Last week Chrysler took a big gamble that Eaton can also figure out what American car buyers want. After several days of boardroom intrigue, the 52-year-old GM executive was named vice chairman and chief operating officer of the number three automaker; in Janunary, he will succeed retiring chairman Lee Iacocca. Eaton comes to Chrysler after a year of big losses but at a time when the carmaker has cut costs and is introducing some promising new models. But his success may depend as much on his ability to master the firm’s rough-and-tumble internal polities as on his eye for good cars. “It won’t be a cakewalk,” says Paine Webber analyst Stephen Girsky. “He’s got to set his own agenda for the company.”
Rough-and-tumble politics were at a new high when the Chrysler board gathered to discuss the Iacocca succession. The two other contenders for the job–Chrysler president Robert A. Lutz and former vice chairman Gerald Greenwald-were both reportedly confident of getting the nod. But sources close to the proceedings say board members were unable to reach a consensus even after hours of debate. Some favored Greenwald, who left the company two years ago to head an abortive leveraged buyout of United Airlines. Others wanted Lutz, who had made it clear he would not work with Greenwald. A few preferred that Iacocca stay on, an alternative the hard-charging chairman himself proposed. But a majority of the board insisted on new blood.
The impasse led to a special Saturday-night session, which ended after midnight with the board bestowing the chairmanship on Eaton and making Iacocca chairman of the company’s executive committee. Lutz, who has a loyal cadre of supporters within the Chrysler organization, played the good loser by agreeing to stay on. “The board was almost forced to find someone from outside the company and give some degree of assurance that Lutz would stay,” says one insider.
Although Eaton had been a rumored candidate for about a week, the news still shook Detroit. Though not unprecedented, it’s somewhat uncommon for the Big Three automakers to raid one another’s executives. Eaton, who was keeping a low profile with the press, said only that he considers Chrysler’s chairmanship a “once-in-a-lifetime opportunity.” It’s unclear just how much Eaton will be earning, but analysts estimate his total compensation package will be at least $1 million and probably significantly more.
Eaton will have to work hard for the money. Some experts fear pressure from Iacocca above and Lutz below could limit his effectiveness. “He’s the baloney between two slices of bread,” says Michigan State University management professor emeritus Eugene Jennings. An engineer by training, Eaton could use more experience in finance, an important area for debt-laden Chrysler. While he is credited with helping to make GM the most successful U.S. car manufacturer in Europe, his management style gets mixed reviews. Many laud him as a team player known for his willingness to include employees in decisions; others paint him as single-minded and unyielding.
When news of the appointment surfaced at GM’s European headquarters in Zurich, someone posted a picture of Gen. Norman Schwarzkopf, substituting Eaton’s face for the general’s. “He was a bit of a tyrant,” says one GM official in Europe. “He could get quite upset at being challenged.” That may not be all bad. In an increasingly competitive race for the U.S. market, it may take the toughness of a military man to keep Chrysler on track.
title: “At Chrysler S Wheel A Car Guy " ShowToc: true date: “2022-12-10” author: “Matthew Capone”
Last week Chrysler took a big gamble that Eaton can also figure out what American car buyers want. After several days of boardroom intrigue, the 52-year-old GM executive was named vice chairman and chief operating officer of the number three automaker; in Janunary, he will succeed retiring chairman Lee Iacocca. Eaton comes to Chrysler after a year of big losses but at a time when the carmaker has cut costs and is introducing some promising new models. But his success may depend as much on his ability to master the firm’s rough-and-tumble internal polities as on his eye for good cars. “It won’t be a cakewalk,” says Paine Webber analyst Stephen Girsky. “He’s got to set his own agenda for the company.”
Rough-and-tumble politics were at a new high when the Chrysler board gathered to discuss the Iacocca succession. The two other contenders for the job–Chrysler president Robert A. Lutz and former vice chairman Gerald Greenwald-were both reportedly confident of getting the nod. But sources close to the proceedings say board members were unable to reach a consensus even after hours of debate. Some favored Greenwald, who left the company two years ago to head an abortive leveraged buyout of United Airlines. Others wanted Lutz, who had made it clear he would not work with Greenwald. A few preferred that Iacocca stay on, an alternative the hard-charging chairman himself proposed. But a majority of the board insisted on new blood.
The impasse led to a special Saturday-night session, which ended after midnight with the board bestowing the chairmanship on Eaton and making Iacocca chairman of the company’s executive committee. Lutz, who has a loyal cadre of supporters within the Chrysler organization, played the good loser by agreeing to stay on. “The board was almost forced to find someone from outside the company and give some degree of assurance that Lutz would stay,” says one insider.
Although Eaton had been a rumored candidate for about a week, the news still shook Detroit. Though not unprecedented, it’s somewhat uncommon for the Big Three automakers to raid one another’s executives. Eaton, who was keeping a low profile with the press, said only that he considers Chrysler’s chairmanship a “once-in-a-lifetime opportunity.” It’s unclear just how much Eaton will be earning, but analysts estimate his total compensation package will be at least $1 million and probably significantly more.
Eaton will have to work hard for the money. Some experts fear pressure from Iacocca above and Lutz below could limit his effectiveness. “He’s the baloney between two slices of bread,” says Michigan State University management professor emeritus Eugene Jennings. An engineer by training, Eaton could use more experience in finance, an important area for debt-laden Chrysler. While he is credited with helping to make GM the most successful U.S. car manufacturer in Europe, his management style gets mixed reviews. Many laud him as a team player known for his willingness to include employees in decisions; others paint him as single-minded and unyielding.
When news of the appointment surfaced at GM’s European headquarters in Zurich, someone posted a picture of Gen. Norman Schwarzkopf, substituting Eaton’s face for the general’s. “He was a bit of a tyrant,” says one GM official in Europe. “He could get quite upset at being challenged.” That may not be all bad. In an increasingly competitive race for the U.S. market, it may take the toughness of a military man to keep Chrysler on track.
