Ex-Chairman Sees Ford In Banking for Long Haul
In the corporate world, everybody talks, nobody listens - especially managers.
That has to change if American companies, including banks, are going to remain competitive, according to Donald E. Petersen, who was chairman of Ford Motor Co. from 1985 to 1990.
Mr. Petersen, a soldier-straight, lean-faced 66-year-old, blew into Washington last week to promote "A Better Idea," the how-to-manage book he wrote with USA Today reporter John Hillkirk.
The book tells how Mr. Petersen was persuaded by consultant W. Edwards Deming to embrace his ideas on quality management, as the Japanese had done decades earlier.
A Focus on Cars
Mr. Petersen details how he put the Deming ideas into action at Ford - which, these days, is as much a banking and financial services company as it is an auto manufacturer.
Bankers might be disappointed that the book dwells primarily on the creation of cars like the Taurus, with just a brief mention of Ford's $121 billion-asset financial arm.
Yet Ford Financial - which consists of Ford Motor Credit Corp., Associates Corp., First Nationwide Financial Corp., and U.S. Leasing International - may truly be Ford's better idea.
The automaker lost $574 million in the latest quarter, but the loss would have been worse without the $177 million profit from financial services. (First Nationwide, the thrift company, did not help, losing $20 million in the quarter and $47 million in the nine months.)
Mr. Petersen said he gave only token recognition to the financial group, because he has "a much more intimate background with the manufacturing side of the company."
Is that to say he is downplaying the division's importance? Before answering, he paused and shuffled his feet.
"That's one area where acquisitions will turn out to be quite beneficial," he said.
Ford's goal is to have the financial side of the company eventually provide a third of total earnings - in good years and bad. That also means the carmaker plans to be in banking for a very long time.
San Francisco-based First Nationwide, with $25 billion in assets is clearly the weakest link in the financial chain.
Profitable Operations
In contrast, Ford Credit, with $57 billion in assets, made $585 million during the first nine months of 1991. Dallas-based Associates, with $20.8 billion in assets, made $298.1 million. U.S. Leasing, with $18 billion in assets, made $36 million.
Mr. Petersen said Ford's decision in the 1980s to purchase a troubled thrift from the government was sound, but subsequent acquisitions of troubled institutions may not have been so wise.
Over the long run, he added, First Nationwide "will prove to be a real contributor."
PHOTO : SPARKPLUG: Donald Petersen's Ford became as much a financial company as a carmaker.
