Is GM going to merge with Chrysler? What sort of restructuring is Chrysler doing? Is GM going to end a number of historic marques? I'm no expert when it comes to the heady world of industry and high finance. It doesn't take an expert, though, to comment on the rumors and announcements regarding Chrysler, GM and the ongoing crisis in our industry and the world.
Rumor has it there are many at Chrysler and GM who want (need?) a merger to happen. GM would get rid of a competitor and gain Chrysler's 11 billion cash reserve. Cerberus, Chrysler's 80% owner, would get out of the auto business they unwisely entered at a trying time and gain full ownership of GMAC (they already own 49%), which is due to receive billions in government bailout bucks. This may mean the loss of anywhere from 33,000 to 66,000 jobs and the UAW is understandably alarmed. The word is that GM would axe Chrysler and Dodge, keeping only Jeep and, maybe, Chrysler minivans, moving Jeep into Chevrolet. There's another rumor that Nissan Renault would like to get Dodge, or even become another player to invest in Chrysler if no GM merger happens. Still out there is Tata, the Indian giant that has already purchased Rover and Jaguar and maybe would like Jeep, too. Would GM sell Jeep to them?
An official announcement from Chrysler today says that they will be cutting 25% of their white collar employees. If current corporate policy is followed, this will probably mean that all remaining competent people will be let go or allowed to retire early, leaving only the inexperienced and incompetent to run a company that's already trying to survive in this floundering market.
And this brings us to the underlying problem in the corporate world. Incompetence and irresponsibility runs rampant. Obscenely bloated senior executive salaries, boards that aren't accountable to anyone, and incompetent managers have gutted our corporations to the point that today we're having this financial crisis. The difference between leaders and managers is great (see http://www.thefabricator.com/CEOs/CEOs_Article.cfm?ID=634). While both are necessary and neither like each other, today managers rule and destroy any leaders they find, ensuring that those under them in the corporate hierarchy are no threat. To "improve" the bottom line, thousands of skilled, competent lower-level employees are fired, weakening a company's foundation, when in reality firing just one or two senior managers would effect the same salary reduction and actually streamline productivity and profitability by getting rid of management roadblocks to daily efficiency. Also, why do corporations hire senior executives with proven track records of failure?
This is a time of change. All we can do is watch and pray that things will work out, especially for those thousands who may find themselves in unemployment lines. Let's hope that Jeep will find its way through this mess and continue to produce excellent vehicles, just as it's been doing for almost 70 years.