Nick Scheele interview

MANAGEMENT TODAY

UK: The Davidson Interview - Nick Scheele. - The Jaguar chairman's flair for the theatrical is perhaps not surprising; he is the product of a school which counts many talented show-offs among its alumni. Such is his charisma, says Andrew Davidson, that m

The Jaguar chairman's flair for the theatrical is perhaps not surprising; he is the product of a school which counts many talented show-offs among its alumni. Such is his charisma, says Andrew Davidson, that managers of the company's suppliers fight to attend his meetings.

There are three things you notice quickly about Nick Scheele, the boss of Jaguar - his beautiful office, his dodgy hip and his elegant but rather rakish manner. Despite the German name, Scheele, 55, is as studiedly debonair and English as the actor Patrick Cargill, and when he says his passion is the theatre, there is little surprise. He is not at all what you expect of a car company boss; he has the confidence and poise of an actor who knows that he is on top of his game, and that his best part is yet to come.

Little wonder, then, that he has a reputation as the most eloquent speaker in the UK car industry. With 33 years on the clock of his career at Ford, Scheele (pronounced Shay-la) is described by others as a great motivator and a man manager who always pulls his teams through the bad times and deserves any success that comes his way.

That feel-good factor now extends to his company, as well. Jaguar, by global car company standards a small-money operation (50,000 units, £1.5 billion turnover) is now set for rapid expansion. Next month, its latest launch, the S-type, a retro-styled executive runaround aimed squarely at the BMW 5-series, hits the forecourts after a lot of favourable publicity. The year after, the company will unveil a 'babyJag', codenamed the X400, to compete with the BMW 3-series. It will be built at Ford's Halewood plant, the company's heavy mob, including Scheele, having squeezed another large chunk of taxpayers' money out of the British Government to keep production in the UK.

Scheele expects each of the new models to double Jaguar's sales volumes. You might think the threat of global recession would be enough to curdle the blood of any car boss, but if he's worried, Scheele, an affable, portly, silver-haired bear of a man, doesn't show it. He seems so jauntily optimistic that it is hard not to get swept along in his slipstream.

We meet at Jaguar's Browns Lane base in Coventry on a grey winter day. Into the main foyer, up the stairs, round the corner, and you enter the chairman's suite, the vast office built after the war for Sir William Lyons, Jaguar's founder. Think of I'm All Right, Jack, the Roy Boulting film starring Peter Sellers, and the kind of office a 1959 shop steward would expect a boss to have, and you get a fair idea of its conceit. There is lots of pale polished wood, a huge picture window overlooking the Jaguar main gates, and Lyons' old desk which is the size of a small hatchback and eats up about a third of the space at the back. An enormous meeting table runs along the window. Apparently Lyons liked a different arrangement with his desk by the window, so that he could watch his legions of workers trudging in and out. Nice proprietorial stuff.

Scheele shows me round, grey-blue eyes flashing, good at the warm stuff. The room reeks of history. It's not just Lyons. Sir John Egan and Geoffrey Robinson, both Jaguar bosses in their time, trod the same carpet. 'And this was Lyons', too,' Scheele grins, gesturing to a large veneered sideboard running down one wall. He speaks with a faint upper-class drawl that has shifted mid-Atlantic. 'I think it had a television in it. Maybe I should put it back.'

He turns awkwardly to the meeting table, spinning on one leg like an old sailor with a peg. Four years ago, when Jaguar was at its lowest and Scheele thought Ford was considering pulling the plug, he woke up at Christmas with a searing pain in his hip. The blood supply had cut off and his hip bone had died. Doctors said he needed a new hip. Now he has to wait till he is old enough to make an operation worthwhile (new hips don't last forever, and you can't keep putting them in). For the moment he makes do with dicky mobility. 'I can't even play tennis,' he shrugs glumly. But he can still drive and you suspect the handicap only adds to his renown, making him a sort of Sir Douglas Bader of the motor trade.

Scheele was at a Ford management meeting in Orlando, Florida - about as far away from Coventry as you can get - when he first heard that the company had bought Jaguar. He was a high-flying, British-born executive who had settled in North America and just made a name for himself in his first big management job, turning round Ford's loss-making operations in Mexico. Like any car-loving Brit, he knew a bit about Jaguar, the famous history, the botched attempt by British Leyland to revive it, the quality problems, but very little about what was going on inside the company. When another executive told him that Ford was going in, his first reaction was surprise. 'Two and a half billion dollars? I thought we must be nuts,' he says now. 'But it was none of my business was running Mexico. I had no knowledge of where Jaguar stood.'

