Hayes’ last hurrah
February 15th 1989
courtesy and copyright of Autocar
Walter Hayes, newspaper editor turned car company executive, retires on 1 May after 26 years as one of Ford’s clearest thinkers and most effective visionaries – and the man who made cars like the Fiesta possible. Mark Hughes reports.
Walter Hayes, Ford of Europe’s vice-chairman, will retire on 1 May, soon after his 65th birthday. The timing of his departure, just after the new Fiesta begins production, is appropriate considering Hayes’ key role in planning the original Fiesta. It will be the end of a 26-year spell with Ford, during which Hayes; exceptional vision and shrewd mind have taken him to the top of the company, with influence on Ford’s world stage and a close relationship with the late Henry Ford II.
More than anyone else in Ford’s European operations, Hayes has been responsible for changing the public’s perception of the company. In the early ‘60s Ford was regarded as a bit of a fuddy-duddy, making cars which were mostly dull and sometimes bad. People used to joke about Fords in much the same way as they would later about British Leyland cars. Gradually, though, he image was spruced up, partly through Ford’s commitment to motor sport and its performance edge. The question of image may be indeterminate, but it is crucial to any motor manufacturer’s prosperity. Hayes’ modesty prevents him from admitting the full scale of his role in upgrading Ford’s image, but company insiders say it has been immense.
Following his education at Hampton Grammar School and in the RAF as a cadet pilot, Hayes spent the first part of his working life on Fleet Street, being “shunted round” in various jobs with Associated Newspapers. After a rapid rise to associate editor at the Daily Mail, Lord Rothermere transferred him in 1956 to edit the former Sunday Dispatch, which at the time was considered rather scurrilous. Hayes was put in to clean it up, although it was, of course, only mildly sinful compared with some of today’s tabloids. His move to Ford of Britain came in 1962 after he had been head-hunted. But what could a newspaperman with little interest in cars do for Ford?
“There was an awareness at Ford that the world was changing,” says Hayes. “Sir Patrick Hennessy, then chairman of Ford of Britain, knew that he wanted someone to develop the public affairs function, but didn’t know who to approach. Lord Beaverbrook, whom Hennessy had known as Minister of Aircraft Production during the war, provided the contact. I was totally fascinated by what I saw at Dagenham. It seemed time for change, and I wasn’t sure that Fleet Street was going anywhere. The understanding was that if everything worked out I would go on the board of Ford of Britain fairly quickly.
“One aspect of Ford I found particularly attractive. There is a supposition that large, organised, traditional companies have rigid structures and firm ways of doing business – that adventure is not possible. But it always has been at Ford. If you have a good idea and the wit to sell it, you can do anything. I found a place so knee-deep in good young engineers and lively people that it was easy to set fire to things. The first man I really worked with was Terence Beckett (later chairman of Ford of Britain), and the young product planning chap on the Cortina was Alex Trotman.” Trotman is now reaching the end of his term as chairman of Ford of Europe.
Hayes’ rise was brisk. He was elected to the board of Ford of Britain in 1965, and later served on the boards of Ford in Germany, Switzerland and Belgium. When Henry Ford II decided in 1967 to draw the varied strands of Ford this side of the Atlantic into a single entity – Ford of Europe – Hayes was appointed vice-president, public affairs. Apart from an assignment to the US (also as vice-president, public affairs) between 1979-84, Hayes has been vice-chairman of Ford of Europe since 1976. ‘Public affairs’ figures large in his background, an amorphous concept which has prospered enormously because Henry Ford II, described by Hayes as “remarkably prescient’, regarded it as vital. But what is it?
When Henry Ford was dragged into the company from the US Navy at the age of 25, wet “Behind the ears, the company was losing $2 million a week and was in serious disarray,” Hayes says. “He realised that it was one thing to run a company within its four walls, but it was vital, too, to understand the environment in which it did its business. ‘Public affairs’, as we have called it, is best described as an all-encompassing external activity.” It covers far more than the straight business of public relations, government relationships (immensely important to a company of Ford’s size), long-term strategy, employee communications, motor sport and performance cars all fall under the public affairs umbrella as defined by Hayes.
Of all these areas his work, Hayes has been best known to the outside world for orchestrating Ford’s competition activities. Ford had shown little formal interest in motor sport when Hayes arrived in 1962; 10 years later it had a stronger world profile in racing and rallying than any other manufacturer. Under Hayes’ guidance, the company carved out a place at all levels. The incredible Ford-Cosworth DFV engine gave it a slice of grand prix image-building, and Ford GT40s won Le Mans four times. After early rallying successes with Cortina GTs and Lotus-Cortinas, the Escort built a formidable and lasting reputation in the hands of drivers like Timo Makinen, Roger Clark and Hannu Mikkola, winning world rally championships and even the World Cup rally. Escort Mexicos, twin-cams, RS1600s and RS2000s became favourite tools for club rally drivers and racers all over Europe. Formula Ford was born as a single-seater training category in 1967 and has remained so ever since. Escorts, Capris and Sierra Cosworths have had their spells of domination in international saloon car racing. Despite all this, Hayes claims never to have been a motor racing fan, nor even to have had an obsession that Ford should be involved in competition. He says that he was never particularly evident at big races, and only once attended a rally. Rather than being propelled by personal enthusiasm, Hayes saw motor sport as a means of enlarging the character of Ford products. He minimises his own role, throwing the credit on to talented allies like Stuart Turner, Colin Chapman, Ralph Broad and Alan Mann. He says that Ford spent astonishingly little money on motor sport.
