There’s nothing like a deal – especially one that rescues companies seeking survival – to spark spin about executive leadership. And nowhere is the posturing more apparent than among Detroit’s automakers.
With unprecedented gas prices, showroom floors over-stocked with inventory, and enormous competitive threats from once-distant foreign rivals, the traditional “Big Three” are on a perpetual quest for respect from their shareholders, industry experts, and consumers.
Far too often, however, the mantra is more about the guys in charge and less about the cars that drive success.
From the days of Henry Ford pioneering America’s new horse and buggy, auto industry personalities have become legendary. Lee Iacocca became the salvation of Chrysler – the first time – and for some, America itself as he broke new ground in corporate marketing as CEO-pitchman in television commercials draped in patriotism.
GM and Ford caught on. Not only did they need better vehicles, but they needed flashier executives who could capture headlines too. They tried with the likes of Jose Ignacio Lopez, Bob Lutz, Jacques Nasser, Bill Ford, Jr., and now Allan Mullaly. Yet, through it all, Chrysler takes the prize for leadership spin.
Remember the “Merger of Equals”? A German company known for its quality, zeal for perfection, and Mercedes nameplate claimed it would set its domineering spirit aside and stand side-by-side with the number three of the Big Three. It became pretty clear pretty quickly that many including the UAW had been sucked into the spin.
Ultimately, DaimlerChrysler’s CEO Dr. Z became a pitchman too, but focus groups revealed the public didn’t really believe he was the CEO. Fortunately, there also was more change back in Germany and in 2006 Dr. Z found his way to the true top job, replacing Jurgen Schrempf. In doing so he stole the spot that former Chrysler Group COO Wolfgang Bernhard had coveted. As 2007 began, Dr. Z confirmed that the “For Sale” sign was up at DaimlerChrysler. Sales slumped. Rumors of suitors from GM to Kirk Kerkorian, to parts-maker Magna International and The Blackstone Group danced through the headlines for months.
Just last week it was announced that Cerberus Capital Management, a NY-based investment firm, will buy Chrysler for only $7.4 billion and take it private.
Cerberus Chairman John Snow hired Wolfgang Bernhard who is legendary for revving his Hemi’s at auto shows worldwide as a “consultant to help arrange the sale”. Snow said that Bernhard wouldn’t join Chrysler’s management team but he and Chrysler’s Tom LaSorda will “work well together as they’ve done in the past”.
Yet, CEO LaSorda made certain in his media interviews that writers world-wide knew Wolfgang Bernard was a “great guy and close friend” … but a “bench player”. “He was hired by Cerberus as a consultant and works for Cerberus, not the Chrysler executive team,” proclaimed LaSorda.
Time will tell. Is it really about the cars or all the spin about who’s at the top? — Shawn Kahle