers Auto Parts in Tampa, a state-of-the-art recycling operation that we plan to expand and eventually use to recycle parts from Ford plants as well. There are about 11 million vehicles scrapped annually in the United States alone. The recycling business is highly fragmented and can benefit from a nationwide, computerized parts inventory and shipping system to reduce the time it takes a repair shop to get a used part. Here's a great business and environmental improvement opportunity.

These acquisitions are highly complimentary. They bring us closer to the consumer. They inject us into the total transportation experience – from showroom to recycling and everything that happens in between. And they leverage our core skills.

Next, our people. And this is the reason I am so optimistic that we can meet our goals of developing a consumer focus, growth and transformation. The present global Ford team is the best ever assembled in our industry. And we have just begun.

The quality, talent and motivation of all our people will determine our performance. We have a laser-like focus on the recruitment, development, reward and recognition of our employees. We have never been more conscious of the vital importance of people to our business. The competition for people -- the "war for talent" as it is being called -- is one we plan to win and we are winning, as witness some of the world-class executives who have recently decided to bring their experience, energy and innovation to Ford.

Our target is to develop leaders at all levels. We want our people to have a perspective on the business and be able to teach that perspective to their colleagues. People who can teach the business will have the confidence to make the everyday decisions which create speed throughout every process. Speed which, in turn, creates competitive advantage in the market place. Leaders at every level means the development of entrepreneurial skills, the power of teamwork and the tapping of huge energy resources right though the company in every department, in every plant, in every country on every continent.

A huge ambition, but one to which our people are already responding. This year we have cascaded our "consumer headset" vision to more than 100,000 throughout our world. And we did it in eight weeks. And it's clear from their notes to me that our people are excited, motivated and hungry for more opportunities to stretch themselves and take a bigger role in guiding our transformation.

The depth of our leadership capability will be one of the key criteria for our success in the next century. We already have powerful programs in place -- Capstone, executive partnering, Business Leadership Implementation. These are only a start.

We plan to be the company for leadership development. We have the global reach and scale which allows us to offer outstanding career opportunities. We intend to leverage these advantages to the full in the service of our employers and their relationship to the consumer.

One area in which you can expect to see accelerated change is the diversity of our employees. Our consumers are diverse, literally every race, gender, ethnicity, age, perspective in the world. Our employee population will mirror this global diversity, and our company and business will be better for it.

Our managers have annual objectives on diversity, and their compensation this year will be linked to their progress in meeting them. We are passionate about building an organization that practices fairness in recruiting, developing, and promoting our people. We are set on becoming the employer of choice for all groups in our global society.

We are deliberately questioning all aspects of our people policies and processes. About 20 percent of Ford stock is owned by our employees. They have awakened to the concept of shareholder value, and they understand the need for growth through a consumer focus. They recognize the power of our brands. They are thinking like owners of the business. They are ready to acquire new skills and knowledge to move this great company to a new benchmark position. Now you know why Bill and I are excited.

Finally, corporate citizenship. A consumer focus and reliance on talented people and strong leaders requires a superior corporate reputation and uncompromised trust. Corporate citizenship is at the heart of any company's reputation. It is not only good for business, it's also good for the business. In a way, it's how we bring it all together. It involves the way we treat consumers, how we respect and develop people, active partnership in communities around the globe and concern for safety and the environment. It makes us human, and it is a vital part of global life.

The transformation before us won't be easy. We'll be involved in businesses that are new to us. But over the next few years, we'll be remaking Ford into a different company, a stronger company and a company with a future just as strong as the heritage that has been left to us.

And above all, we' are building a growing, global company that adapts and changes as fast as the global consumers it serves.

There are many who watch us, hoping that we'll stumble, or worse. But Ford 2000 was supposed to have been a stumble, and now our competitors have in place similar plans of their own.

Today, at Ford, the giants from our past still provide us guidance for our future. Their breakthroughs succeeded because they leaped over their competitors by understanding what the consumer wanted better than anyone. There were risks but, in them, they saw opportunity. And they unlocked for themselves a secure place in history.

The transformation before us has no end. The global economy that we embrace is a race with no finish line. That used to be a daunting prospect. Now, we find it exhilarating. It's a rare privilege to lead a company as great as Ford into a new era full of promise and challenge. But it's a privilege and honor that I take very personally and very deeply.

And I'm grateful for the confidence that you and the Board have placed in me and my team to do the job. It's a huge responsibility that we embrace gladly.

Thank you.