Why the bankruptcy legacy seems different at Chrysler and GM

When UAW Local 685 President Rich Boruff finished his speech, he tearfully embraced Chrysler CEO Sergio Marchionne like a grown man might hug his dying grandfather. Photo credit: Chrysler

Maybe it’s the five-year bankruptcy anniversary, or the juxtaposition of Fiat Chrysler Automobiles laying out its five-year business plan as General Motors struggles to contain a ballooning recall crisis.

Either way, time and careful observation have now clarified for me a theory that I’ve noodled over since that dark spring in 2009.

You see, there is a fundamental difference today between Chrysler and GM because of what did and did not happen during that gut-wrenching stretch five years ago. I’ve come to believe now that Chrysler came close enough to death in its bankruptcy to dramatically alter its culture, while GM never stopped believing it was too big to fail.

Look, I understand that comparing Chrysler to GM is always going to be fraught with grape-to-watermelon issues of size -- the two automakers exist on a substantially different scale. But when you observe the individuals that work at these companies, it’s easy to spot the difference.

Every Chrysler employee wasn’t sure he or she still would have a job when the bankrupt company shut down every one of its factories on April 30, 2009.

It was an incredibly frightening time, robbing people of stability, threatening their ability to provide even basic necessities for their families, casting doubts over a lifetime of choices. But by the time GM entered bankruptcy a month later, the expedited path through bankruptcy had already been blazed by Chrysler -- there were few remaining unknowns and little doubt that GM would emerge on the other side.

It would become a prophetic difference.

Earlier this month, at the dedication of a new $162 million transmission plant in Tipton, Ind., UAW Local 685 President Rich Boruff choked up during an emotional speech that recalled the scary days as Chrysler locked the doors to his factory.

Boruff -- bald except for his gray beard and clad in jeans and a red t-shirt -- spoke from the heart, as a husband and father, and thanked Fiat and Chrysler for restoring the “dignity” of his work.

When Boruff’s speech ended, he tearfully embraced Chrysler CEO Sergio Marchionne like a grown man might hug his dying grandfather. And Marchionne, clearly touched, hugged Boruff right back.

In that embrace you could see the shared survivor mentality that now permeates Chrysler, from its factory floors to its executive suites. It is a clarifying sense that, having somehow survived the worst, there are few things life can throw at Chrysler employees that they can’t overcome together. It’s why most of Chrysler’s executives don’t wear suits and ties, why its top designers are in tee-shirts and tennis shoes, and why the once opulent top floor of its overcrowded office tower remains symbolically empty.

The scene in Tipton struck me not only for its sincerity, but for how foreign it would seem at either GM or Ford.

Not that employees at those companies don’t care about their employers. Quite the contrary. I believe they care a great deal, many passionately so. But I think the distance between factory floor and boardroom at those companies is too great to engender the same raw emotion.

A great many things changed for Chrysler and GM during their bankruptcies five years ago.

Unfortunately for GM, though, there were some things that didn’t change.

You can reach Larry P. Vellequette at lvellequette@crain.com -- Follow Larry P. on Twitter: @LarryVellequett

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