Last Sunday 60 Minutes did a story on Chrysler’s great comeback since Sergio Marchionne of Fiat took the reins of the company in 2009. When Marchionne came on, Chrysler used a $6 billion high interest loan from the U.S. Treasury to modernize the company’s plants with state of the art equipment, upgrade 16 existing car models in just 18 months and begin integrating Chrysler and Fiat’s operations. Last year Chrysler turned a $1.83 billion profit and paid back its $6 billion federal bailout six years ahead of time.
When Marchionne came on, one of the first things he did was overhaul the company’s hierarchical management structure. He appointed 26 new young leaders from within the company, many of whom had not previously been at the top of the food chain, to report to him directly. He then vacated the chairman’s office on the top floor of Chrysler headquarters and moved his office to the floor with the engineers so he could better connect with the people designing the products. The revitalized company has recently come up with ingenious advertising campaigns such as the Superbowl ad with Clint Eastwood and the “Imported from Detroit” commercial featuring rapper Eminem.
Marchionne’s story at Chrysler reminds me of Theo Epstein’s recent hiring as the Chicago Cubs new President of Baseball Operations. Epstein, the man who many credit with ending the Boston Red Sox “Curse of the Bambino,” immediately cleaned house, keeping only a handful of front office people from the previous Cubs regime. He then assembled a management team composed of several guys from his former Boston and San Diego stints. This offseason, in a matter of months, the Cubs went from having the smallest management team in the Majors to having one of the largest with an army of scouts. Epstein quickly cut large salaried players and traded a few popular ones for players he considered undervalued. He hired Dale Sveum as the new manager, a coach with a decent baseball pedigree but definitely not the sexiest crowd pleasing candidate available. Epstein believes that Sveum will change the team’s culture to emphasize fielding fundamentals and accountability, the basics it appears the team has lost.
Epstein and Marchionne were brought in to run the Cubs and Chrysler because the organizations needed a reboot. Quick fixes just wouldn’t cut it anymore. Radical, fundamental change was the only choice to succeed.
Why do people believe these guys will succeed where so many others have failed? Because they don’t have the same handcuffs which hinder most managers. They appear to have no fear to try new radical things even if it may mean hurting feelings, laying people off, creating a lot of new work, or just failing in front of everyone.
Most people are inclined to make decisions based on “how things have always been done,” and much of the time we are unconscious that this is the basis for our decisions. People also make wrong decisions because trying new things, although exciting, is scary. The Cubs will probably have to lose a bunch of games before they start to dominate. Maybe the next new Chrysler model will be an Aztec. The greats can deal with these possibilities.
Take a step back and examine your business, or your personal life for that matter. Are you too scared to make changes which likely are imperative to succeed and be happy? Do you have the guts to make decisions like a turnaround master? I need to work that out with my shrink next week.
Question 1: Which will happen first, Chrysler is Number 1 in American car sales, or the Cubs win the World Series?
Question 2: Does using Clint Eastwood and Eminem to advertise cars offend you?
First, sorry to all my Northside Chicago friends, but Chrysler will be number 1 before the Cubs win a World Series. The Curse of the Bambino for Boston lasted a long time, and that didn’t involve a reall curse, such a with the Cubs.
Second, I was not offended by either Clint Eastwood or Eminem being used to advertise cars. In many cases I am offended by the stupidity of ads, but these were not stupid and heck, I’m from Detroit anyway, so you wanna make something of it, go ahead and make my day – oh wait a minute, I’m mixing metaphors.
I thought the last couple big ads from Chrysler were very good. I’m also from Detroit, and felt a lot of pride in the commercials. I’m sure that was their aim. I also thought their online ad stunt last year was very creative, and fits the theme of your article Noah. Three Dodge Journeys were hidden around the country and the clues were given away on Facebook, YouTube and the Dodge website. Even though it felt ‘gimmicky’ in the beginning, by the end of the week, our whole family was checking the live YouTube feed to see if anyone found it. If they can keep building cars as well as their entertaining us they’ll do great.
As a former advertising student in my past life I really love the vibe of the ads, but as a father of 6 I would personally like to see a better role model than that filthy mouthed sneering Eminem…(love Clint, though)
After all of the unconstitutional semantics perpetrated by Washington with the bailout, the false metrics used to show “early payback”, the blatant favoritism shown by the current administration in their “serendipitous” and flagrantly corrupt closing of private sector car dealeships…well, lets just say Ford is all I plan on buying from now on (used to drive Dodge – my last 2 purchases post “bailout” have been Fords.
The ads were nothing short of inspired. Chrysler will be #1 before the Cubs win the Series. (This from a North Side Chicago native.)
The auto industry bailout was a smashing success, which along with other measures taken by both the current and previous administration, saved the world economy from a total meltdown. Don’t know what I’ll buy next, but Chrysler will be high on my list. Marchionne reminds me of Iococca, especially when he paid the loan back so far ahead of time.
Turning around an organization of maybe 1000 employees has to be easier than changing the culture at a firm with 50,000 employees, so I am betting the Cubs win this one. Marchionne has definitely impressed so far and I am definitely rooting for Chrysler, but to keep up with all his direct reports for an extended period of time seems like a formula to end up in a train wreck.
Best bet – bet on the Cubs. I like what Marchionne has done, and I am considering Chrysler as my next car purchase. If the Cubs have an IPO iI would buy it in a New York Second.
I’m a Cardinals fan, and would still bet on the Cubs for this one. Chrysler’s turnaround is impressive, but they’ll never be number one. They are Pepsi. They are Wendy’s. Garfunkel. Yeah, it’s been 103 years for the Cubs (but who’s counting). That only means they’re due.
Another turnaround king, ironically enough, is also from the auto industry. Alan Mulally brought Ford back into profitability and saved them from relying on a government bailout. But he made controversial decisions along the way. Gotta admire his vision and his guts.
My hometown is Chicago – so Cubs winning the series will happen in my lifetime.
Really enjoyed Clint’s commercial – Ads really made a statement!
New Chrysler Video out today, another winner: http://youtu.be/RNxjp2_-poI
Reference: Chrysler as #1 in sales and Cubbies winning the series? I have another question. For one of them to happen first, wouldn’t one of them have to happen? Since neither will ever happen, the question is moot! (grinning Giants fan!) And as far as the Eastwood and Eminem commercials? Long ago I stopped being offended by commercials, except, maybe the “digestive” ones. Those still offend me.
I am on my 3rd. Dakota. Best truck I ever owned for its size fits me perfectly and with plenty of POWER. Hope they do not drop the line.
Charity begins at home, not automotive companies.
My business we live on what we make not what the taxpayers can furnish at the expense of bond holders. Good to see the unions got what they needed. As for Clint hope he got paid and cashed the check. Eminem not much to say about a degenerate but then I suppose Chrysler is proud of him.
My daughter Leslie grew up as a gearhead and knows her way around a shop. Last year she purchased a 2003 Dodge Viper and gave me a demo ride. At 4500 RPM in 3rd gear, I was plastered into the passenger seat by the G-force of acceleration.
The LAST thought on my mind was baseball.