30th wedding anniversary gift idea

What's ahead for Alex Trotman as he takes the

Ford Motor Co. heads into the mid- and late-1990s with a change in command as Alexander J. Trotman takes over as chairman. To get at the issues facing Mr. Trotman and his team. Ward's Auto World conducted in-depth interviews with 16 high-ranking Ford executives and other sources for this series of articles, which begins with The View from the Top.

Alex Trotman celebrated his 30th anniversary on Nov. 1, the same day he took over as chairman of Ford Motor Co.

Because of the press of Ford business, he'd never before celebrated his wedding day with his wife. "I said this will be special. We'll go somewhere, just the two of us," he says. But that wasn't to be: That evening he was scheduled to speak at a dinner for 250 publishers. "Val is coming to dinner with me, but we'll have 250 other people," he says.

At 60, Alex Trotman, a 38-year-old Ford veteran, takes charge of the world's second-largest automaker at a time when it's clicking on all cylinders. Just four days before, retiring Chairman Harold A (Red) Poling collected a handsome going-away gift as Ford reported a hefty $463 million third-quarter profit, boosting earnings for the first nine months to $1.8 billion. During the past two years, Ford lost $3.8 billion on operations and $11.3 billion after a 1992 write-off for retiree-health-care costs.

More important, Ford earned $333 million during the July-September period from its North American Automotive Operations (NAAO) compared with a $260 million loss a year earlier, confounding analysts who've been especially critical of NAAO's performance.

Except for lingering problems in its Ford of Europe Inc. operations (see story p.34), Mr. Trotman assumes command at a time when Ford's outlook could not be much brighter. Besides laying claim to being the lowest-cost U.S. producer, since 1991 Ford has raised its share of the U.S. vehicle market to 25.3% from 23.1% and in August outsold General Motors Corp. in the redhot truck market. However, Ford still trails GM in trucks by 70,000 units for the year. Profits of its Financial Services Group remain extremely strong, and on the automotive side it has some $9 billion in the bank.

Moreover, all signs suggest that the U.S. auto industry's three-year malaise is ending and that a new up-cycle is under way. If so, Mr. Trotman is likely to ride the crest of record results before he retires in July 1998 when reaches 65. Unlike Mr. Poling, who stayed on three years past normal retirement, Mr. Trotman intends to depart on schedule.

Although they hardly are two peas in a pod, Messrs. Poling and Trotman share plenty. Both have broad international experience, have worked in a wide variety of jobs during their careers and are zealous advocates of targeting quantifiable results. "We're interested in the soft side of things, but when you boil it down you want to see how you can measure what you're doing," Mr. Trotman says.

Both men also headed NAAO during some of its most trying times -- Mr. Poling in the early 1980s and Mr. Trotman in the 1989- '92 period. It wasn't pleasant, but Mr. Poling closed plants and laid off workers to keep NAAO afloat without curtailing Ford's largest new-product barrage ever up to that time, including the $3 billion Taurus program that was to produce big dividends. "We took out billions of cost. It wasn't very much fun," Mr. Poling recalls. "I didn't sleep at night. It was painful as hell. The alternative was a lot worse: You go out of business."

Mr. Trotman sat in "the hot seat" at NAAO during the next big dip, "and I don't recommend it for the faint-hearted," he says. Ford ran through $13 million in cash flow to keep on track, providing a powerful reminder to prepare for the next downturn.

Ford expects that to come around 1997, and the painful lessons of the last two troughs remain very much on his mind and explain why Mr. Trotman can be expected to play his cards close to his vest.

With global overcapacity remaining perhaps the biggest threat Ford faces, he vows to continue Mr. Poling's longstanding policy of making do with existing facilities in North America and Europe. Major investments, however, are targeted for the Asia/Pacific region.

Like his predecessor, Mr. Trotman intends to keep hammering costs no matter how much money Ford makes. "The '94 budget is going to be tougher than '93," he says, "and if we shoot the lights out in '94, it'll be tougher in '95."

He concedes that demanding more sacrifice becomes increasingly difficult as profits grow, but insists Ford nonetheless must remain focused on improving.

Mr. Trotman's selection ended more than a year of speculation over who would succeed Mr. Poling. His major rival was Allan D. Gilmour, 59, vice chairman for financial services and corporate staffs, a highly respected executive who, like Mr. Trotman, has served in numerous key slots.

A 33-year Ford veteran with strong ties to the financial side, Mr. Gilmour admits he was disappointed in the outcome. But he has no plans to pout and move on. "I'm too old to send out resumes and too young to collect Social Security," he quips. An avid car buff and racing fan, Mr. Gilmour gets major credit for building Ford's financial Services Group into a money-making powerhouse. He's fully aware Ford must sequester ample cash for the next dip rather than spending on an acquisition binge as it did when profits piled up in the late '80s.

"This time we're going to put it on the low-set stove to keep it warm, and we're going to pad it to make sure it's there," he says. "It takes a heck of a lot more money to go through a downturn than I thought it did." How much for the next dip? Perhaps $20 billion to pay down debt while keeping product and capital spending plans intact. "It's a huge amount of money. We have planned beyond four to five years on both sides of the ocean," he says.

Mr. Trotman says he can understand Mr. Gilmour's disappointment, and downplays his own role. He, along with Mr. Gilmour and Louis R. Ross, 61, vice chairman and chief technical oficer, form "more of a tripod at the top of the organization, rather than just a single guy," he says. "We get along extremely well together."

The fact that all three are close in age and are considerably older than the average age of top executives at General Motors Corp. and Chrysler Corp. doesn't faze Mr. Poling. Although underscoring that the average age in Ford's executive ranks will drop "overtime," Mr. Poling makes it clear that he values experience. "I was on several jobs for up to seven years and I had a chance to do something, see the results and if I did the wrong thing, I learned from it. So when I got into those situations again, I knew what to do just instinctively. When you run into a recessionary period like we've had in North America, there's just no road map."

Mr. Trotman didn't have a road map for reaching the top, but he had plenty of ambition. "When I was chasing parts at the Ford of Britain metal stamping operation in Dagenham, it didn't seem very likely I would be head of the Ford Motor Co."

Born in Middlesex, England, and raised in a tightly knit family in Edinburgh, Scotland, where his father was a carpet-layer and upholesterer, Mr. Trotman had a scholarship to the Boroughmuir School and could have qualified for entrance to Edinburgh University. But money was tight, so he joined the Royal Air Force and won a commission as a navigator on a two-man jet. Discharged four years later, he joined Ford as a trainee. "My ambition was to be a buyer in purchasing. That was what all of the hot dog young guys wanted to be at that time. All of the leaders of Ford-Britain had come from purchasing since World War II, so that was sort of an elite group."

He moved up quickly and by 1967 at age 34 was serving as director of Ford of Europe's car product-planning office. "I was very visible and I was off to the races, but I felt I really had to break out and come over here (the U.S.) to go up the ladder," he recalls. "It wasn't viewed as a great idea at the time." Ford refused to pay his way, so he sold his house, packed up his furniture, paid his own air to Detroit and started in a lower-level job. "I was still very ambitious; I had all of the energy in the world. Ford of Europe was a big piece, but I wanted to get in the really big piece and go up the big hill."

A U.S. citizen since 1975, Mr. Trotman is Ford's first foreign-born chairman. Eventually he collected a masters of business administration degree from Michigan State University, even though he never completed undergraduate studies. After RAF duty, "I joined the real university. It was called Ford Motor Co. and I've been a student for 38 years. I haven't graduated yet."