Volume 5 Number 9- September 11, 2007
 

The Finish Strong™ monthly e-newsletter helps business leaders examine issues important to taking operational performance to world-class levels.

Finish Strong™ is about developing an appropriate Operations strategy, and effective execution, dotting operational i's and crossing operational t's as you go.

Your company cannot afford to be sloppy if you want it to be great.

CAN CHRYSLER DO IT AGAIN?

Years ago, Chrysler brought in Lee Iacocca to rescue the company from the financial crisis it faced. Iacocca's reputation had been built at Ford, where he was successful in marketing and product development. The Ford family fired him from his role as President of Ford Motor Company and Chrysler snapped him up for their top position. Within a few years, Chrysler was back on its feet.

Since then Chrysler has been acquired by Mercedes, and sold to private equity firm Cerberus Capital Management LP. Private equity firms have a reputation of making aggressive changes believed necessary to a targeted ROI within a relatively brief time period. Cerberus, DaimlerChrysler AG, major banks and investment companies hold tremendous debt, some of which is required to fund Chrysler's continuing operations. They won't patiently wait for the automaker to slowly change direction.

Cerberus brought in Robert Nardelli, formerly CEO of Home Depot, to lead Chrysler, and Jim Press, former President of Toyota's North American operations, as a Chrysler vice-chair and president. Also holding the vice-chair and president titles is Tom LaSorda, who runs Chrysler's operations.

Toyota clearly valued Press, as they had made him the first non-Japanese to have a seat on its board. His Toyota contributions were most highly regarded in sales, marketing, and product development, where he led the incorporation of Toyota's famous "lean manufacturing" mind set to those US arenas. But they had recently "put him out to pasture," removing all operational responsibilities. Loss of operational responsibilities is a major reason why Press was available to Cerberus.

Press is responsible for leading demand creation and management of Chrysler vehicles while streamlining dealership relationships, and doing all that under severe financial constraints and high expectations. The patience inherent in the Toyota Way will not likely be allowed by Cerberus.

Few people gave Iacocca a chance. His turnaround of Chrysler occurred when the "Big 3" referred to US automotive companies. It no longer does. The current financial pressure is comparable, but the industry and the management structure are very different. Press has the pedigree, but can Chrysler do it again? Sadly, fumbling by GM and Ford may be more important to that answer than anything else.

CONGRATULATIONS (AGAIN) TO HUNTER MANUFACTURING

Utilizing a strategic mix of acquisition, growth, and increased diversity, Vince Nardy and his Hunter Defense Technologies management team, including Solon-based Hunter Manufacturing, increased the company's value dramatically in just four years. Metalmark Capital recently acquired HDT from Behrman Capital for $335MM, significantly more than Behrman's 2003 outlay for Hunter and its subsequent acquisitions. Behrman acquired Hunter from Rockwood Equity Partners, who put much of the current management team in place when it initially bought the 70 year-old company.

MAYBE ANDRE AGASSI WAS RIGHT

Dark, dingy, smoky, smelly, rusty, backbreaking and on its way to China. To say manufacturing has an image problem is an understatement.

The industry has lost millions of jobs in this country, yet many manufacturers are struggling to find qualified employees, skilled or unskilled, educated or experienced. The ones we had have gone on to other roles, and few youngsters wake up thinking they can hardly wait to learn about manufacturing in college or in a job.

If parents don't think there's a future in manufacturing, or they believe the work is dangerous, they won't encourage their kids to look there.

Is your facility a good advertisement for great futures in manufacturing? If you have massive clean-up efforts when key customers or corporate executives visit, you're missing the point. The way you treat employees, the facility you provide, your focus on environment, safety and ergonomics all create image, for your employees and their families and their extended communities. And image is key to the ability to attract bright qualified hard workers.

When the renowned tennis star had long blond hair and the audacity to wear non-white clothes to major events, he was a spokesman for Canon, speaking the tagline: "Image is Everything." Image may not be everything, but it's darned important. Don't overlook it.

 
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