CEO’s record may yet survive Kuga scorching
THERE’S an old joke about a man bemoaning his life. “I’ve constructed thousands of homes across the country but am I known as Paul the Builder? No. I’ve donated millions of rands to charities but am I known as Paul the Philanthropist? No. I’ve taught hundreds of young people life skills at no cost and in my own time. Am I known as Paul the Teacher? No. But you have sex with just one goat and...”
It’s doubtful the story would raise a smile from Ford Southern Africa CEO Jeff Nemeth, who will leave South Africa at the end of June to return to the US. After more than seven years transforming Ford Southern Africa into a significant local and global competitor, colleagues fear he will be remembered less for his successes than for the events of a few weeks.
Since moving to South Africa in January 2010, Nemeth has overseen the spending of almost R9-billion to turn Ford Southern Africa from an inefficient producer of several products into a high-volume manufacturer of one: the Ford Ranger.
Ford Southern Africa’s Silverton, Tshwane, assembly plant will churn out 100 000 of the bakkies this year — nearly five times the combined 20 983 Rangers, Bantams, Focuses and Mazda 323s produced in 2010. Many of the new vehicles are destined for 148 export markets. The company’s Struandale engine plant, in Nelson Mandela Bay, has also become a major exporter.
Ford vehicles have doubled their share of the local market since 2010.
Add to that a doubling of local content in Silverton-made vehicles, more than 1 000 new jobs, radical support of black suppliers through an on-site incubation centre and the development of a satellite Ranger assembly point in Nigeria, and it is clear Nemeth has achieved plenty.
He also played a strong-arm role in persuading the government to implement the incentive-driven 20132020 automotive production and development programme.
But does anyone care? Since early this year, all most people have heard of Ford is that its Kuga sports utility vehicle explodes.
Engines of models imported from Spain began conflagrating early in 2016. By January this year, with the rate of fires accelerating and Ford engineers no closer to understanding why, the situation turned into a fullblown crisis. As reports and media images of fires multiplied, Ford appeared helpless. It was being dragged along by the story, unable to react decisively.
Finally, under pressure from the National Consumer Commission and destructive headlines (Nemeth was even dragged before a parliamentary committee), Ford identified the fault and issued a recall for the 4 556 Kugas potentially affected.
By then, nearly 50 Kuga engines had caught fire. Luckily, no one was hurt — though in another, unrelated incident, a Kuga owner burnt to death. Investigations into this fire continue but investigators believe it had nothing to do with the engine.
The problem in the mass burnings, said Ford, was deficient distribution of engine coolant. Overheated cylinder heads were cracking, spilling oil onto hot engines. The late-year surge of incidents was due to the South African summer, which made engines even hotter.
The solution was simple: replace or upgrade faulty parts. By Wednesday, nearly 4 000 at-risk Kugas had been repaired.
But that’s not the end of it. This week, the global Ford company recalled a Fiesta small-car variant with a problem strikingly similar to Kuga’s. South Africa is among affected countries. There have also been reports that insurance companies plan to sue Ford Southern Africa over incidents involving the small EcoSport SUV.
That led to some newspapers interpreting this week’s announcement that Nemeth was preparing to leave Ford Southern Africa as a Ford “recall”.
He will be replaced by Casper Kruger who, until two days ago, was
The Kuga brand will certainly be affected but I think the overall Ford brand is respected and resilient
head of vehicle sales and the dealer network at Toyota South Africa. Kruger, who worked for Ford in 20072009, will become Ford Southern Africa MD on July 1, and also take on Nemeth’s responsibilities for Ford development across sub-Saharan Africa.
Nemeth, however, has not been “recalled”. It has been common industry knowledge for over a year that he would leave in 2017. His last contract extension, in 2015, specified June 30 as his last day.
That’s because his youngest son is ready to attend high school in the US. Nemeth and his family have lived outside the US on Ford assignments since 1999. He and wife Nancy were overseas when their two older children went through the senior US education system, but want to be on hand this time.
Nemeth hopes to learn tomorrow what will be his first home Ford job in 18 years.
It could have happened earlier. He was due to leave South Africa at the end of 2012 once the first major Ranger investment was complete, but kept extending as new challenges arose.
Nemeth said he was proud of many things achieved during his tenure but acknowledged many people would initially remember him for Kuga.
The public’s memory, however, is short. Volkswagen became the world’s biggest-selling motor company last year after lying about exhaust emissions. Toyota and General Motors both bounced back from scandals involving multiple deaths.
And Ford sales in South Africa have been barely dented since the Kuga issue exploded.
“How long does it take to rebuild trust?” Nemeth asked. “I don’t downplay Kuga and admit we could have handled it a lot better. But I don’t see it having as long-lasting an impact as some people have predicted. The Kuga brand will certainly be affected but I think the overall Ford brand is respected and resilient.”
The next few months will show if he is right.
It has been common industry knowledge for over a year that he would leave in 2017