The Auto Industry's Jinx

Posted by: David Welch on April 7, 2008

You’ve heard of the Sports Illustrated Cover jinx, right? It’s an old fable that says that any athlete or team featured on the venerable sports mag’s cover will soon be broadsided by some nasty injury, humiliating defeat or other catastrophe. Anna Kournikova batted her eye lashes on the June 5, 2000 cover before bowing out early (even for her) from the French Open a day later. The New York Giants were featured the same year just before the Baltimore Ravens hammered them in the Super Bowl. Michael Jordan graced the cover just before his wife filed divorce papers. You get the idea. Well, I think I have found the auto industry’s equivalent.

It’s the Automotive Executive of the Year Award, an industry glad-handing event sponsored by the Automotive Industry Action group and DNV Certification. The winner is picked by a group of journalists and analysts. That panel has picked some dubious recipients, many of whom ended up in some form of drama not long after.

This year, Carroll Shelby gets it for a distinguished career in racing and selling performance cars. His name is woven into American car culture. But if past winners are any indicator, Shelby might want to safeguard his storied name in performance cars from a trip to the pits. Take a look at a few past winners.

1997: Former Chrysler CEO Robert Eaton won the award. The next year he cut the deal to sell Chrysler to Daimler and form the “merger of equals” that would cause both companies many headaches. To be fair, many Chrysler executives say the company might have gone under if Daimler didn’t buy it. But the merger failed, has been unwound, and Eaton is mighty unpopular in Detroit these days.

1999: Jac Nasser. The former Ford CEO did turn out some big profits in the late 1990s. But two years after getting the award, Nasser was fired.

2003: Dieter Zetsche got plaudits when he won the award in 2003 for leading Chrysler’s turnaround. But it would later be revealed that Dr. Z’s magic was just hocus pocus. Chrysler propped up profits by building up inventory and discounting cars. Eventually, Chrysler’s profligate rebate spending, sales to rental fleets and building cars that had no customers ran out of steam and the company was bleeding red ink. Daimler just about gave the company to Cerberus Capital Management last year.

2004: GM factory guru Gary Cowger got the award in 2004 when he was head of GM’s all-important North American business. The next year the business went into a deep tailspin and he was demoted. Chairman and CEO Rick Wagoner took the reigns of GM’s home business as sales dropped and massive losses mounted.

2005: Trevor Creed won the award. At the time, Chrysler was cutting edge in design. But it didn’t last. The 300 was a winner. Now cars like the Jeep Grand Cherokee and Commander are seen as bland, the Chrysler Sebring family sedan is unloved and the Jeep Compass is just garish.

2006: William C. Ford Jr. got the trophy. At the time, my colleague David Kiley surmised that it was just Bill’s turn to get a nice award. The company was en route to losing $12.7 billion. Five months later Chairman Ford decided his family’s faltering company was better off in the hands of someone else. He hired former Boeing Co. executive Alan Mulally to take the reigns.

2007: Last year, Jim Press won the award while he was still a top executive at Toyota's North American sales business. He later left for Chrysler. The jury is out on this one. Can Press get consumers to love Sebrings and Calibers the way they love Camrys and Corollas? That's a tough leap to make. If this award is any indicator, luck won't be on his side. Maybe Jim should have passed on the honor.

Reader Comments

Noz

April 7, 2008 8:22 PM

Well, with evidence like this, tongue in cheek or elsewhere, yes indeed, Shelby should both wear a helmet and a 'cup', move about in an armoured vehicle of some kind, have tasters, other than his dogs and relatives, prior to scarfing drinks and meals, and perhaps take more seriously his praying to St. whomever. Body armour would be a good thought, but then there is always the front part of his 'ead, his brain is located a bit beyond this, if not in his feet.

David, your list of losers is impressive, extensive as well, and losers they are and have proven to be. Quite clearly. But I miss a couple of names--GM's Wagoner and Herr Rbt. Lutz. Perhaps they are just so bad as not to warrant their recognition by those who have misjudged these many folks so frequently. The sorry 'performance' of their Golden Parachuted charge, GM, would suggest this. And not just for a quarter, or half a year, not even a full one for that matter. But five of them if not more. "Build junk and they will not come", other than for a bunch of die-hards.

In my thinking, Jim Press should not just have passed on that sick and sorry award, but never left Toyota. A World Class Winner company if ever there were one.

But now that I consider this further, with a man like Press, a traitor, as he has proven to be, well, Welcome to the Failing World of Chrysler! Perhaps you deserve it. "Oh, that sinking feeling..."

I have to add that Walter Percy Chrysler, a self-made man of considerable talent, is anything but proud of what his company has become.

Stephdumas

April 8, 2008 9:51 PM

I just digged on the www about some articles about Carlos Ghosn CEO of Renault-Nissan who won the award in 2002, the launch of the full-size Titan pick-up truck was plagued with quality problems and recent articles about Renault seems to indicate then Renault might begin to ran out of steam in Europe.

I wonder if there a way to break this jinx? If the Red Sox menaged to get rid of the Curse of the Bambino, there still some hope.

Gumby

April 9, 2008 1:24 PM

Do we count metallurgical coal effects on global climate change as steel is made and turned into weighty cars and pickups??? Why is it that we dont look at aluminium as a great green initiative because it helps cars and pickups go further on a gallon of gasoline. Why add too much weight to cars and hybrids with hybrid mechanisms and batteries. I believe that aluminium is the best logical next step toward fuel efficient cars and pickups!!