It was nuts because, by some estimates, Jaguar's physical assets weren't worth much more than half a billion dollars in 1989. Ford forked out the rest for its brand value, hoping to use the marque to spearhead its drive into the luxury car sector. Then recession hit, Jaguar's problems deepened, and the trend away from up-market gas-guzzlers put a large question mark against the wisdom of the whole deal. First Ford put in one of its highest ranking British executives, Bill Hayden, vice-president manufacturing, Ford of Europe. Hayden, a tough-talking West Ham fan, was appalled at what he found (overmanning, underproducing, high level of fixed cost, sales falling to 22,000 units) and swiftly reduced the workforce from 12,500 to 6,000.

When Hayden retired, Ford then looked to put in a Brit with senior management experience of turning round operations. As Scheele tells it, he was just about the only one on their books. He had already taken out American citizenship, but back home he came, in 1992, to become the chairman and chief executive of Jaguar Cars. Seven years on, you can tell that he is firmly ensconced. This, he says, is where he wants to finish his career. Others suggest that, if Jaguar does as well in the next few years as some are predicting, Ford may have different plans for him. He is an eloquent internationalist and an ardent Europhile, and to keep him in Coventry, once the new cars are selling nicely, might be wasting his talents.

He is very pro-European, he says, simply because he was exposed to the Continent at an early age. His father, Werner James Scheele, who was born in Britain to German parents, worked for Tommy Bata, the great Czech shoe magnate, at his British works near Tilbury in Essex. The main languages on the Bata estate where he grew up were Czech, German and English. Scheele spoke German and French with his grandmother. He even went to school in France for a bit. No surprises, then, that he ended up a linguist, proficient in French and German among other languages.

He has a younger brother who works for Neil Kinnock at the European Commission, and an elder brother, a former chartered accountant, who jacked that in to run a boat-hire business in France for a time - so Europe clearly runs deep in the family's blood.

The flair for the theatrical may be nurture or nature. Certainly his school, Brentwood, the Essex public school with a reputation for producing talented show-offs (Hardy Amies, Griff Rhys-Jones, Douglas Adams and Noel Edmonds are among the alumni), played a part, as did Durham University, where his father's cash crisis - he lost his job - forced Scheele to support himself by playing poker and brag. You wouldn't have thought that in those days, 1962, the smoky clubs and casinos of the North East would have proved very welcoming to a flamboyant public school boy with a German name and cosmopolitan airs, but Scheele has always been a charismatic figure. He met his wife, Ros, on Day One of his university course. 'Well,' he says with a twinkle, 'there were only 20 people reading German.' And Scheele clearly has that rare ability to make those who meet him feel he really does like them and that he really is interested in what they have to say.

That ability is still a key quotient of his management style. John Neill, group chief executive of Unipart, who has been close to Scheele ever since his return to Britain, says he has noticed that his own managers fight to get into supplier meetings with the Jaguar boss - he is that charismatic. 'It's very unusual for somebody at his level. He is obviously an extremely clever man, but when he meets others he never intimidates them. He has got this energising way of getting on the same level as the people he is talking to. He makes demands of people, but they come out wanting to do things for him as if they were their own ideas.'

Why did he join Ford? At Durham, Scheele says with a laugh, he had 'a hell of a good time' and consequently got a third, so the civil service, which he had wanted to join, wouldn't take him, despite the fact he was in the top 12 of those who passed its special exam. He did the job rounds of companies such as IBM, Shell, BP, even C&A and Debenhams, but plumped for Ford because he could start in July and live in Essex.

From the first day he loved it. 'One of the problems of a conveyor-belt education system is that you are just carried along with the tide,' he says. 'For the first time, I felt I was actually doing something.' That something, in the early days, was the launch of the second-generation Cortina and dealing with suppliers.

'It was absolutely fascinating,' he says. 'You had to make your priorities their priorities.' And he has, apparently, been very good at that ever since.

After that it was, he says, a fairly smooth ride up the Ford ladder with just a few blips on the way. In the early 1970s he was offered a small fortune by Massey Ferguson to run its operations in Germany. He was working as vice-president, supply, for Ford Europe at the time. He hummed and hawed, nearly put the house on the market, then didn't. 'I couldn't bring myself to do it,' he says. 'I really believed Ford would take care of me.'

