June 11, 2008
What Would Jack Do? Don't ask.
By Peter M. De Lorenzo
Detroit. In the worst economy seen in this country in decades and with the highest gasoline prices in history bringing the Detroit automakers literally to their knees, "Minimum Bob" Nardelli - the ex-Jack Welch/GE acolyte appointed by Cerberus to resurrect Chrysler - has officially pirouetted off the gang plank into the deep end of irrelevance with his latest misguided attempt at setting priorities for the beleaguered car company.
Tom Walsh from the Detroit Free Press reported last weekend that Chrysler was embarking on an in "intensive new leadership program" for its top 300 executives in keeping with Nardelli's blind adherence to the Jack Welchian-tinged mindset that's rampant at Cerberus, the financial company that's filled to the brim with ex-GE alums.
Hmmm, let's see, gas is heading for $5.00 per gallon, and the biggest news Chrysler has as a company is a new Dodge Ram Pickup due late this summer? Not exactly what I would call encouraging, to put it mildly. Not to mention the fact that Chrysler's quality ratings are in the toilet. And Nardelli determines that this is the best possible time to run his top executives through a leadership program?
How out-of-touch can this guy possibly be?
Beyond category out-of-touch, apparently. This is the guy who has been overwhelmed and overmatched ever since he hit the ground strolling in Auburn Hills. This is the guy, after all, who bristled with the cocky arrogance of his Cerberus handlers, even though he did his best, "Aw, shucks, we're just here to help" routine with the media and anyone else who would listen. And this is the guy who has managed to preside over the final dismantling of what at various times was a pretty damn good car company.
Cerberus has hit the wall with Chrysler. Clearly unprepared for having things not go its way, the company has run up against the one irrefutable High-Octane Truth about the car business, which is: No matter how successful you are in other arenas or endeavors, and how much money you've made along the way in whatever it is you are allegedly good at, the car business is unlike any other business in the world, and nothing - nothing - you've done up until this point can prepare you for the sheer complexity and daunting challenges of it.
When Cerberus decided to take a "flyer" on Chrysler, it assembled a "dream team" of managers who would get the thing up and running and headed to profitability in no time, at least that was The Plan. That they found out that assembling a dream team of managers was something altogether different from having them actually function as a team is surprising, given their alleged brilliance, but that's neither here nor there at this point. Suffice to say the bitter reality for Cerberus is that it is hopelessly at a loss as to what to do with the company.
That they picked the wrong guy, at the wrong time, for the wrong assignment to lead the charge was a key mistake, but it was only the second of many. Because when the basic idea behind the enterprise is flawed to begin with - that a bunch of money managers with no car business experience can resurrect a floundering car company in an industry decimated by the inertia of unprecedented change - there was literally no hope for this endeavor from the get-go.
Let's be clear here, the absolute last thing Chrysler management needs right now is some touchy-feely management program on "leadership." You do that when you're fat, happy and looking at six straight quarters of profitability and increased market share.
That doesn't apply in this case, not even close, as a matter of fact. When you're literally on the ropes and gasping for breath, like Chrysler is, there isn't a management training program on the face of the earth that will do you a lick of good.
That's something that the GE-addled brains at Cerberus just can't fathom, apparently.
Let me put it another way. This is not the time to consider "What Would Jack Do?" Jack doesn't have the first clue about the car business, and he wouldn't even know where to begin.
Memo to "Minimum Bob" and Cerberus:
You need product.
And you need customers.
And then, repeat after me: The Rest of it Doesn't Matter.
Thanks for listening, see you next Wednesday.