Gumby

April 9, 2008 1:31 PM

If you think Toyotas, Hondas and Nissans are better made, fine, who needs Americans to run our bankrupt government? Lets impeach every politician and hire Japanese to run our governemnt.. too much hypocrisy !! I will hire a Japanese lawyer when I need one since every American lawyer must be driving an import now... Right?

Gumby

April 9, 2008 1:41 PM

You writers are not exactly thinking outside the box at all.. Look, listen, GM and Ford is teeming at bankruptcy ,not to mention recession at our doors. Although I am not advocating censorship, but this is not the time to discuss which make is better . We can tell imports to take a hike until we get back on our training wheels once again at least. Competition is good here and overseas, but common sense should prevail that we have no choice but to limit our choices to domestic makes for now. Just because our government is opening doors to fair trade doesnt mean that we must willy dilly bankrupt GM and Ford in order to observe the guidelines of free trade all the way... We got to use our ears instead of our brains if that is what makes sense for this time being.... Experts, please stay home....

Snoz

April 9, 2008 2:00 PM

The history as quoted points to the obvious: the people giving out the award, the Automative Industry Action (AIA)group, knows nothing about real leadership in the auto-biz. AIA's poor track record exposes the AIA for what it really is: a fraternity. Unfortunately, the media, including BW, have mistakenly construed AIA as some sort of serious testing laboratory laboriously reviewing the past performance of its award recipient. If the saying "The Emperor has no clothes" then BW's David Welch has no brains because why write an article based on a false premise. You get what you pay for and I hope BW would pay its writer more money.

Gumby

April 9, 2008 2:09 PM

Just fire the marketing team now! They are still clueless even about this recession???

Gumby

April 9, 2008 2:31 PM

Perhaps Bill Ford should have hired someone born in Tokyo, japan to come ver and take over Ford . That Japanese would overhaul and add so many fuel efficient models on the dime..

Noz

April 9, 2008 2:54 PM

NOZ
Fine, why dont you just tell all mutual fund managers still holding GM and Ford to dump stocks at once... They are doing their mutual fund investors a great disservice by still holding them until they are liable to go bankrupt one day without any notice of appointment date in advance...
You are not finishing your job of deriding GM and Ford and I am helping you finish your job. Just dont thank me..
Please forward my comment to NOZ, will ya?

Gumby

April 9, 2008 2:59 PM

I wonder if GM and Ford marketing teams can post the estimated dates of bankruptcy announcment based on an ongoing basis of sales performance and profitability. I figure that most Americans still dont have the foggiest notion how seriously the situation is becoming because of the size of GM and Ford. As you know tall trees take forever to fall down when cut. I dont think it is fair to shareholders who put their money guts in GM and Ford financial vehicles to be kept in the dark until next bright morning illuminated by Hollywood sized sign blazing "GM/FORD BANKRUPT!"

Gumby

April 9, 2008 3:03 PM

It is a deadly combination of recession, home foreclosures, stubborn import car buying, and hacking journalists that only suicidal investors would try his luck on Ford and GM stock. I know that the best time to buy is when stocks are low, but for GM and Ford , it is more than just low. It is an abyss on the edge for any daredevil to stand on...

Gumby

April 9, 2008 3:25 PM

Hey, Wagoneer, Lutz, Mullaly, you are no Lee Iacocca!! Lee is one in a billion car guy....

Barrett

April 9, 2008 11:41 PM

Actually, it is not the Sports Illustrated jinx! The jinx is from the Madden NFL video series where every athlete that was featured on the cover gets injured in the following season.

Noz

April 10, 2008 9:54 PM

Great Bleeding Grief! Or Scott if one is Irish. Let's think of Gumby for a moment. Japan's lawyers are not at all like the slimeballs we are plagued with here in The Land of the Free to Sue at the drop of a hat (if you can afford it). In Japan HARMONY is what the people strive for, there are centuries of history to bear this out. In sharp contrast, our entire 'justice system' is based on just the opposite. Ours is an adversarial relationship with vast reservoirs of mistrust and outright lying present and practiced on both sides. Not to mention the client's dollars the lawyers get for their hours or arguing.

I have to add that importing Japanese management to bail our our losers would not work. Our nation's cultures are so different that the older 'native' dolts 'assembling' our flawed nationally branded cars would not take to the mind-bending personal discipline that is everyday behavior in Japan. Just one reason for so many vehicles being screwed together in Canada and Mexico. On the other hand, it is now very clear that the Mid-Westerners and Southerners working for HONDA, Toyota, BMV, even MB, are doing a terrific job and enjoying what they work at. The UAW has made no inroads, as should be the case. Once the situation becomes adversarial, as in American-style unionism, we all lose. And yet this is the roll of unions in the USA. I have to add that this is not the case in Japan. a Once again, with HARMONY the object, the unions are in full cooperation with the various companies to the benefits of all.etc. Toyota's competition is HONDA, and vice versa. We Mrkns forget that we are just a part of a shrinking world, this to our profound loss both now and well into the future.

I have to add just one more thing. A recession? Well for some, yes. But this is a technical term after all, which, in the bitterest of endes has little to do with all of it. That the media is beating the "R" drums so hard means that it is inclined to influence the majority of Mrkns to cease buying. Self-defeating to the max! But then so is the media, in my estimation. Just what the goal is alludes me at the moment. But Chavez/Castro-style Socialism comes to mind. A loser by any measure other than for the bosses...

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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