There are no faceless CEOs in the auto industry today. On the contrary: People in the car business worry about a cult of personality developing around the current generation of company leaders. General Motors’ Dan Akerson finds himself in the newspaper whenever he supports a charity; Fiat-Chrysler’s Sergio Marchionne has become the industry’s latest miracle worker due to his surprising revival at the home of Jeep; and Ford’s Alan Mulally has been accorded near God-like status in recognition of his automaker’s historic turnaround.
Personality cults work as long as good things keep happening for the object of adulation, but downturns can be brutal. Look at what’s happened to the reputation of Renault-Nissan’s Carlos Ghosn since his EV forecast fell short. Mythologizing a leader can also take a toll when it comes to developing a succession plan. Who wants to follow a hero? There isn’t much room on the upside. High-performing CEOs often have the benefit of fortunate turns in the economic cycle that twist in the opposite direction once they leave office.
But having a big guy at the top is scant price to pay when you consider the wreckage that a bad CEO can inflict. Management mistakes in the auto industry are more painful than almost anywhere else. Enormous capital investments mean that losses can easily reach billions of dollars, and long product cycles mean that a wrong turn can hobble a company for a number of years.
With that in mind, here’s my list of the worst CEOs in the history of the auto industry:
1. Henry Ford
President, Ford Motor Co.
A brilliant inventor, Ford was a terrible CEO. He never believed in accountants, so he never knew how much his company was making — or losing. Stubborn to a fault, he refused to make styling changes in the Model T as its sales wound down in the mid-’20s. When he finally agreed to introduce the Model A, he shut down production for 17 months to get ready. General Motors (GM), which had already started annual design updates, passed Ford (F) in annual sales and has seldom relinquished its lead since then. After the death of his son, Edsel, in 1943, Ford reclaimed the title of president, but increasingly unstable, he was forced from office in favor his grandson, Henry II.
2. K.T. Keller
President, Chrysler Corp.
A machinist by trade, Keller was a micromanager at heart. Chrysler’s organization chart was said to resemble a wheel with Keller at the hub but no rim that allowed the spokes to communicate. Design took the biggest hit. Because he insisted on high-roofed cars that allowed people to wear their hats inside, Keller consigned the automaker to several decades of unfashionable, though functional, autos. As late as 1949, he ordered that one-and-a-half inches be added to the height of all Chrysler vehicles.
3. Fred Donner
CEO, General Motors
GM’s most influential bean-counter ran the company from its old New York City offices on Columbus Circle, and in his unwillingness to get his hands dirty, Donner redirected the automaker from product engineering to financial engineering. “A car is a whole series of engineering compromises,” he once said. “You can’t have everything.” Donner’s “compromises” are blamed for the failure of the rear-engined Corvair. The accountants he promoted would terrorize GM with their financial fly-specking for another generation.
4. John Z. DeLorean
CEO, DeLorean Motor Co.
After raising $200 million to build his gull-winged, stainless-steel-bodied sports car, DeLorean opened a factory in Northern Ireland where he discovered that raising money was easier than actually building cars. Cost overruns and slow sales sent DeLorean looking for more capital, which in turn made him the subject of an FBI sting operation. In 1982, he was charged with conspiring to smuggle $24 million worth of cocaine into the U.S. While he was eventually acquitted, his company collapsed, and DeLorean’s car is best-known today for its role in the Back to the Future movies.
5. Roger Smith
CEO, General Motors
When Smith took over, GM’s U.S. market share was 46%. It was 35% when he left. In the process, he wasted billions trying to revive the sagging giant through diversification (EDS and Hughes), automation (robotized factories), reorganization (two superdivisions B-O-C and C-P-C), commonization (GM-10 cars) and experimentation (Saturn). Smith’s legacy was a fleet of low-quality, lookalike autos, an unqualified successor, and a mountain of debt that pushed the company close to bankruptcy in 1992.
6. Bob Stempel
CEO, General Motors
Stempel was the loyal soldier who couldn’t bring himself to undo Smith’s mistakes until a deep recession pushed GM close to the financial brink. When he finally produced a restructuring plan, Stempel dithered on actually executing it. In the process, he lost the confidence of the board of directors, who pushed him and his leadership team out in an historic coup. It would be another 17 years before GM resized itself and got its costs under control with the help of the federal government.
7. Bob Eaton
Eaton became a hero during the first half of his tenure as a boom in light trucks produced a seller’s market for Chrysler’s pickups, Jeeps, and minivans. But he got outmaneuvered during the Daimler-Chrysler combination, leaving Chrysler shortchanged in what was famously called “a merger of equals.” Eaton left behind a damaged company when he prematurely retired to Florida with a personal treasure in stock and options worth tens of millions. Chrysler would be judged worthless seven years later.
8. Jürgen Schrempp
Chairman, Daimler Benz
The ultimate big thinker, Schrempp was building a global empire when he bought Chrysler for $38 billion in 1998. Always better at concocting grand schemes than actually executing them, he failed to get his American and German employees to effectively work together. Chrysler continued its history of boom-and-bust cycles after German managers took over, and after one bust too many, Schrempp suddenly resigned his chairmanship with his world-enveloping strategy in tatters.
9. Jac Nasser
CEO, Ford Motor Co.
Determined to shake up Ford, Nasser tried to remake the automaker in the image of General Electric, redefining it as a consumer products company and investing billions in new brands like Volvo and Land Rover, dealerships, and junkyards. At the same time, he installed draconian and wildly unpopular employee-rating systems to reduce headcount and improve productivity. Unluckily for Nasser, he made his big moves on the eve of a deep recession and made the mistake of forgetting whose name was on the building. Ford would spend nearly a decade unwinding the residue from his acquisition spree.
10. Henrik Fisker
CEO, Fisker Automotive
Like many entrepreneurs before him, car designer Fisker had big plans for the company he co-founded, and he dreamed of producing 100,000 cars a year. But styling a beautiful car was the easy part of the job, and Fisker Automotive was derailed by technical problems with its plug-in hybrid drive system and the bankruptcy of a key battery supplier. No cars have been built for weeks now, and the money is running out. Fisker turned the CEO job over to a production expert in 2012 and left the company entirely this March over strategic differences as his successors frantically searched for additional financing from overseas sources.