Ford shakes up top team, names product chief

DETROIT, Dec 15 (Reuters) Ford Motor Co. announced on Thursday a shake-up of its top management intended to streamline vehicle development efforts and bring Chief Executive Alan Mulally closer to key operations.

In his first major move since taking his position full time in October, Mulally created a post of global product development chief at the struggling No. 2 U.S. automaker and eliminated a layer of management in its international operations.

Derrick Kuzak, 55, who played a key role in the launch of Ford's small Focus sedan, will lead Ford's new global development group, reporting to Mulally.

Under the reorganization, three business unit chiefs will now report directly to the CEO: Mark Fields, 45, who heads the Americas; Lewis Booth, 58, who is in charge of Europe and Ford's luxury brands; and John Parker, 58, who has responsibility for the Asian region and Mazda.

Mulally, who joined Ford from Boeing Co., had made it clear he was looking to revamp the automaker's operational structure to make Ford leaner and more centrally driven in areas such as product development, purchasing and engineering.

In a series of interviews since taking office, Mulally has criticized Ford's regional operating structure as an impediment that was keeping the company from competing effectively against rivals such as Toyota Motor Corp.

''An integrated, global product development team supporting our automotive business units will enable us to make the best use of our global assets,'' Mulally said in a statement announcing the reshuffle, which came after a Ford board meeting.

The new management structure at Ford parallels one already in place at larger rival General Motors Corp., where Bob Lutz was named global product chief last year in a move that analysts have praised for amping up GM's product pipeline.

''This kind of thing makes sense, it is a global company that has been operated regionally for a long time,'' Morningstar analyst John Novak said of Ford. ''To some extent they have been trying to do this, but having a reporting structure that is explicit is a good thing.'' As part of the management changes announced on Thursday, Mulally will have four additional executives reporting directly to him with responsibility for purchasing, manufacturing engineering, information systems and technology.

The restructuring also eliminated the position that had been held by Mark Schulz, Ford's former head of international operations, who announced his early retirement last week after more than 30 years with the automaker.

Ford, which has seen its sales drop by 8 percent this year, has faced scrutiny because of what many analysts see as the weakness of upcoming products at a time when consumers are shifting away from its stronghold in trucks and SUVs.

In one example, Ford is not expected to have a subcompact car for the U.S. market until 2009, though executives see that segment as one of the fastest growing because of shifting generational dynamics and concern over higher fuel prices.

Mulally's arrival at Ford has been viewed positively by Wall Street analysts as a catalyst that could push the automaker through the next phase of a restructuring that has already seen more than 50,000 jobs cut and 16 plants closed.

Morningstar's Novak said he expected Mulally to put his own stamp on Ford's restructuring plan over the next few months.

In a note issued before Wednesday's announcement of Ford's executive shake-up, Merrill Lynch analyst John Murphy upgraded Ford's stock to ''neutral'' from ''sell,'' saying the company's recent billion borrowing program had given the beleaguered automaker ''much-needed breathing room.'' Murphy said he expected Mulally to give more detail on his operating plan as soon as the Detroit Auto show in early January.

''It is tough to believe that a turnaround can be effected in short order, but clarity on Mulally's plan could be viewed positively by the market,'' he said in note to clients.

Novak said he thought Ford's fundamentals would remain difficult at least through 2007.

Prior to the announcement of the shake-up, Ford shares closed up 3.3 percent at .11 on the New York Stock Exchange. The stock is down about 8 percent since the start of the year.

REUTERS DKS PM0703