A year later Ford asked him to go to America. He had two kids and Ros was six months' pregnant, but they decided that, this time, they had to make the jump. It was supposed to be for two years but he liked it so much there - bigger company, greater pace, more models, more excitement - that, until Jaguar popped up, he didn't think he was likely to work in this country again.

That all changed when the stint running Ford's operations in Mexico, his first taste of general management, made everyone sit up and notice. Until then, says an ex-colleague, his work in purchasing had kept him out of the main swim of things at Ford. Then, as the multinational was reeling from recession in its home market, Scheele came up with the goods south of the border. He says some of it was down to luck. 'I found out there was going to be a price freeze in Mexico and we managed to get our new prices in before the freeze came down, and that gave us a huge advantage.' Scheele, as subsequent events have proven, is something of a dab hand at squeezing what he wants out of politicians.

Jaguar was more of a shock. His overriding memory of his first few months in Coventry is of people continually telling him '... but Jaguar has always done it this way'. Then, soon after he arrived, Jaguar 'plunged over the precipice' as its problems with cost base and quality got progressively worse.

It was the lowest moment of his corporate life. The company was losing $1million a day. 'I did feel we were reaching a situation where we had to ask, "Were we recoverable?" I remember sitting here wondering if we would ever see light at the end of the tunnel. It was a horrible, horrible time.'

What kept him going? 'The fact that there were 6,000 people here whose fortunes depended on it. And, to be perfectly honest, I wanted to stuff down people's throats some of the stories written about Ford buying Jaguar; I wanted people to acknowledge it was the right strategic decision.'

So, to use his own phrase, he really rolled the dice in 1993, staking everything on Jaguar's replacement saloon car, today's XJ series. 'We put the whole company behind delivering this car on time, on cost, and with a huge amount of change.' When he told dealers to have faith, he saw them yawning. 'They had heard all this crap before from Jaguar management, but we did it, and it was well received, and that was the turning point.'

Since then Jaguar has been earning plaudits rather than brickbats for its new cars and is now in its fourth year of profit (although it doesn't release the figures). Crucially, British bosses who had abandoned the marque as their car of choice in the early 1990s were suddenly proud to be driving Jaguars again. That makes Scheele confident that the company can now, finally, broaden its market from a solid foundation, starting with the S-type, whose £28,000-upwards price bracket could bring in a whole new load of Jaguar buyers.

Why has he been successful at Jaguar? Bruce Blythe, one of the Ford executives who negotiated the original Jaguar deal, says Scheele's unique talents have fitted the job like a glove and he has grown in stature as each year has gone by. 'The thing is, Nick is not your typical car company boss.

They tend to be very intense, focused individuals, always trying to squeeze the last dollar out of every model, never keen to delegate. Nick is not like that. Jaguar has brought out a whole load of skills that he couldn't utilise before. He is happy to delegate and walk away, and he has handled Ford so well. He has got the best of what Ford can offer for Jaguar.'

That, according to Scheele, means just the right amount of financial expertise and engineering know-how, imported without swamping Jaguar's uniquely British feel. It sounds too good to be true. I ask Scheele: so is it like BMW and Rover? Does Ford have to sign off the new designs?

For the only time in our meeting, Scheele seems suddenly nervous. His eyes wander anxiously to my tape recorder. 'Er, Christ, no, it's not like that. We, er, tell them what we want to do, and they question us on the numbers. Our chief stylist would not take kindly to somebody from Ford telling him how to design a Jaguar. We actually don't have many Ford people in here. It's basically Jag people. It's pretty much a quasi-independent company.' And, he points out, the Ford family, which still owns a controlling stake in the company, are Jaguar nuts, as is Jack Nasser, the new Ford chief executive who also sits on the Jaguar board. 'He is passionately in love with Jaguar,' says Scheele proudly, adding, 'He has an E-type and a Mark 2.' The Mark 2, of course, is the post-war Jaguar model which the new S-type so closely resembles.

Scheele has also been brilliant at squeezing money out of the Government. The S-type soaked up £72 million in grants, keeping production in nearby Castle Bromwich. The X400 will get £42 million. Just about every Jaguar model since Scheele's arrival has had some taxpayer money in it. Can't Ford afford to bankroll the models itself? Of course it can, but the argument is that Ford would rather produce Jaguars more cheaply somewhere else, and anyway, Jaguar pays for itself now, give or take a bit of the taxpayer's money. Does he still harbour ambitions within Ford? No, says Scheele, he never really wanted to get to the very top of the corporation and he certainly doesn't feel sidetracked. 'I don't want to be chairman of Ford and, to be honest, I don't think I ever will be. I just want to run my own show.' Anyway, now that he is living in Britain again with a big house near Stratford-on-Avon and a flat in London, he doesn't feel he can move back to America (though he still owns a holiday house outside Detroit). Being here is great, he says. He loves the great theatre, the music, the food in London (Sorry, Coventry), the accessibility of the fantastic countryside.

