We made an honest stab at choosing a Person of the Year. We always start by calling the award Person of the Year, because I’m a woman and so are four others on the staff. No one wants to hurt our collective girlie feelings by intimating from the get-go that there couldn’t possibly be a single woman who had a life-changing impact on the car industry this past year. Never mind that there wasn’t one. Maybe if Deborah Meyer, when she jumped ship from Toyota, had joined Chrysler as chairman instead of marketing chief, killed five really dumb car lines immediately, then fired the head of design and hired Walter de’Silva away from VW, she would have had a real shot at it.
Didn’t happen. Then again, Bob Nardelli – the non-car guy whom the supersecret, private-equity moneybags in New York chose to run Chrysler – didn’t step up to that ugly but necessary task, either. No cigar, Bob, but between you and Chrysler co-president Jim Press – whose defection from Toyota was even more shocking than your appointment – there’s huge potential for the 2009 Chrysler trophy case if you make the tough calls and pull off a save.
To be fair, running a Detroit-based car company has required nothing but an endless series of tough calls for the past couple of years. We can’t help but think that our eventual hero is going to emerge from Detroit’s smoking wreckage of overpaid workers, fat bureaucracies, glut of factories, bloat of sport-utes, and boring cars that no one wanted. Never mind Man of the Year – fixing everything that’s wrong in Detroit should be worthy of sainthood.
So far, Rick Wagoner is in the lead, mostly because he’s been working the fix at General Motors long enough to have brought mighty GM back from the edge of the cliff while Ford and Chrysler were still barreling straight for the abyss. Two years ago, GM lost more than $10 billion. Despite relentless attention from the national media (GM has been to the business press what Britney Spears is to the gossip rags), Wagoner and vice chairman Bob Lutz (our Man of the Year in 1993, when he helped preside over the golden age of Chrysler) have standardized manufacturing around the world; rassled a contract with the UAW that could save billions annually; emerged from the shadows with class-leading and award-winning clean-energy technologies; and, most important, produced a string of cars that are drawing people back to showrooms. Between them, Wagoner and Lutz have delicately defused the ticking bomb.
They can hardly afford to rest on their laurels, though, due to potential buzz killers like a liver-quivering $39 billion loss in the third quarter of 2007 (blamed on unused tax credits and a loss at its former finance unit, GMAC), pending $4-a-gallon gas, and the nationwide housing market collapse.
Bill Ford, of Ford, could have won our Man of the Year award for finally throwing in the towel and bringing in the cavalry in the person of Boeing turnaround hero Alan Mulally. If only Billy hadn’t waited so long that his own family had grown mutinous as the Ford Motor Company’s stock price slid into single digits. So, how about Mulally? He jumped into the soup sixteen months ago with his curious combination of Kansas cornpone smiley face (was it because of the $39.1 million he made for the four months he worked in 2006?); a penchant for speaking sensibly to the press; and what we hear is steely, ball-cutting nerve in private. He managed to transform Ford’s executive team (most of whom he magnanimously spared the ax) from a group that was best described as being “the backstabbing Borgias meet the kneecapping Medicis” into some semblance of team players.
Mulally also accelerated massive job cuts; sold Aston Martin and put Jaguar and Land Rover on the block; wrapped loving arms around the entire dealer body; jumped successfully on the UAW give-back freight train; took a mighty whack at overcapacity; and mortgaged the entire company to finance his brand-new Way Way Forward plan.
Mulally is ahead of his own schedule, and J. D. Power and Consumer Reports love the cars. But sales are still slow in North America. The first three quarters of 2007 closed with losses, but a $1 billion third-quarter loss in Ford’s North American auto unit was a whole billion and a bunch of millions better than last year’s $2.1 billion loss for that quarter. Yes, the cars are better, but Ford needs more hot metal sooner, and we’re not seeing enough of that in our crystal ball.
Back to Chrysler, the furthest behind when Cerberus Capital Management swooped in. We were all swaggering about how cool it was that Cerberus’s star consultant, Wolfgang Bernhard, would now run Chrysler – we figured the company was all but saved. Oops. No Wolfie. Cerberus head Steve Feinberg instead brought in Nardelli, an outside business guy so tough, Gentleman Jim Press was needed to counter Nardelli’s bad-guy rep. It’s been mere months, but the new Chrysler has already nailed the UAW, which caved to reality after a brief hissy fit of a strike. Nardelli and team are now addressing overcapacity, too many employees, and expansion in Asia.
Now, about those cars no one wants . . .
Stay tuned. There will be a 2009 Man of the Year when the dust clears. With any luck, he will be a hometown hero.