Chrysler Chills: Is this Thermal Denial?

February 18, 2007

Sunset
Ford and GM have shed nearly eighty thousand jobs. Chrysler now announces another 13,000 job cuts in North America. Chrysler/Daimler faces a tricky future as its head, Dieter Zetsche, weighs up all options for the ailing partnership. Against the growing reality of the job-cuts we ask: is there still thermal denial in the American auto-industry?

The overall story is now well-established. The mighty auto-industry in America is in a tailspin. There is a sense of the decline and fall of the Fordist Empire. Some of us learned that was caused by enemies within, as much as enemies from outside. Which translated points to the fiendish plot by Foreign-owned auto-companies to metamorphose into American companies.

Sales and sales projections say that big is not as beautiful as it was. It seems likely that the invaders such as Toyota can probably scale upwards in the new midi- or cross-over utility vehicle market more easily than the American auto-giants can scale down into the market.

Meanwhile at the Detroit Show

Meanwhile, the Detroit show recently indicated the approach to the market from the ailing giants. Chrysler could claim to have played a big part in creating the market for the rather large People Carriers. Tom LaSorda, head of the American Chrysler division of the partnership said as much at the show. He also indicated that the future product the company was backing was …The Grand Caravan, another people carrier.

In a sideshow, the Corporation’s chief economist was offering another interesting take on its thinking. Van Jolissaint described a gulf between views he found prevalent in Europe, and those in the States. He was dismissive of the Stern report and suggested that climate change was “way, way in the future, with a high degree of uncertainty”. He added for good measure that the Europeans appeared to be suffering from a quasi-hysterical condition producing Chicken Little behavior, running around saying the sky was falling in. The audience from within the auto-industry seemed to find both solace and confirmation of the correctness of its own views from his argument.

It may have escaped the notice of the audience that the Chrysler part of the partnership was performing particularly weakly, with strongest performance from the European Mercedes-Benz car and truck operations.

After the Show was over …

After the Show was over the auto-makers returned to their beleaguered manufacturing bases, and economists to wherever economists return to (Platonia? Milton Freedonia? Maynardsville?).

Then on Valentine’s day (of all days), Chrysler announces 13,000 job losses. The Chrysler Chief (sounds like part of a music group) is pressed about the future of the American side of the partnership. Dieter Zetsche, for it is he, indicated that he would be exploring all options with new partners.

But Mr Zetsche who used to run Chrysler, has also been engaged in a little denying. According to the BBC:
Mr Zetsche denies any plans to sell the company and pointed out that its problems could be temporary and cyclical .. “No one knows if there is a long-term shift in trends”

So what’s going on?

From a leadership perspective, who would wish to be in change of a global car operation at present? There are a very small number of names who are frequently mentioned as today’s super-leaders, and inheritors of the mantle of earlier greats. Am I right in thinking that the names are largely non-American? If so, is that not puzzling? And who will be in change of whatever is left of Chrysler a few years down the line? Probably not Mr. LaSorda, and that’s not at all because he bears an uncommon resemblance to another once powerful leader. I will leave that as a little challenge to anyone interested.

And why do I think the current crop of successful Auto-chiefs are not American? I hesitate even to offer the most tentative of hypotheses. I am still trying to work out why there are have been so few great English football managers, and such a statistical surfeit of Scottish ones. Or am I wrong about that as well?


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