Car Companies their own Worst Enemy

December 3rd, 2008 · No Comments

It is not often you get to see Fortune 500 CEOs admitting to mea culpas. Granted Nardelli is only a new car person (from Home Depot), however it was most telling that:

“The mistake Chrysler probably made during that period is that we were responding to the customer who wanted bigger, more expansive, higher horsepower vehicles to go with their second homes, their boats, their trailers,” he explained. “And we chased that consumer demand up. Lesson learned for us.” The lesson, apparently, was that short-term consumer demand is a poor guide to long-term strategy. The carmakers—and their customers—may sometimes need a firm hand to restrain their most destructive impulses.

I thought the definiton of great management are ones that resist the temptation of short run behavior and look for the long term sustainability of the company. People that are spring to mind are Steve Jobs, the early Jack Welch and Katsuaki Watanabe.

What I take from this is that Detroit car companies have never been blessed with great CEOs rather ones that are mired in the protectionism environment that Washington has given them for many years. This of course begs the question, should another bail out simply be rewarding more bad behavior.

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