Who Turned Chrysler Around?

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“It’s halftime in America,” so went the most talked about TV ad in this year’s Super Bowl that featured two of the most storied franchises in NFL history. With the familiar deep, rasping voice of Clint Eastwood in the background, and scenes of Americans struggling in the aftermath of what is now called, “The Great Recession,” the ad made sure its message would tug at the heartstrings of millions of viewers in the country.

In the aftermath of the recession, everyone counted out Chrysler. No one in his right mind would even touch it. Investing in Ford and GM had more upside. Ford was doing well enough that it didn’t really need a bailout. GM had a sound product line that could have very good prospects after an infusion from the US government. But Chrysler with its confusing and over extended product line full of gas-guzzlers, many pundits thought it would take nothing short of a miracle worker to turn it around.

That miracle worker came in the form of Sergio Marchionne, an Italian born and Canadian raised auto executive. After taking over the Fiat Group of Italy in 2006, Marchionne made Fiat one of the fastest growing companies in the auto industry. In 2009, he helped to create an alliance between Fiat and Chrysler which was at the brink of collapse. In two years under his leadership, he managed to turn a profit for the once ailing US auto giant and pay off the $6 billion government bailout loan six years ahead of schedule.

In a recent interview on 60 minutes, Marchionne talked about some of the work behind turning a $183 million profit in 2011, Chrysler’s first profit report since 2005. Chryslers’ Belvidere plant in Illinois, now has 1,800 workers from a low of 200 during the onset of the recession. With the introduction of the Dodge Dart, Marchionne predicts a labor force at the Belvidere plant of about 4,500 by the summer.

All these were accomplished through Marchionne’s hands on type of management. He stays on the shop floor together with his engineers and put great emphasis on quality. He also cut the bureaucracy. In fact everyone in the company knew what was wrong with the cars that they produced, it was just a matter of getting them to surface underneath the large bureaucratic structure. He was able to find 26 young people in the company whose talents were buried under the hierarchy. Here’s what he said when asked how he found these people who now report to him directly, “Some of these people were buried inside an incredibly hierarchical organization that, you know, all pointed to the top. This place was run by a chairman’s office.”

In 2005, ChinaDirect Sourcing’s managing director, Lindy Chen found herself in pretty much the same predicament. Working against the odds, she saw a niche that she could take advantage of. Now she runs ChinaDirect in pretty much the same egalitarian system Marchionne introduced in Chrysler. You may want to learn her formula for success as an entrepreneur who faced daunting odds. Come listen to her experience at the Entrepreneur Success Night. See and hear for yourself what it takes to go from nothing to something. With Lindy and her ChinaDirect experience, you can be one step closer to turning things around in your company.

Here’s the full interview from 60 Minutes:

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