Daniel Howes: Zetsche's about-face feels like betrayal in Detroit
H e appeared to be more Detroit than Germany, or so many of us came to believe.
He was supposed to be Chrysler's protector back in Stuttgart, the mustachioed Mercedes-Benz veteran who learned what the Americans could do, how their market and its pressures were different, how the pentastar and the three-pointed star could work more closely together.
"There's no doubt," DaimlerChrysler AG Chairman Dieter Zetsche said back in September 2005, "that the speed and sustainability of bringing Mercedes back to very good profitability can only be increased by being able to work with Chrysler, versus on a stand-alone."
Last September, ensconced as the boss of bosses at headquarters, he told the German daily Die Welt: "It is certain that there will be no sale of Chrysler or a part of a brand" -- a sentiment punctuated a month later by an official statement that "there are no plans to sell Chrysler."
How quickly things change.
There, sitting Wednesday in the design dome of the Auburn Hills automaker he ran for five years, was Zetsche, stone-faced, saying all "options" are open for the future of Chrysler. If you could throw a company and its 80,700 employees under the figurative bus, I suspect it would look something like that.
It's still early in this nerve-wracking road through Chrysler's "recovery" -- 13,000 jobs lost, a plant closed, production capacity slashed by 400,000 vehicles -- and its "transformation," which could culminate in someone else (the French, the Japanese, the Koreans, the Chinese or Wall Street sharpies) calling the tune in Auburn Hills.
No, we don't know how this will play, though it's fairly clear what more than a few of DaimlerChrysler's supervisory board members, and their friends in the German media, want: Cut Chrysler adrift to, in the words of board member Erich Klemm, protect "the core of Daimler from a possible financial downwards spiral at Chrysler."
'Best intentions' gone awry
However it ends, however much Zetsche may be relenting to board pressure, it's safe to say this doesn't make ol' Dr. Z. look like the local hero he was just months ago, the guy who many -- including me -- considered to be Chrysler's strongest ally in the hostile corridors of DaimlerChrysler and the Mercedes technical center.
"He still has Chrysler Group's best intentions at heart -- which is why he's doing what he's doing," says an individual close to the situation. "It's 'I want a strong Chrysler Group and that's why you keep every option open.' He's not turning his back on Chrysler."
How come it doesn't feel that way? How come it feels like all the original suspicions of the transatlantic deal are rushing back, consuming any of the feel-good success and cooperation that flowered under Zetsche?
Remember, he was the affable German engineer-cum-executive who warmed to the Detroit automotive scene even more than most of his contemporaries here, who seldom missed an on-air chat with WJR's Paul W. Smith, who played a constructive role in civic causes, who headed the 2005 United Way Torch Drive campaign, raising $63.4 million.
He was the guy who arrived in the gray days of late 2000 with Wolfgang Bernhard at his side to rescue Chrysler from the bumblers who ran it into the ground, embarrassing J|rgen Schrempp, mastermind of Daimler-Benz AG's
1998 acquisition of Chrysler.Zetsche was the guy who killed jobs, closed plants, tore up the product plans, instilled what he called "disciplined pizzazz" at Chrysler. Then he started shipping billions in operating profit back to Stuttgart just as vaunted Mercedes was slipping into the red, thanks to an aging product line, operational inefficiencies and a black hole called Smart.
Shining star tarnished
Chrysler was the shinier star, and Zetsche basked in its glow. It strengthened his bid to outmaneuver rivals on DaimlerChrysler's management board, powering his ascension to arguably the most powerful jobs in industrial Germany -- CEO of DaimlerChrysler and head of Mercedes.
Still, he didn't forget Chrysler. Even after turning it over to Tom LaSorda, he agreed to star last summer in "Dr. Z" ads touting the melding of American innovation and German technology in Chrysler Group vehicles.
They even draped a vast sheet adorned with his lovable mug on the side of Chrysler headquarters, visible to anyone driving along I-75 -- before, that is, they quickly dumped the campaign as Chrysler's financial troubles became too obvious to ignore.
Which is why this apparent about-face, underscored by the jubilation in Germany and on the global capital markets, feels more like betrayal and less like doing what's best for Chrysler.
Or put it this way: In many ways, the Chrysler descending into another gut-wrenching workout is mostly the Chrysler that Zetsche left to LaSorda. Zetsche's Chrysler kept the plants running, filled the dreaded sales bank with inventory and used the tactics of his sales guy, Joe Eberhardt, to shove vehicles down the throats of dealers, fomenting a revolt LaSorda had to put down.
Dropping production and firing Eberhardt, as LaSorda eventually did, would have gutted Chrysler's revenue and exposed the over-reliance on trucks and SUVs, as well as the notion that Chrysler wasn't really "fixed." That would have been a problem for Dr. Z, then angling to succeed Schrempp as DaimlerChrysler's CEO.
Zetsche green-lighted the sad-sack Jeep Commander and Compass SUVs and, as LaSorda has told people privately, left behind a product plan that didn't deliver a single new Chrysler-brand vehicle to dealerships in a two-year period.
The point: Chrysler and its communities will bear the uncertainty of a present and a future only partially of their making. Big business, tough decisions and global competition we get, because, Lord knows, we see a lot of them all in this town.
But is this exactly what the doctor ordered? Or is he being pushed by forces he cannot control, by board members convinced Chrysler is unfixable and looking for an excuse to pull the plug on a deal so many of them despised from the beginning -- and fast?
-- "The king of Israel answered, "Tell him: 'One who puts on his armor should not boast like one who takes it off."