But if they offered him one of the really big jobs? 'Ahhh,' he says, gazing out the huge picture window at the spanking new Jaguar museum standing proudly by the old gates. There is silence. It is the only significant pause in his flow during the whole interview. 'I probably wouldn't accept it,' he says eventually, as if wrestling with himself deep down. 'No, I probably wouldn't ...'

Friends say he would be mad to move, especially as, after nearly a decade running Jaguar as a semi-autonomous fiefdom that now soaks up a lot of admiration and respect, Scheele would find it hard to go back to a global desk job. And yet, his two sons are still in America (his daughter is back in Britain) and he lets slip that he keeps two passports, as if he can't quite make up his mind where he wants to settle. I wonder.

It would be churlish not to wish him well. Everybody I spoke to wants Scheele to succeed, not just because deep down most Brits love his car marque, but also because as a boss he is genuinely liked and respected. He is particularly good at running Jaguar's external relations, whether it is putting in the hours for the motor industry charities or turning up for the classic Jag owners' clubs (he gave his wife an old Daimler) or working for Business in the Community to help alleviate problems on Coventry's Foleshill estate, designated one of the 10 most deprived areas in England. Justifying Jaguar's place in the local community, something he picked up from Ford in America, is very important to him and, he admits, he is rather shocked that it was neglected before. Nor, he adds, does he find any conflict between selling posh vehicles to the rich and trying to solve problems on sink estates. 'We are producing a product some people want to buy,' he says firmly. 'It is also one that many people will not be able to buy, but our job is to produce an attractive product that will, in turn, produce jobs.'

To sum up, says another old colleague, through sheer force of personality, Scheele has turned running Jaguar from a position no one in their right mind would want into probably the best job in (what's left of) the British car industry. If he hits his targets, and Ford finally achieves its acquisition strategy, it will definitely be the best. But - and this is a big but - these are fantastically bullish targets. To move from 50,000 cars today to over 200,000 by 2002, just as the global economy is slowing down, looks a tall order. What if he fails to hit the targets? Will he fall on his sword? This time Scheele doesn't smile. 'We will hit them,' he says. 'Really, we will. I have never had a doubt. We are going to make this company a great British success.'

Then his rather jowled face breaks again into the confident half-moon grin. If he is worried, he is far too good a performer to show it, especially with so much still to play for.

BIOGRAPHICAL NOTES

1944:
Born 3 January in Essex
Educated Brentwood School and Durham University
1966:
Graduate trainee, purchasing, supply and procurement, Ford of Britain
1978:
Executive, purchasing supply and procurement, Ford USA
1983:
Director, supply policy and planning, Ford USA
1985:
Director, body and chassis parts purchasing, Ford USA
1988:
President, Ford of Mexico
1992:
Vice-chairman, Jaguar Cars
1992:
Chairman and chief executive, Jaguar Cars
1996:
Midlands Businessman of the Year

WHAT PEOPLE SAY

'What you get with Nick is not pretence. He is a genuinely affable, naturally engaging guy. He is very articulate, an excellent speaker, a good people-person. There's a lot of theatre in him, too. You can imagine that he lived the good life, and still does.'

Viv Thomas, chairman of BSI and a non-executive director of Jaguar

'It is characteristic of Western car company managers that they are very macho; they always nickel and dime you after every agreement. Nick is unusual. He is like the Japanese; he is totally straightforward and always does what he says. That doesn't mean he is a soft touch. It just means that if he makes an agreement, he will honour it.'

John Neill, group chief executive, Unipart

'Nick is not your typical car company boss. Jaguar has brought out a whole load of skills that he couldn't utilise before.'

Bruce Blythe, former Ford executive and a non-executive director of Jaguar

'Nick has more panache than most car company bosses. He is ebullient and charismatic ... but I am sure that his democratic demeanour turns into autocracy inside the company. You can tell he has got a backbone of stainless steel. You just don't see it behind the smile.'

John Maxwell, director general of the Automobile Association.