That is, he will be chair once the company emerges from bankruptcy, possibly late this summer. This is a man who has no experience whatsoever outside AT&T and Southwestern Bell.
That is startling in itself, and twenty years ago, would have seemed impossible. But do you know what the really bizarre part is?
This wasn’t the top story in Detroit this morning. That wasn’t even the top automotive story. That honor goes to the Fiat-Chrysler merger. U.S. Supreme Court Justice Ruth Bader Ginsburg held up the deal Monday, but late yesterday, the full court said go ahead.
So we have to hope now that this turns out to be a better marriage than Chrysler’s first two disastrous trips to the altar, first, with Daimler, and then with Cerberus.
The one thing everyone agrees on is that this girl can’t survive a third bad marriage.
What is not clear, exactly, is how this one will work after today’s ceremony. We know that as a wedding present, the government will give the combined Fiat-Chrysler another $ 4 billion in loans. We also know that there will be a dowry.
A bunch of private lenders, including banks and hedge and pension funds will get $2 billion dollars to settle debts of almost $7 billion the old Chrysler owes them.
What the new entity will look like wasn’t at all clear this morning. Right now, Chrysler is dead in the water. It hasn’t produced a single vehicle, engine or transmission since the end of April. Nor do we know when they will start again.
That’s now up to Sergio Marchionne, Fiat’s chairman. Some fear that his real desire is to just phase out Chrysler and use the dealer network to distribute Fiat cars. That seems unlikely, at least for a long while. Fiat had such quality problems in the past that the joke was the name was really an acronym for, “Fix it Again, Tony.”
What people hope is that there will some kind of synergy or symbiotic energy that improves both families of vehicles. Most of all, what they hope is that the jobs of the nearly sixty thousand Chrysler workers will be safe, at least for the foreseeable future.
As for General Motors, it seems clear that picking a chairman from outside the automotive sector was inspired by Ford’s choice of Boeing’s Alan Mulally three years ago, a move that in retrospect seems brilliant. Whitacre is, by accounts, tough as nails.
The next few years at GM are not likely to be comfortable, nor should they be. By the way, here’s another indication of the state of the auto industry. Guess what the top selling car was last year in the United States. Sorry, you lose. It was a plastic car for toddlers to sit in, the Little Tikes Cozy Coupe. It sold 457,000 last year.
One of Detroit’s goals is to try to take back the lead.
Alan Mulally( no auto chops airplanes are not cars)has made millions since Ford made him the savior and last I checked they were not selling cars either..
Clearly the new CEO of the Board is nothing more than a cosmetic move same as Mulally at end of the day...
We need to deal with reality the growth and transformative change for the state is in MASS TRANSIT not CARS!!!!!!!!!
Posted by: Thrasher | June 10, 2009 at 02:54 PM