Ford U.S. chief departs abruptly after behavior probe

[February 22, 2018]   By Nick Carey

DETROIT (Reuters) - Ford Motor Co said on Wednesday that Raj Nair, its president for North America, was leaving the company immediately after an internal investigation found his behavior was "inconsistent with the company's code of conduct."

Ford did not give any details on what that behavior entailed. A company spokesman said the review was launched in the past few weeks after Ford received a report of inappropriate behavior.

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.

"We made this decision after a thorough review and careful consideration," said Ford Chief Executive Jim Hackett in a statement. "Ford is deeply committed to providing and nurturing a safe and respectful culture and we expect our leaders to fully uphold these values."

As North American chief, Nair was responsible for operations that generate about 90 percent of Ford’s global profits.

Nair apologized, without elaborating.

"I sincerely regret that there have been instances where I have not exhibited leadership behaviors consistent with the principles that the Company and I have always espoused," Nair said in Ford's statement.

The company is not investigating other executives for similar cases, a Ford spokesman said.

Nair, 53, was appointed to his current position last May when Hackett became CEO of the No. 2 U.S. automaker.

Nair previously served as Ford's chief technical officer. He joined Ford in 1987 and rose through the automaker's manufacturing and engineering ranks to become head of global product development in 2015.

Nair stands to lose about $4.8 million worth of Ford restricted shares he was granted in May 2017 that would have vested had a remained with the company until May 2020.

Raj Nair, Ford executive vice-president of global product development, speaks during the North American International Auto Show in Detroit, Michigan, U.S., January 9, 2017. REUTERS/Rebecca Cook

In August, Ford agreed to pay up to $10.125 million to settle an investigation into sex and race harassment at two plants in Chicago conducted by the U.S. Equal Employment Opportunity Commission (EEOC).

The EEOC said female and African-American employees had been subjected to sexual and racial harassment and found the automaker retaliated against employees who complained about the harassment or discrimination.

In an open letter after the New York Times published a widely read article on the matter, Hackett wrote "there is absolutely no room for harassment at Ford Motor Company."

"We don't want you here, and we will move you out for engaging in any behavior like this," he wrote.

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

In emailed commentary, Michelle Krebs, executive analyst at Autotrader, the online market for cars, said this comes "at a particularly bad time for Ford."

"Investors and analysts have been unhappy with the seeming lack of a clear direction for Ford," she said. "The pressure is on Jim Hackett... to lay out a clear road ahead for Ford."

The company's margins have fallen behind rivals General Motors Co and Fiat Chrysler Automobiles NV.

Year to date, Ford shares are down 14 percent.

In extended trading on Wednesday, Ford shares were unchanged from their official close of $10.60.

(Reporting By Nick Carey; Editing by Clive McKeef)

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