Dear Bob,
Congratulations on landing that job at Chrysler. You’ve got to be pumped.
I know you’ve already been a big shot executive of a huge company before, like at General Electric, and most recently at Home Depot, where you pulled in a cool $30 million in salary compensation last year before your big $200 million ‘golden parachute.’
Yeah, I know, not too shabby. But Bob, in case you hadn’t noticed, the top guy at Chrysler gets to be in… commercials! You’ll be following in the footsteps of those esteemed CEO thespians Lee Iacocca and Dieter Zetsche.
Zetsche had a decent stage name — Dr. Z — so you’ll have to come up with something equally cool. May I suggest something that celebrates your past history in hardware, like, “The Hammer.”
But now that you’re in the car biz, maybe you’re feeling you want to distance yourself from that gig. No such luck, Bob. The prospect of using home-renovation references for making headlines about the auto industry is a marriage made in metaphor heaven. Your Home Depot experience is going to stick to you like grout on a flannel shirt.
Let’s just hope we see more stuff like “Nardelli and Chrysler nail another sales increase” and less stuff like “Nardelli off to another cleanup in aisle three.”
But now on to the main point of my letter: to offer advice. I know, I know, you’re probably thinking, “Please don’t bother. Chrysler has lots of capable managers around, I have a few ideas myself, and there have been no shortage of non-Chrysler people throwing their two cents in since I arrived.” But I insist. And, unfortunately for all of us, you can’t stop me.
I guess people have been so generous with the advice because they noticed, as I did, that you haven’t worked in the car industry before. Not only that, your main rival for your job was Wolfgang Bernhard, a consummate “car guy” who now wants nothing to do with Chrysler. Your appointment also knocked Tom LaSorda down a peg, from CEO to Chief Operating Officer (COO), which meant the previous COO, Eric Ridenour, was left without a chair; Ridenour being another one of those “product” guys. So by my count, there are not too many Bob Lutz-esque “product” people running the show there at Chrysler.
People have also noticed that you report to a company called Cerberus Capital Management. I actually had not heard of this “private equity” company before it purchased Chrysler from Daimler-Benz. This is still something I need to get my head around. When I grew up, car companies where the biggest, baddest boys on the block, with more holdings than most middle-sized countries. They were the owners of things, never the own-ees.
“Private equity is very impatient money,” said analyst Maryann Keller in Automotive News. “They don’t have 10-year horizons. They like to take investments out in three to five years.”
Does that mean they’ll take all of the money out of Chrysler at that point? Or hope to transform the automaker into a prized machine by that time so others will want to pay big bucks for it?
Three to five years is hardly enough time for some R&D projects to pan out, so you may have already ruled out that path. But that’s where I’d put my investment money, Bob, into R&D, and most of it into powertrains and packaging. Automakers may seem like marketing machines most of the time, but they’re really engineering firms.
Chrysler has done well by pushing the styling envelope at times, so keep that up, but styling, by its nature, will be hit or miss. And it is subject, all of the time, to constantly changing tastes.
What’s moving the vehicle and how well it moves can be judged with more certainty by the rules of mathematics and physics.
Chrysler’s previous owner, Mercedes-Benz, seems to be doing all right, and it spends an exorbitant amount on under-the-hood and underbelly R&D.
I’m afraid you’re missing one great chance already. As you know, Bob, just before you came on board, Chrysler and Chery signed a deal to build cars together in China for export to North American markets and elsewhere. Under this deal, you and your dealers get a badly needed vehicle line at the low-end of the market, but the deal seems like it will benefit your Chinese partner more — long-term — than yourselves.
The first vehicle exported will be based on Chery’s A1 compact sedan and sold under the Dodge brand. Then you’ll team up for future vehicles. From what I read, those vehicles will feature Chrysler styling on a Chery platform.
Some analysts have felt that it would be better for Chrysler to go through this learning curve all by itself. It wouldn’t hurt, I guess, to know how to design and build competitive small vehicles for world markets. You don’t have that skill now, and it looks like, in three to five years’ time, Chery will be further along that curve than your gang at Chrysler.
I’ll shut up now and sign off by wishing you well. And remember, we’re always here for you Bob. Just call. Like those people in the orange aprons keep saying, “You can do it. We can help.”
Cordially,
MG
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Goodbye Jean and Alma!
This is the first issue of World of Wheels in the last five years that has not been created with the help of two great people — designer Jean Oh, and circulation specialist Alma Fronda. Guys, we wish you well in your new career paths, and thank you for all your contributions to the magazine and for making our work seem less like work. Oh no, looks like I’m gonna tear up again…