No. 743,
April 16, 2014

About The Autoextremist

After a more than two decade career in automotive advertising, Peter M. De Lorenzo founded Autoextremist.com on June 1, 1999 as a weekly Internet magazine devoted to news, commentary and analysis of the auto industry and the business of motorsports. Since then the site has become a weekly "must read" for leading professionals within and outside the auto and motorsports industries, and De Lorenzo is considered to be one of the most influential voices commenting on the business today.

De Lorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. De Lorenzo is also the author of The United States of Toyota.

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The Autoextremist - Rants


Tuesday
Feb252014

The Two Sergios.

By Peter M. De Lorenzo

Detroit. In writing about the winter of Detroit’s discontent last week, I contrasted the “old” Detroit with the “new” Detroit. It’s a tale of two cities that is bound to continue unfolding, with the pendulum swinging from one extreme to the other in roller-coaster bursts of gut-wrenching change. That the euphoria of a series of hot quarters can be stifled in an instant has been the nature of this business since Day One. And that reality is unlikely to change anytime soon.

But even with another burst of relentlessly frigid air thrust upon us, perhaps The Winter That Will Never End can turn into the optimism of an eagerly awaited spring that’s just around the corner – 23 days to be exact – or not.

It all depends on how you look at it.

This is, at times, a difficult, brutal business. One with little time for idle thoughts of fancy associated with the upcoming season. Instead, the thoughts heard in the halls and conference rooms of these car companies turn to the ugly realities that drive this business every day, such as, “Did we make the right call on that product we bet the farm on three years ago, or are we just selling air?” Or, “Were those sluggish sales numbers really the result of one of the worst winters on record, or is there something more ominous at work here?” And, “Is this launch gonna work, or are we just dancing in the dark here?”

These are billion-dollar questions, the soul-crushing kind that can make or break careers and determine the very future of a company. And there are countless other questions just as urgent roiling around the hallways and byways at these companies, too, just in case you’re wondering. It’s no wonder a certain kind of madness sets in, one made up of one-thousand-yard stares and twitching in the night.

In the midst of this endless churn ushering in the new season, I think it would be helpful to remind everyone that there are some in this business who truly believe in their hearts that they operate in a different dimension, hovering above the fray cloaked in a brilliance unfamiliar to you and me. 

We just got rid of one who forced his will upon the denizens of the Silver Silos, leaving a delusional legacy formed by a toxic cocktail of two parts cock-sure arrogance and three parts unbridled belligerence that was truly a sight to behold. Forget the victory laps that portrayed a tough but angelic do-gooder who, gosh darn it, was just trying to help out his country by going to the hinterlands and teaching the backward natives in that woebegone flyover state a thing or two about running an actual business. Except none of it was true and insiders are still reeling – and occasionally talking out loud – about how miserable it was to watch as The Prickian Nightmare navigated uncharted waters barking his misguided orders every step of the way, all with a certainty that defied all rational understanding. Some legacy.

And then there’s The Great Sergio, aka The Gifted One, Sergio The Magnificent, etc., etc., etc.

The all-knowing and all-powerful leader of the Fiat Chrysler enterprise has been anointed The Altruistic Savior of all he surveys by the bootlicking hordes in “the media,” portrayed as the man who pulled the doddering old Chrysler out of the depths of despair while giving its huddling, downtrodden masses who were facing a certain death sentence a reason to live.

And it’s all unmitigated bullshit too.

Marchionne is a shrewd, make that brilliant deal maker who happened to be in the right place at the right time and who was able to abscond with the car company formerly known as Chrysler lock, stock and barrel for the staggeringly paltry sum of $6 billion, all in. And in one fell swoop he gave the idle aristocracy who inherited the Fiat "empire" – and had almost run it into the ground once and for all - another lease on life. For that he has been granted career canonization the likes of which has never been seen before in this business, sort of an Alfredo Sloan for our times.

But then again there’s another side to Sergio that isn’t sexy, glamorous or all knowing, which is why it continuously goes unreported.

Marchionne’s brilliance when it comes to putting together big picture deals is unquestioned. Let’s face it, anyone who can walk away with the Jeep brand for the above-mentioned sum and get the rest of Chrysler in the bargain is a frickin’ genius.

But The Other Sergio is a plodding, micro-managing maniac who believes that Fiat Chrysler employees – no matter what the level - should be happy that they’re allowed to be in his presence. And for that, and the occasional opportunity to be bathed in the warmth from the glow as The Great One passes them in the hallway, they get a shockingly head-in-sand management approach - a time-tested legacy of the Fiat “empire” that’s unwanted and unwarranted - yet shoved down the throats of the Auburn Hills faithful with astonishing regularity.

The ingrained backwardness with which the Italians approach everything actually has the denizens in Auburn Hills reeling from having to dumb down the way they do things to appease their Italian handlers on a daily basis. Sergio’s espresso-swilling minions regularly ignore hard-earned and hard-won lessons that have stood the test of time in this business in favor of doing things “their” way, even if it jeopardizes the company’s competitive standing in the market or it costs the company millions in do-overs and start overs.

The arrogance of the Italian overlords running Chrysler now rivals the arrogance displayed by the German overlords back when Daimler had its crack at the keys to the Jeep-Truck kingdom. Combine that with their openly hostile attitude, which states that every supplier who brings an idea or a product to them can, as they often say, “cut your number and half and then we’ll talk.” It’s a wonderful way to build trust in the supplier community and an even better way to ensure that FCA misses out on leading-edge technology and thinking across all disciplines.

And Sergio’s latest management brainstorm is to jettison anyone over 50 (no, you won’t read this anywhere else) because they’ve become liabilities and are not forward thinking enough. Top-notch, seasoned executives are being shown the door in favor of young, inexperienced replacements with the inevitable result: The young hires are being blown out and replaced by similarly young and inexperienced people and guess why? They can’t do the work because they don’t have enough experience. It’s a revolving door of mediocrity that just keeps doubling up on itself. Meanwhile, the senior-level managers, sensing the tide, are gathering in droves at the door clamoring for a way out.

That’s right, there are Two Sergios at work here. On the one hand there’s “The King” - the genius deal maker and media darling who walks on water, and then there’s the paranoid, micro-mismanaging bumbler who, along with his posse, is projecting Fiat’s historically losing ways on to the True Believers out in Auburn Hills. You know, the ones who deserve so much better than what they’re getting.

A little madness in the Spring is wholesome even for the King.

~ Emily Dickinson

I think I’m going to have to go ahead and disagree with Emily on this one.

A lot less madness from Sergio would be a welcome breath of spring out in Auburn Hills.

And that’s the High-Octane truth for this week.