Big changes at the top for Chrysler

Kai Ryssdal Sep 7, 2007

Big changes at the top for Chrysler

Kai Ryssdal Sep 7, 2007


Kai Ryssdal: Let’s say just for argument’s sake you buy yourself a car company. And let’s say, again, just for argument’s sake, it’s called Chrysler. You’d need some people to help you run it, right?

That’s exactly where Cerberus, the private equity group that actually did buy Chrysler, finds itself. In the past couple of weeks, they’ve hired some big name automotive talent. Including a guy named Jim Press, who until earlier this week ran North American operations for Toyota. A company that you might have noticed is doing pretty well selling cars.

We’ve called our own automotive talent, The New York Times’ Detroit bureau chief Micheline Maynard. Hi, Micki.

Micheline Maynard: Hi Kai, how are you?

Ryssdal: I’m all right, thanks. You know, all the talk since Cerberus bought Chrysler has been . . . they’re gonna flip it. Right, they’re a private equity group, they’re gonna buy it, strip it down and flip it. What do these hires tell you about whether or not that’s gonna happen?

Maynard: Well honestly, I was in the strip and flip camp myself, I was pretty sure that they were in here to make money and get out of the business in three years or so. But you don’t hire someone like Jim Press, who is one of the most respected auto executives in the business, if you’re going to strip and flip a company. I mean, this is someone who comes from Toyota, which, one of its founding principles is that you respect employees and you grow. So I think that’s a great reassurance that Cerberus isn’t coming to Detroit to take Chrysler apart.

Ryssdal: One of the other people they hired, though, was the marketing person from Lexus. Don’t they sorta need to work on product before they work on marketing?

Maynard: Well, I think one of the reasons that Deborah Wahl Meyer was hired is that she has worked closely with Jim Press, and that’s his specialty. And I think what they’re going to do is look at the Chrysler brands — Chrysler, Dodge and Jeep — and see what they can do about their identities. I mean, Dodge is known for being one of the most masculine brands in the business. Jeep had a great identity 10 years ago, but everybody’s got an SUV now, so how do you differentiate Jeep? And then with Chrysler, you know, they’ve tried a number of times to make it into more of a luxurious brand, and that hasn’t worked. And so I think they’re going to try to start over with some of these brands.

Ryssdal: What is Ron Gettelfinger, the head of the United Auto Workers, saying about this? There are negotiations going on, of course, about new contracts?

Maynard: Well my colleague, Nick Bunkley, was at a luncheon with Mr. Gettelfinger yesterday, and he said that Mr. Gettelfinger said this is a coup for Chrysler. But this is a great move, and he also said, you know kind of tongue-in-cheek, that he welcomes Mr. Press to Detroit and to the UAW. You know, that’s a jab at Toyota, which has a plant in California, where they have UAW members, but none of their other plants do.

Ryssdal: So do you think Press is gonna have what it takes negotiating with the UAW?

Maynard: Well, nobody really knows. One of the big mysteries this year is whether they’ll even pick a target company, one company to negotiate with, or whether they’re gonna come out and just say that they’ve reached a simultaneous agreement with all of the carmakers. And, you know, it’s only a week before the contracts expire, and there’s just a great veil that’s dropped over this whole process.

Ryssdal: Nick Bunkley had his lunch, you had your’s today with Mr. Nardelli. What was that like?

Maynard: Well, Mr. Nardelli spoke to a group called the Automotive Press Association here in Detroit. And you know, it was like a rock star. I’ve seen Bono myself, you know, I’ve seen the Pope myself, and Luciano Pavarotti, and this is kind of exactly what that was like. He had a hoard of reporters around him, cameras, lights — you know, it was sort of this moving amoeba trying to get out of the room. So . . . he’s actually overshadowed Alan Mulally. A year ago, Alan Mulally at Ford was the center of attention. And now, it’s Bob Nardelli.

Ryssdal: Did he say anything of substance?

Maynard: Yes, he absolutely did. One of the things that he said is that the new Chrysler board is going to meet in October. And they’re going to look at what’s going on in the economy and come up with a three-year plan for dealing with some of the softness in the economy. You know, having been at Home Depot, he’s very aware of the housing market, and he said there’s a direct link between what’s going on in housing and what’s going on in autos. And so I think they’re going to look at the economic indicators, they’re gonna see what they need to do to Chrysler’s restructuring, and then they’re also gonna look at the product plan and make some decisions about that.

Ryssdal: Micheline Maynard runs the Detroit Bureau for The New York Times. You can read more about Bob Nardelli online, I’m sure, and in the paper tomorrow morning. Micki, thanks a lot.

Maynard: Thanks a lot, Kai. Have a good weekend.

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