Ford aims for turn around

By The Associated Press

DETROIT – Ford Motor Co. is trying to stay focused on its North American turnaround amid a drumbeat of bad news this week. The nation’s No. 2 automaker expanded a major recall on Thursday, doubled its second-quarter losses the day before and for the first time, fell behind Toyota in U.S. vehicle sales.

To help, it has hired a former Wall Street merger and acquisitions whiz as a strategic adviser, cementing the idea that everything is on the table as it battles sluggish sales, rising costs and ferocious competition from Asian rivals.

On Tuesday, industry figures for July showed that for the first time, Ford sold fewer vehicles than Toyota Motor Corp. in the United States – underscoring its woes.

Last month, Ford pledged to speed up and possibly deepen its North American turnaround plan. And analysts say the hiring of Kenneth Leet to advise Bill Ford, the automaker’s chairman and chief executive, increases the possibility that the company may try to sell some operations as part of its restructuring.

“Everything has to be in play, whether it’s job cuts or plant closings or alliances or partnerships or sale of assets,” said auto analyst David Cole. “You really can’t avoid looking at every element.”

Ford says it has no plans to sell any of its brands or invest in a new alliance. Crosstown rival General Motors Corp. is studying a possible alliance with Nissan Motor Co. and Renault SA.

But in an e-mail to employees this week and comments last month, Bill Ford made it clear that the company is keeping its options open.

“I will continue to evaluate the rapidly changing landscape of our industry and review the best ways in which we should adjust,” Bill Ford wrote Wednesday. “That’s why I’ve hired Ken Leet to assist me and our senior management team in evaluating our business and exploring strategic options.”

Ford hasn’t said how he would accelerate the turnaround effort, but expects to detail efforts by mid-September.

Leet, who spent 18 years with Goldman Sachs Group Inc. and led European banking operations for Bank of America Corp., is familiar with Ford from his investment banking work. He was tapped by President Bush in 2003 to be the Treasury Department’s undersecretary for domestic finance, but dropped out from consideration, citing health reasons.

“Given Leet’s background as an M&A; banker, rationalizing some of Ford’s ailing brands through a sale appears more likely with Jaguar the most obvious candidate,” Merrill Lynch analyst John Murphy wrote in a research note.

Ford spokesman Tom Hoyt said Thursday that Leet isn’t giving interviews.

The Wall Street Journal reported that Ford is starting a review of poorly performing units, including Jaguar, with an eye toward the possible sale of some operations. But some analysts note that Jaguar is intertwined with Ford on buying, manufacturing and distribution – making a sale complex.