“The operation prospered more on thought than money, success leading us onwards. After Cortinas and Escorts won just about everything which could be won, I kept looking for something more to do. But if you examine our motor sport activity you can see that we never really exploited it. We have never been like Honda today in Formula 1, with a really intense involvement. All through the ‘60s and ’70, I never spent more than $1 million a year on motor sport.
“I know that the Ford-Cosworth DFV engine has been portrayed as Ford’s great motor racing bargain, but I do get irritated when people tell me what I got for £100,000. In fact I got approval to spend $323,000, which wasn’t cheap. Neither did I have it as easy as everyone thinks. Keith Duckworth had never done an engine of his own before, and people kept telling me that a V8 was the wrong way to go when 12 or even 16 cylinders were the thing in Formula 1. And this was at a time in my career when I could have taken a backward step if it hadn’t worked.”
Colin Chapman’s name crops up regularly at Ford’s competition and performance fringes. First came the Lotus-Cortina (developed and built by Lotus), then Lotus went to Indianapolis with Ford engines, and finally the Cosworth DFV began life as a new engine for the Lotus 49. Hayes was the man who brought Chapman, an old friend, in to play for Ford.
“Colin’s association with Ford came about because I didn’t really know anyone else when I joined. I got to know him on the Sunday Dispatch when I decided I didn’t like the way motoring was covered in the paper, feeling that we should have a writer who really knew about cars. He was one of the bright young babies coming along, so I hired him as motoring editor. He started my enthusiasm for cars because you could never have lunch, tea or dinner without him grabbing paper napkins and drawing cars for you. “
Hand in hand with competition came a performance spin-off for road cars. It all began with the Lotus-Cortina, which resulted from Hayes’ suspicion that a great youth market for sporting saloons was developing. Growing demand for tuned Fords led Hayes to set up Advanced Vehicle Operations as a small development group and production facility able to bypass normal company systems. At its peak it made 2000 cars a year – mainly Escort derivatives like the Mexico and RS2000 – while giving Hayes the independent resources to produce performance prototypes, like rabbits out of a hat, to put before Ford’s product committee. Only with the ‘XR’ philosophy did performance models reach the volume to go down the regular assembly lines without causing a nuisance.
“Our aim was always to give the desire for performance, liveliness and character by modifying our basic cars rather than building anything more exotic. The principle has held very good for us, since XR-ism is now a very distinct flavour. The thing I learned very early on, largely because it is so deeply embedded in Ford, is that there are far more poor people than rich people. Affordable cars are the most important thing.”
Hayes feels that his name is linked primarily with pushing motor sport and Ford’s performance image because people like to try to personalise big company activities, and because no-one talks about the “dull stuff”. Whoever runs it is seen to be it. Yet motor sport, he says, has never accounted for more than four weeks of his working year. In other, perhaps more important, branches of public affairs, much of the dull stuff has meant dealing with government. Over the years, Hayes has moved in the highest political circles in Europe and the US – right up to prime ministerial and presidential level – keeping the lines of communications open.
“Generally speaking, governments want to do the right thing for their motor industries, but it is necessary for them to know all the considerations before they make decisions. Ford has a larger investment in the UK than any other manufacturer of any other kind. Motor manufacturers are a crucial part of the economy in so many countries in terms of jobs and the balance of trade; you can see this in France with Renault, Germany with Volkswagen and Italy with Fiat. Just as an example of the scale of Ford’s contribution, even our Bordeaux transmission plant exports more in value than the Bordeaux wine industry.
“We do not lobby to seek favours, but governments need to know what they should be doing for us. When we set up the plant to build Fiestas in Valencia, for example, the Spanish government had very rudimentary ideas about what they should be doing. There was no real industrial infrastructure, to the extent that we wondered whether we should even go there. Yet within two years Ford has become the largest foreign currency earner in the country.”
Government representations are doubly important today as the European Community shapes itself towards more harmonisation of policy. Common emissions and certification standards, if they can be achieved, will have an immense impact on reducing costs. Hayes estimates that producing engines to different specifications has so far cost Ford $500 million. As he puts it: “It does the baker a huge favour if regulations say that all cakes must have green icing and little red snowmen – he can get on with making nicer snowmen.” There speaks a man who has written two books for children.
Henry Ford II, says Hayes, was particularly perceptive in expecting big changes as the European Community took shape. In forming Ford of Europe in 1967, he was seeking to create in advance Ford’s own common market, like Cortina in the UK and Taunus in Germany, when tastes were broadly similar across Europe. Brainpower has always been a precious commodity – why waste the efforts of 3000 engineers in the UK and another 3000 in Germany on two cars when they could all concentrate on building one better one? Hayes has been intimately involved with Ford of Europe’s structural evolution, and with the development of its first pan-European car – the original Fiesta.
