Why Knudsen Was Fired

Can the son of a General Motors president find happiness running Ford? For 19 months, Semon E. ("Bunkie") Knudsen thought so. Disappointed at having been passed over for the G.M. presidency once held by his father, William S. Knudsen, he quit G.M. after a 29-year career early last year and jumped at an offer to become president of Ford. But Bunkie Knudsen's take-charge attitude brought no happiness to other Ford executives. Last week, in one of the auto industry's most bizarre episodes, Knudsen and Ford disclosed that he had been fired outright.

Chairman Henry Ford II, whose hiring of Knudsen had been widely hailed in Detroit as a managerial masterstroke, walked into Knudsen's office two weeks ago and told him that he was through. Stunned and aggrieved, Knudsen asked why he was being dismissed from his job, which paid him $580,952 last year. As Knudsen told the story, Ford replied only that "things did not work out as I had hoped." At a press conference last week, Ford conceded that he could not think of any Knudsen decisions that he had disagreed with and kept repeating: "It just didn't work out."

A Matter of Personality. What did not work was Knudsen's concept of how a Ford president should operate. Ford's young executives have always admired G.M.'s all-around management strength, but they were startled when a G.M. man was brought in to be their boss. Their dismay increased when they discovered that Knudsen, a gentlemanly but strong-willed executive, intended to run the company practically at the plant level. Instead of sitting in his office ruling on policy, he took to haunting the Ford design center, arriving there as early as 7:15 a.m. He ordered one change in the grille of the 1970 Thunderbird that made it resemble the Pontiac --a car produced by the G.M. division that Knudsen once headed. He also changed some personnel at the middle-management level without paying due respect to the wishes of other managers.

All this stirred general resentment among Ford men, especially Executive Vice President Lee A. lacocca, the assertive architect of Ford's highly successful Mustang and Maverick. lacocca, a tough and ambitious marketing whiz whom Detroiters look on as Chairman Ford's heir apparent, was shocked and disappointed when Knudsen was brought in, and later had several clashes with him. The two men held a peace parley last January, but if they came to an agreement, it did not last. Says one high executive who knows both well: "Lee had chewed his way through ten layers of management to get where he was, and he was determined to chew his way through anyone who was placed above him."

Ford's original idea in recruiting Knudsen, now 56, was to let him act as president for some years while lacocca, 44, got some more seasoning. After Knudsen arrived at Ford, many executives concluded, to their surprise, that he was not really as shrewd or nimble as lacocca. In his overeagerness to succeed, Knudsen committed a tactical error. He tried to make policy in parts of the company that lacocca thought were his responsibility. Not long ago, lacocca went to Henry Ford, who considers lacocca his brightest protege, and told him that he could no longer endure Knudsen's meddling. Apparently Knudsen's methods had not overly pleased Ford, either. The grandson of the founder of the Ford Motor Co. insists on maintaining absolute control of the business, knows just about everything important that goes on in the company. As he said last week: "I am the chief executive officer of this company."

The outcome of the Knudsen affair made lacocca stronger than ever. Ford did not name a new company president. Instead, the directors elected lacocca and two other "high Ford executives, Robert Stevenson and Robert J. Hampson, presidents of three major operating groups, lacocca, as head of all auto product development, manufacturing and sales in the U.S. and Canada, is clearly primus inter pares. He could not quite conceal his delight at Knudsen's departure. When asked if he was sorry to see Knudsen go, lacocca replied: "I've never said 'No comment' to the press in my life, but I'll say it to that one."

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