Ford shares fall as executive leaves over 'inappropriate behaviour'

Ivan Schwartz
February 23, 2018

North America President Raj Nair is leaving the company effective immediately, Ford said in a statement.

Ford shares closed in the red Wednesday, after the company announced its USA head of operations was leaving immediately following an investigation into inappropriate behaviour.

"We made this decision after a thorough review and careful consideration", Ford president and CEO Jim Hackett said. Ford, added Hackett, is committed to providing as well as nurturing a respectful and safe culture and expects its leaders to uphold those values.

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A company statement quoted Nair as regretting that he has not exhibited leadership behaviour consistent with company principles.

Ford Motor Company has ousted one of its top executives over allegations of inappropriate behaviour. The company has not yet named Nair's replacement.

Nair joined Ford in 1987 as a mechanical engineer. He had been Ford's head of global product development and chief technical officer.

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Ford began the investigation into Nair after an anonymous complaint was made from within the company. Ford will divide Nair's responsibilities among Kumar Galhotra, the firm's chief marketing officer and head of the Lincoln brand, and Stuart Rowley, the vice president of strategy.

Hackett, 62, wrote an open letter to employees in December after the New York Times published a story about the history of harassment at two Ford plants in Chicago that the newspaper said drew from interviews with more than 100 current and former employees.

Nair's departure comes after several high-profile business leaders and politicians have quit or been fired in the past year following accusations of sexual harassment, with the social media movement known as #MeToo pressing for more accountability in corporate cultures.

Ford has been working to affect a turnaround in its operations to improve profitability as its automotive profit margins have shrunk.

Michelle Krebs, an executive analyst with the vehicle shopping site Autotrader, said companies in every industry are looking at employee behavior in a new light, and the auto industry is no exception. "Investors and analysts have been unhappy with the seeming lack of a clear direction". The company's margins have fallen behind rivals General Motors Co and Fiat Chrysler Automobiles NV.

Ford shares lagged other carmakers' and the markets in 2017 and are down 16% year-to-date.

Ford stock traded in Europe was down 0.1 per cent at $10.59 as of 1:02 p.m. Thursday in Frankfurt following a 0.3 per cent slide Wednesday in NY.

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