“Using our total European resources to crack this business of making a completely new small car was the process which showed us how to operate Ford of Europe. We started in 1969, seven years before Fiesta was launched, after spending many years thinking about how to manufacture small cars. The problem was that few companies could make a profit from them. The Mini is a notorious example of a car which lost money through most of its life, and Rootes never recovered from trying with the Imp to expand down from the bank manager class.
“It took us four years to work out how to do it with the Fiesta. We took every small car in the world to pieces, examined every component, analysed the processes by which they were made, and did an enormous amount of research into new manufacturing techniques. I believe it is our planning and understanding of the market which made Fiesta work and make money all the way through.”
The process of rationalising Ford’s European structure is still going on, and, currently prominent with the news that UK Sierra production is to be transferred to Genk in Belgium, leaving Dagenham occupied solely with assembly of the new Fiesta. Dismissing any suggestion that this might prejudice the Sierra’s appeal to patriotic fleet buyers, Hayes says that the benefit of dedicating each plant to a single role – whether building sub-assemblies or complete cars – is proven in productivity, cost and quality. Any local difficulty about the loss of 500 Dagenham jobs through natural wastage over the next five years is insufficient to deflect the evolution towards an integrated European business, and it angers Hayes that anyone should moan about one disadvantage to the UK while ignoring the advantages of Ford’s strategy.
“Huge investment is going into the UK, largely into Swansea, Bridgend, Belfast and Dagenham. The £725 million factory at Bridgend will be the greatest and most modern engine facility in the world. It is great news for the UK that Ford is strong and resourceful. None of the changes we are making will inhibit the British economy, in fact quite the contrary. And no-one seems to acknowledge the full fact that Ford has never had a compulsory redundancy.
“We are a European company, more European than any other manufacturer – 98 per cent of everything in our cars is spent in Europe. This dynamic European Community exists, but we must accept that it is not just our market. It is open to the manufacturers of the world, and to compete against them your quality and product must be as good or better, and costs must be at their level. Every manufacturer is fighting a tremendous cost battle which means that structural changes in the way cars are made are essential.
“We are investing heavily for future growth; $11 billion is going into Europe over the next five years because there is potential for plenty more growth above the current 12.1 million European market. In some southern European countries the growth has yet to begin. Everyone seems to forget that Turkey will soon be the largest country in Western Europe in terms of population, and in time a pacified Middle East will see great potential.”
Assessing the way social changes will realign future markets is an area in which Ford is strong, and in which Hayes has been one of the company’s most visionary thinkers. He can point to examples of how a changing market must be understood. With members of the post-war baby boom now moving through middle-age and many national birth rates falling, the time will come in much of Europe and the US when there is one retired person to every two in work, with huge implications for car-buying patters. The average couple in the UK once had 2.2 children and a Cortina; now it is 1.7 children and a slightly smaller car. Factors such as these are part of what Hayes means about Ford, and other manufacturers, having to understand their environment.
Rejecting any charge that the 12-year-old Fiesta is long overdue for replacement, Hayes argues that Ford’s disciplined thinking has enabled the car to consistently serve its market with accuracy and intelligence. It has been increasingly successful to the UK, with 1987 sales (153,453) its best year and 1988 (144,991) its second best. For all the superior ability of more modern rivals, the Fiesta has held its ground- its 3.2 per cent share of the European market in 1987 was identical to its 1977 share- because Ford has its finger on the pulse of its customers. The company’s internal jingle, ‘perceived customer value’, has directed the Fiesta along an upgraded-spec development path to preserve its appeal to buyers who, says Hayes, “have an almost instinctive ability to recognise good value for money”.
It seems that Ford – and Hayes as one of its key thinkers – also has an instinctive ability to judge markets. It knows exactly where the new Fiesta will be pitched in two months’ time. Small cars, or B-class cars in automotive jargon, are the great growth area. When the original Fiesta appeared, B-cars accounted for 1.8 million (19.2 per cent) of a 9.4 million European market. In 1987 the B-class had doubled to 3.4 million (30.6 per cent) of a 12.1 million market.
“In fact, it is hardly a class anymore,” says Hayes. “It is a type of car which appeals to rich and poor, young and old, single and married owners, even sporty owners. We think Fiesta is a classless car, with no specific personality which confines it to any particular market. I have even had two enquiries from friends asking for an early look to see if it is possible to have a Fiesta chauffeur-driven; the idea would have once been ridiculous.”
Over a quarter of a century in the upper echelons of Ford, Hayes has seen the motor industry change almost beyond recognition. Japan has emerged from nowhere, national industries have become multi-nationals, the possibilities and freedoms of the ‘60s have given way to the cost constraints and regulations of the ‘80s, and competition is more intense than ever before. He departs from a Ford which he sees as a “well conceived operation”, modest to the end about his part.
“Don’t paint me as a hero, will you?” he says. “The secret of success in the motor industry, as with other industries, is not what you do but who you are smart enough to get to work for you. I am an inveterate brain-picker; assimilating every idea that comes my way.”