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Dudder: Motorized Warfare

Detroit is fighting back, but this market battle will be long.

In a matter of days, the defections from Toyota were astonishing.

In a matter of days, the defections from Toyota were astonishing. Key executives, including Jim Press, president and COO of Toyota Motor North America, and Jim Farley, group vice president and general manager of Lexus, Div., left a company that seems indomitable for Chrysler and Ford, respectively. Some in Detroit were exuberant, proclaiming, in effect, that Toyota’s defeat in battle was assured because the Big Three were on their way to winning the war. While the appointments of Press as vice chairman and president of Chrysler LLC and Farley as group v.p. of Marketing and Communications at Ford are certainly notable developments, there remains a whole lot of ground for the Big Three to recover before anyone breaks out the champagne.

Placing all of your hopes on the shoulders of any two men, especially two who have come from the industry darling, is naïve at best. Look at the situation from the other side of the battlefield. Was Toyota’s success in this market due to their presence? Will their North American operations be adversely or permanently affected by their departure? Call me a fool, but I don’t think Toyota’s operations here are in imminent danger of collapse because the “two Jims” aren’t there any more, nor do Chrysler and Ford think they are in the clover because they have taken up residence. It’s just not that simple. A single person can profoundly change history—for better or worse—but organizations take time and effort to change.

Press and Farley are new commanders on the battlefield, in charge of specific operations that have the potential to affect whether ground is gained or lost, and how quickly that happens. Their greatest effectiveness will be in rallying the troops by setting new goals and implementing new strategies, increasing morale, and cutting through the bureaucracy to place assets where they are most needed. Initially, morale will rise based on their perceived past success, but it will take operational ability and a clear sense that the tide of the conflict can change to keep it. Truthfully, their greatest enemies come from within their own organizations. Those whose continued existence is threatened by these interlopers will use any downturn, misstep, or loss to erode support. If you doubt the tenacity and inner focus of these fighters, look at the examples of Bunkie Knudsen at Ford or—more recently—Bernd Pischetsreider and Wolfgang Bernhard at VW. All were defeated by their own troops.

However, all is not lost. At Ford, for example, it becomes clearer by the day that the Family Ford has been relegated to the sidelines by Mr. Mulally, giving the chance for change to actually take hold. However, there are still the questions of whether Mark Fields will survive, or if the Europe-centric focus of its product plans will effectively change the company’s name to “Ford (of Europe).” Nevertheless, Mulally’s are the most substantive—and subtle—changes seen at Ford in years. Not only are product plans being coordinated and money spent on new product, Elena Ford—who publicly stated her expectation to be named to the board within five years of her reign of mediocrity at Lincoln-Mercury—was shuffled to the rear area near her cousin Bill Ford, Jr., with nary a word of protest from family members or anybody else. Press and Farley should both take note. That’s leadership of a kind not usually seen in Dearborn.

Chrysler’s situation is somewhat different in that there is no ruling family, but it played Italy to Mercedes’ Germany and suffered as a result. Newly freed from these shackles, it also has the opportunity to build an arsenal away from the incessant micromanaging of Wall Street’s junior generals and draw up its plans to regroup and redeploy behind closed doors. Even so, Chrysler has a lot of work before it is battle ready: it has too many models too poorly built, second-class interiors, and a design language that is muted if not mute. From what he has said thus far, Press is well aware of the situation.

The industrial might of the U.S. automakers is not what it once had been, yet it is worth remembering that six months after Pearl Harbor a rag-tag U.S. fleet defeated an arrogant Japanese navy in the Battle of Midway. From that point on, the Japanese were on the defensive, though—to be honest—it would take models capable of sinking the Camry to cause the same level of damage. Battles of that magnitude—perhaps aided by Farley and Press—are still in the future. For now, this change in circumstances is more akin to Doolittle’s raid on Tokyo; a daring exploit that boosted morale on the home front. 

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