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Detroit 3 sing different tune

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Detroit 3 sing different tune

BY TOM WALSH

FREE PRESS COLUMNIST

TRAVERSE CITY -- Can Detroit stand success?

That's the nagging question at the 35th annual Management Briefing Seminars, where auto executives, analysts, suppliers and UAW leaders are chewing on the state of an industry that 12 months ago teetered on the edge of collapse.

Monday's opening session had the fervor of a tent revival meeting as manufacturing chiefs of General Motors, Chrysler and Ford vowed that their companies have renounced sinful past habits -- and UAW President Bob King declared an end to adversarial relations in a 31-minute manifesto on the union's new strategy.

Skeptics might ask: Aren't these some of the same folks who led the Detroit companies and their workers into massive losses of market share and billions of dollars just a few years ago, during the best period of car and truck sales ever?

Yes, but life is better now that GM and Chrysler unloaded tons of fixed costs in bankruptcy and Ford reaped some similar savings from the union.

Ford racked up $4.7 billion in profit during the first half of 2010 and got a two-notch upgrade Monday in its credit rating from Standard & Poor's.

GM is expected to post a second consecutive quarterly profit in a couple weeks, and soon launch an initial public offering of stock from Uncle Sam's 61% ownership stake.

Diana Tremblay, GM's vice president of manufacturing and labor, told me Monday that she, too, was skeptical a year ago. "Nobody knew what was going to happen then, when Treasury said we'd get through bankruptcy in 30-60 days. I said, 'No way, I've never heard of anything like that,' and yet we did," she said.

The results: a return to profitability and positive cash flow, and a huge boost in employee morale, she said.

Fighting complacency

Scott Garberding, Chrysler's senior vice president of manufacturing, gives similar testimony. The industry, before the crisis and federal rescue of late 2008, was saddled with huge fixed costs, forcing it to chase after "high-margin segments" -- in Chrysler's case, big trucks and SUVs.

After Uncle Sam forced a Chrysler-Fiat alliance, which stemmed the flow of red ink, new CEO Sergio Marchionne is reminding his troops "that we just daily have to guard against the fact that our own success might be our worst enemy," Garberding said.

"So I don't think you'll see the same bunch of goofballs lead this place down the tubes," he added.

And the UAW's King, with soaring rhetoric that invoked legendary names from Walter Reuther to Dr. Martin Luther King Jr. and Mahatma Gandhi, declared Monday that "the UAW and our members have a moral obligation to our customers to build the best vehicles at the best price." No diatribes against greedy overpaid CEOs.

Whew. They sure are talking a different talk in Detroit than they were in the bad old days.

It'll be fascinating to see how well, and how long, they can walk the walk.

link:

http://www.freep.com/article/20100803/COL06/8030385/1331/BUSINESS01/Detroit-3-sing-different-tune

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