Former CFO Lewis Booth helped put together Ford's successful turnaround plan.
As one of the architects of Ford Motor Co.’s successful effort to survive the deep U.S. recession without a federal bailout, former Chief Financial Officer Lewis Booth demonstrated his turnaround skills. But can the now-retired Ford exec pull that magic off on a continental scale?
That’s something being proposed by the giant bank Credit Suisse, which suggests that bean-counter Booth would make an excellent European car czar, a role that would be modeled after the job that Steven Rattner held during the bail-outs of General Motors and Chrysler in 2009 and ’10.
The European auto industry certainly could use the help. Sales have plunged to levels last seen during the depths of the recession and few believe the market has yet bottomed out, what with countries like Spain, Greece and Ireland facing deep austerity programs as they struggle to fix their own financial problems.
Industry losses are mounting into the tens of billions of dollars. General Motors’ Opel subsidiary is struggling to survive. PSA Peugeot Citroen is expected to seek a bailout from the French government. And others seem likely to follow if the situation doesn’t turn around soon.
In a 53-page report on “how to fix Europe’s broken car industry,” Credit Suisse cites Booth as the man to get the job done. What may be most significant about the bank’s proposal is that it looks at the issue as a pan-European problem, suggesting that the turnaround can’t be achieved by having one country or another deal with its local manufacturers. That’s so far been the approach, as with Peugeot hoping France will come to its rescue.
Such country-by-country rescue plans have been used repeatedly in recent years, but they are as much a part of the problem as the solution, suggests Credit Suisse, its report declaring that, “Europe’s car makers will be kept afloat by national governments and long-needed reform will be put off again.”
Indeed, after Peugeot this month announced a turnaround strategy this month calling for the closure of one of its redundant plants the proposal was quickly denounced by France’s new Socialist president . Observers say it would be hard for Peugeot to proceed with the closing if it hopes to obtain government financial assistance.
The EU, the report stresses, “needs to accept responsibility” for rescuing an industry that provides an estimated 12.7 million jobs on Continental soil.
Whether European lawmakers are willing to come together on a Continent-wide plan that could override national laws that make it nigh-impossible to close plants and reduce workforces remains to be seen. But Booth does appear available if the reality of the current European crisis trumps local politics.