Auto execs get ugly, personal

July 22, 2011

Auto execs get ugly, personal

Book peeks behind the scenes at automakers, from profanity to failed merger discussions

/ Detroit News Washington Bureau

A new book on the auto industry reveals bitter, personal sniping in the executive ranks of U.S. automakers, and discloses fresh details of failed merger talks.

The book, “Once Upon a Car — The Fall and Resurrection of America’s Big Three Auto makers — GM, Ford and Chrysler,” was written by New York Times Detroit Bureau Chief Bill Vlasic and is to be released Oct. 4.

It chronicles smack talk in the executive suites of Detroit’s Big Three automakers, which publicly, at least, observed an informal truce during the government bailouts and bankruptcies of General Motors and Chrysler. It pulls back the curtain on the companies’ efforts during a mounting crisis starting in 2005.

The comments are blunt, emotional and at times profane.

In the 382-page manuscript, Ford Motor Co.’s vice president for global marketing, sales and service, James Farley, uses an expletive to describe GM.

“I’m going to beat Chevrolet on the head with bat. And I’m going to enjoy it,” Farley says.

“F— GM. I hate them and their company and what they stand for,” he says. “And I hate the way they’re succeeding. Ford is back because people trust us. And that is a powerful message.”

GM spokesman Jay Cooney responded: “We would not have expected such crass words coming from Ford.”

GM, however, has lobbed a bomb or two at the hometown competition. In a Detroit News interview last month, GM Chairman and CEO Dan Akerson suggested Ford’s struggling luxury brand, Lincoln, couldn’t survive. “You might as well sprinkle holy water. It’s over,” Akerson said.

Asked for Ford’s reaction to the book, Ford spokeswoman Karen Hampton said the company has “not yet seen the book” and couldn’t comment on quotes. “This is a passionate, competitive industry, and we truly respect all of our competitors,” she said.

The Detroit News obtained a preproduction copy of the book, which may be further edited before its final printing.

In October 2008, failed merger talks between GM and Ford were reported by several sources. That summer, Vlasic writes, Rick Wagoner, who was GM’s CEO, called Ford Executive Chairman Bill Ford Jr. to discuss a possible tie-up.

Wagoner, Ford, GM’s then-President Fritz Henderson, Ford CEO Alan Mulally and two other executives met at Ford’s Dearborn headquarters. But when talk turned to Ford’s $30 billion in cash, the meeting soon ended.

“This would never work out. You know what? We’re much too alike,” Ford Jr. said.

Wagoner’s response, according to the book: “Well, if you don’t do it with us, we’re going to look elsewhere.” Wagoner and Henderson this week both declined comment.

Like Farley, Ford Jr. is quoted in the book as criticizing GM’s corporate culture. “GM can be so arrogant,” Ford Jr. said. “We were known as a culture of infighting. And they are a culture of arrogance.”

“I grew up in this town and GM was the giant,” said Ford Jr. “We were a very tough competitor, but they were the giant.”

The book also details Daimler’s efforts to sell its Chrysler unit in 2007. Daimler chief Dieter Zetsche met secretly with Wagoner in New York to propose selling Chrysler to GM.

Wagoner took the idea to the GM board, which approved formal talks. But at the same time, Cerberus Capital Management LP approached Daimler and ultimately acquired 80 percent of Chrysler in a $7.4 billion deal.

In 2008, Cerberus pitched a tie-up with GM. Wagoner dismissed it, but Henderson sought to pursue it. Eventually, as part of its bankruptcy restructuring and government bailout, Chrysler tied up with Italy’s Fiat SpA, which now has a majority stake.

Vice Chairman Jim Press was one of the casualties, as Chrysler CEO Sergio Marchionne decided to fire him.

The book quotes Marchionne as telling Press: “I need to get this place detoxed. You don’t fit in. I’ve got to break eggs around here.”

“Sergio,” Press says in the book, “is truly from hell.”

“He’ll look at you and smile, then turn around and stick a knife” in a delicate part of the male anatomy.

Reached by phone Wednesday, Press — now an industry consultant — expressed regret.

“At the time I was angry and emotional and said some things I shouldn’t have,” he said. “My mother always told me if you can’t say something nice, don’t say it. I guess I forgot it that day.”

Chrysler declined comment.

Things were testy at Ford, too. Mulally is critical of Detroit, noting the Big Three’s once 80-percent market share. “But they were arrogant,” he says in the book. “They made fun of the Japanese. And then they made shoddy products.”

Ford’s then chief financial officer, Don Leclair, labeled as “stupid” or “idiotic” much of what was said by Ford Americas president Mark Fields. Fields is quoted saying Leclair “sucks the life out of the room.”

At a meeting, Leclair said Ford needed to cut product spending, because “we’re going to go bankrupt if we don’t.” Fields said “Don and I almost literally went at each other’s throats.” Reached Wednesday by phone at his home in Canton, Leclair declined to comment.

Through a spokeswoman, Fields declined to comment.

Before approaching Mulally, Bill Ford Jr. made three separate offers to Renault-Nissan CEO Carlos Ghosn. Ghosn turned them down because he wanted to be chairman and CEO.

Ford Jr. also approached Daimler’s Zetsche, who was baffled by the pitch. “He kept telling me how (expletive) his management team was,” Zetsche is quoted as saying, “I am thinking, ‘Why would I want to take the job with this (expletive) management team?”

Daimler declined comment.

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