| FORTUNE | |
| MotorWorld |  Column archive |
A Detroit 'hero' tells all
After 40 years in the car business, Steve Miller dishes on Iacocca, Lutz, and others.
 |
| Dumped by Daimler and with a new CEO at the helm, Chrysler?s Co-Presidents discuss what it's going to take to turn the automaker around. |
 |
| Steve Miller led auto parts maker Delphi through a tortuous two-year reorganization. |
NEW YORK (Fortune) -- The twin peaks of Steve Miller's auto career came 25 years apart - and both involved a bankruptcy.
As CFO of Chrysler in 1980, he wrestled together a half-a billion dollar loan from a consortium of banks to help keep the company out of bankruptcy. More than two decades later, Miller led parts maker Delphi into bankruptcy and through a tortuous two-year reorganization.
That's not the kind of action that wins you friends, but many in Detroit call Miller a hero. With his hugely impolitic -- but accurate -- remark that Delphi could no longer afford to pay UAW workers $65 an hour to cut its grass, Miller became the first auto executive to frankly address how uneconomic union-scale wages and benefits had become. In so doing, he paved the way for the historic labor contracts of 2007 that may make the domestic auto industry sufficiently competitive to survive.
As my colleague Allan Sloan reports in the current issue of Fortune, Miller's autobiography ("The Turnaround Kid: What I learned Rescuing America's Most Troubled Companies," published by Harper Collins), is remarkably candid, interweaving tales from his business career with an account of his roller-coaster marriage to his beloved first wife.
Auto fans will be more interested in his tales of working with some of the industry's best-known executives. Miller is high on a couple of current GM'ers, praising GM (GM, Fortune 500) CEO Rick Wagoner for his "great competitive spirit" and vice chairman Bob Lutz for his "raw automotive sex appeal." But his accounts of working with two historic Detroit figures are more acid.
When he arrived at Chrysler in 1979 after ten years at Ford (F, Fortune 500), Miller viewed CEO Lee Iacocca with a mixture of admiration and awe. "Iacocca was a superstar," he writes, "one of the few people who understood every element of the industry from design to production to marketing. His energy and sense of purpose made you feel like you were joining not just a company but an important cause."
But saving Chrysler, writing a best-selling autobiography and getting mentioned as a presidential candidate eventually went to Iacocca's head, according to Miller. "For Lee, the pressure to play superstar CEO was enormous," he reports. "Everywhere he went, people recognized him and treated him like a celebrity." Iacocca's deification was tough on his colleagues. "Inside Chrysler, we could all see the signs of Iacocca's tendency toward larger-then-life self-regard," Miller says. "He indulged his taste for luxury travel, at company expense whenever possible, and used more personal attendants and handlers than a cabinet officer."
After Miller openly campaigned with Lutz, who was then at Chrysler, to succeed Iacocca, he and Lee had an epic falling out. Then Miller produced a stunningly thick-headed letter that accused Iacocca of undermining Lutz, and asserted that Chrysler would be more successful after Iacocca was gone. Candid and accurate though it may have been, it greased the skids on Miller's Chrysler career.
By the time Iacocca retired in 1992, Miller was out the door too, but not before presciently warning Iacocca's successor that Chrysler's historically inconsistent performance meant that it runs out of money every five or ten years. Chrysler went through one financial crisis in 2001 and is going through another one today.
Miller is just as tough on UAW president Ron Gettelfinger. Since the opportunities for retribution are frequent and one-sided, auto executives almost never criticize union leaders in public. But Miller is fearless, at least in print. He butted heads with Gettelfinger over Delphi, and found the union boss stubborn, inflexible, and occasionally nasty. After Miller put together what he thought was a reasonable compensation package to keep Delphi executives from departing the bankrupt company, Gettelfinger denounced it as "obscene" and "outrageous," and then attacked Miller personally for disrespecting workers and destroying the middle class.
Miller won the public relations battle by declaring he would cut his own salary to $1 a year. But the war continued. "Gettelfinger's disdain was not confined to me," Miller writes . "He simply couldn't get along with anyone," referring to Delphi's executives as "pigs at the trough." During the last half year of negotiations, Gettelfinger refused to meet personally with anyone from Delphi. Miller concludes: "Gettelfinger was a big disappointment. An industry in crisis needs leaders who can rise above the tactics of intimidation that may have worked decades earlier."
A sadly-shrunken Delphi is due to emerge from bankruptcy in March with a fraction of the union workers it once enjoyed. Miller, now executive chairman, is looking forward to the retirement at his Oregon home that he has been postponing for years He may not get a chance to enjoy it. With the economy now in a tailspin, his skills as "the Turnaround Kid" may drag him off the sidelines once again. 
-
The retail giant tops the Fortune 500 for the second year in a row. Who else made the list? More -
This group of companies is all about social networking to connect with their customers. More -
The fight over the cholesterol medication is keeping a generic version from hitting the market. More -
Bin Laden may be dead, but the terrorist group he led doesn't need his money. More -
U.S. real estate might be a mess, but in other parts of the world, home prices are jumping. More -
Libya's output is a fraction of global production, but it's crucial to the nation's economy. More -
Once rates start to rise, things could get ugly fast for our neighbors to the north. More
