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Somewhere along the way Americans came to believe that only Detroit was in trouble, while companies like Toyota and Honda were the new paragons of automotive executive brilliance. Likewise, just six months ago the media covered some remarkable financial market moves that Porsche played perfectly; the German automaker’s resulting billions in profits made that firm the envy of hedge fund traders and earned market analysts’ applause. Going back 24 months, you may remember all the accolades heaped on Carlos Ghosn, the man who rescued Nissan and Renault and was widely considered the planet’s cleverest and most cunning auto executive. No, there was no doubt about it: Only Detroit was run by fools, trapped in their mid-century delusions about the American car market, incapable of change and permanently handicapped by outdated thinking. No wonder so many felt GM and Chrysler deserved their fate at the hands of federal bankruptcy judges.
In Chrysler’s case that was patently unfair. Just a decade ago everyone cheered as Daimler purchased the company; newspaper columns across America predicted that the German luxury automaker’s "magic" would somehow catapult the smallest of the Detroit Big Three into a new sphere of influence in American automobiles. In fact, however, Daimler’s calling the shots at Chrysler put the company exactly where it is today. Come to think of it, Daimler executives are now enjoying their own days in the bunker with problems at their Mercedes division.Welcome to the modern worldwide automobile industry. Virtually no one in it has escaped the world economy’s downturn unscathed. Those who were once thought to be the most brilliant of auto executives have proven to be little smarter than the dumbest guy drawing a seven-digit salary. A Great Bad ExampleA number of years ago I wrote in this column a cautionary tale about people who planned to overtake General Motors’ position; and I did so without mentioning Toyota by name. Of course, the story could also have been about Daimler’s vision of creating a worldwide automotive empire; they purchased Chrysler in the U.S., Mitsubishi in Japan and 10% of Hyundai in Korea. It certainly looked like Daimler’s then–CEO, Juergen Schrempp, was trying to emulate GM’s legendary chairman, Alfred Sloan, and his 1925 plan to offer "a car for every purse and purpose." Hyundai at the bottom, Mitsubishi and Chrysler as the "step up" vehicles for the masses, and Mercedes as the "aspiration" — the luxury car one attained with solid success. That plan had worked well for General Motors for almost 50 years, and in theory it could work again, but there were two major differences: First, Juergen Schrempp was no Alfred Sloan. Second, GM’s plan fit the way the wealth of America expanded from 1925 – 1975. Wealth distribution today is far more scattered worldwide, and Daimler didn’t understand that fact or its importance.
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