A Man and His Car Where have all the car guys gone?

Motor City Memo Importing Chiefs, Detroit Reflects on Its ‘Car Guys’ By MICHELINE MAYNARD Published: August 13, 2007 DETROIT, Aug. 12 — Where have all the car guys gone? Skip to next paragraph Rebecca Cook/Reuters Newly appointed Chrysler Chairman and Chief Executive Robert Nardelli. Enlarge This Image Enlarge This Image AP Photo Lee A. Iacocca, left, corporate vice president and general manager of Ford Motor Co., and Donald N. Frey, vice president, General Motors Ford Division of Ford Motor Co., stand in front of a 1960 Falcon, left and a 1965 Mustang in March 1965. With the surprise appointment last week of Robert L. Nardelli, the former Home Depot chief executive, to run Chrysler, Detroit has completed a new-model changeover of the executive suite. It is no longer a requirement to have “motor oil in your veins,” as they are fond of saying in this city, to run a car company. None of the chiefs now leading the three American car companies can be credited for inspiring or developing anything on the roads today — the unofficial definition of what makes a Detroit chief executive a true “car guy.” Only one of them, Rick Wagoner at General Motors, has more than a year of experience in the industry. Moreover, very few of their highest-ranking colleagues have come up through the design, engineering or marketing side of the business so vital to Detroit’s existence. It is a sharp break from a tradition stretching back to the industry’s infancy, when car builders became chiefs of the companies that bore their names. As recently as last decade, all three chief executives could brag about cars they had helped develop. Ford’s chief at the time, Donald E. Petersen, oversaw the Ford Taurus and earlier Fords. At G.M., Robert C. Stempel engineered several vehicles, including the Oldsmobile Toronado. And the most famous car guy of the time, Lee A. Iacocca, was credited with the success of Chrysler’s K-cars and its minivan (and the Mustang from a previous stint at Ford). As a marketing expert, though, he admittedly had others doing the actual development work. But people in some quarters now argue that an outsider’s pragmatic eye may be worth more than the gut instincts that come from bringing a car to life. Given that the Detroit automakers have lost billions of dollars, and market share, to Japanese competitors in recent years, the evidence may be on their side. Though car guys were responsible for Detroit’s triumphs, they also steered the companies into trouble with errors in judgment that included relying too heavily on big sport-utility vehicles. “This is a business that needs to be run as a business,” Alan R. Mulally, Ford’s chief executive, said at an industry conference last week near Traverse City, Mich. Even the now-retired Mr. Petersen, in a rare interview, agreed with that. “I think the concept’s been overdone,” he said last week of the car-guy mystique. By insisting that only homegrown talent be promoted, Mr. Petersen added, “it’s undervaluing the inherent knowledge that you get about how things do in fact work in a very complex industrial setting.” The appointment a year ago of Mr. Mulally, a former president of Boeing Commercial Airplanes, marked the first time an outsider had been appointed to run an auto company in Detroit, where lengthy careers at a single company are still the norm. Mr. Wagoner, for example, joined G.M. 30 years ago, and rose to chief financial officer in 1992 at age 39. By contrast, Mr. Nardelli has barely finished his first week as an automobile executive. His appointment has led to a kind of town hall discussion in the industry — in union halls, on Internet message boards and at an industry conference last week in northern Michigan — about who is best equipped to lead the industry out of its current troubles. The Detroit News asked readers to share their thoughts at its Web site after Mr. Nardelli’s appointment, and they had wide-ranging opinions about Chrysler’s future under its new owner, Cerberus Capital Management. “The whole industry has to stop pointing fingers at the rest of the world and instead decide what they can do,” said another reader from Troy, Mich. “It’s their industry. If they don’t fix it, it’s their jobs that go away.” Another was less confident in the new boss: “I’m terrified by what Nardelli and Cerberus could do to Chrysler.” Mr. Nardelli hoped to win over some skeptics about his background when he stressed his love for Chrysler products last Monday at a news conference — he said his garage included a Jeep, a Plymouth Prowler and a PT Cruiser. But Edward Lapham, executive editor of Automotive News, a trade publication, wrote on Wednesday that it would be a mistake for Mr. Nardelli “to assume that just because he likes cars, he’s a car guy.” Arturo Reyes, the president of United Automobile Workers Local 651 in Flint, Mich., said he was skeptical of Mr. Nardelli. “I get more excited about the prospect of a company when we’re talking about a car guy who has seen the manufacturing process, who knows the design team, who can talk about quality and everything else,” Mr. Reyes said. To be sure, there is not a car guy in charge at the world’s biggest car company, Toyota Motor, which passed G.M. earlier this year to take the No. 1 spot. In fact, it is difficult to name a traditional car guy at Toyota beyond the company’s founder, Kiichiro Toyoda, who acknowledged copying a Chevrolet design for Toyota’s first car, the AA, in 1936. Toyota’s top executives typically have a broad background, not a single expertise. Its current chief executive, Katsuaki Watanabe, is an economist and purchasing expert. The company’s emphasis on consensus also means an expert’s voice is only one of many when decisions are made, said James Lentz, an executive vice president at Toyota Motor Sales USA. “The days of just a car guy running with their gut feeling probably are, today, pretty difficult to do,” Mr. Lentz said. Robert A. Lutz, vice chairman of G.M., is perhaps the Detroit executive best known for a “golden gut” that led him to direct the development of vehicles like the 10-cylinder Dodge Viper sports car. He said last week that he was not opposed to the idea of industry outsiders at the top. “What you need is a well-balanced individual who has a lot of experience in the business, who has a brilliant business mind and knows what he or she doesn’t know,” he said at the automotive conference. “If a person from the outside incorporates all those things, then there’s no reason why he or she wouldn’t do well.” But Mr. Lutz cautioned that Mr. Nardelli, reportedly hired to speed Chrysler’s turnaround from $1.5 billion in losses last year, should not expect quick results. “If anyone thinks they’re going to get all that solved in three months, I wish them a lot of luck,” he said. A car guy’s background is invaluable in one sense, Mr. Petersen said. In an industry so focused on trying to predict trends, executives benefit from having both their own knowledge about the industry and experience in reading what other car guys are telling them. “Unless you know the business, you won’t know what can and can’t be done,” Mr. Petersen said. With a car background, “you have the basic ability to be able to challenge.” To Mr. Petersen, the debate over non-car guys reminds him of an earlier trend, when companies scurried to elevate their chief financial officers, believing that familiarity with Wall Street trumped operating know-how. For Detroit, Mr. Nardelli’s appointment will be “a very interesting experiment,” he said. Nick Bunkley contributed reporting from Acme, Mich., and Mary M. Chapman from Detroit.