DETROIT -- In November 2000, Dieter Zetsche arrived in Auburn Hills, Mich., as an outsider, a hit man sent by Stuttgart to cure a headache for DaimlerChrysler AG Chairman Juergen Schrempp.
Nearly five years later, as he prepares to leave to replace Schrempp, Zetsche draws praise for steering the Chrysler group out of chaos.
Today, the American half of the German-American automaker has hot-selling products, is gaining market share, has a good relationship with the UAW and is getting higher marks than it once did from suppliers. And Zetsche has done it with a sense of personality and humor that many in Auburn Hills say they did not expect from someone raised in Germany.
"One of his great accomplishments was to create a positive culture at Chrysler after all the negative happenings," said John Henke Jr., president of Planning Perspectives Inc., a consulting company in Birmingham, Mich.
Ron Harbour, president of Harbour Consulting in Troy, Mich., says: "What's the sign of a good leader? Guys who are confident enough to surround themselves with strong people and not be threatened by that. Dieter is one of them. We found out that in a time of chaos, he was the ultimate leader."
Zetsche turned the Chrysler group around by focusing on products and cutting costs. Two months after he arrived in Auburn Hills, Zetsche cut
$10 billion out of the five-year product plan, yet he added seven products. That plan was redirected to put more emphasis on passenger cars and expand the Jeep lineup with car-based models.
Chrysler shed 40,000 jobs from 1999 through 2004.
Just days after Zetsche arrived, he and then Chrysler group COO Wolfgang Bernhard called on then UAW President Steve Yokich. Zetsche had hoped the UAW would renegotiate its contract with the Chrysler group in light of a $1.8 billion loss in the second half of 2000.
The union refused to reopen the contract, and Yokich grilled the executives on their plans. But Zetsche's emphasis on all parts of the company making sacrifices helped win support from the union for the job cuts.
Last year, the Chrysler group used language in the UAW contract to negotiate a deal that requires 35,000 of the company's workers and retirees to make co-payments and pay annual deductibles for health care.
Says Harbour, "Dieter is going back to Stuttgart more useful than he was before his Chrysler experience."
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