The Blue-Collar CEO

For a carmaker, choreographing an elaborate new model show for its dealers can be as routine as an oil change. But at a rehearsal last month for a Chrysler extravaganza inside an enormous Las Vegas arena, the carmaker's past and future leaders struggled to pass the baton. The script called for the UNLV marching band to blare "Viva Las Vegas" while high-stepping through a crowd of 7,000 car dealers to deliver a baton to the stage, where former Chrysler CEO Dieter Zetsche was to hand it to the new guy, Tom LaSorda. But the day before the show, as the execs rehearsed without the band, it was clear the new model is nothing like the old one. Zetsche, with his vaudevillian mustache, is a natural, mugging for the imaginary crowd while grabbing for a baton twirled by a lone UNLV majorette. LaSorda, a former factory boss, was awkward under the hot lights. He stepped on Zetsche's lines, stood in the wrong spot and struggled to read the tele-prompter. Finally, the big moment arrived: Zetsche snatched the baton from the majorette, handed it to his protege and exited. LaSorda, suddenly looking lost, shielded his eyes and yelled out: "Now what the hell do I do with this baton?"

Just don't drop it. Chrysler, unlike its chaotic crosstown rivals, is actually on a roll. While GM and Ford are losing billions selling cars this year, Chrysler's operating profits rose 43 percent in the third quarter thanks to hot sellers like the Chrysler 300C and Dodge Charger. Now, as Zetsche heads home to Germany to become chairman of DaimlerChrysler, the pressure is on LaSorda, 51 (no relation to that other Tommy Lasorda), to keep Chrysler's mojo rising. Next year, LaSorda will introduce a record 10 new models, including a redesigned minivan with a hip-hop attitude inspired by the 300C (Snoop's ride). Pulling that off would test a seasoned CEO. And typically, the hands on the steering wheel of an auto company belong to bean counters (GM's Rick Wagoner), scions (Bill Ford) or design specialists (GM's Bob Lutz). But LaSorda comes armed with a background that uniquely qualifies him to tackle one of Detroit's most intractable problems: runaway labor costs. He's the first child of labor leaders ever to rise to CEO of a car company. LaSorda's father, Frank, was the union president of Chrysler's Windsor, Ontario, minivan plant. And his grandfather, Harry Rooney, nearly went to prison for organizing a 122-day strike at Chrysler in 1946. Apparently, all is forgiven. In these times, Zetsche says LaSorda's union roots are "a real asset. He understands this work like no one else."

So as Wall Street jeers GM for eliminating only 30,000 workers and cheers Delphi for slashing wages, LaSorda sees Detroit's devastation differently. "I look at families today and say, 'What would I do if I was thrown to the street?' " he says. "If you've ever worked from the floor up, you can't forget where you came from. Some people at the top forget that because they've never worked there. They don't know what it's like." LaSorda sure does. When he was a kid, his father would be laid off for six months at a time. With nine kids to feed, Bea and Frank LaSorda had to get creative. Frank learned to hunt rabbits. Bea grew tomatoes in the backyard of their 900-square-foot home, where they still live in a tidy working-class neighborhood overshadowed by Chrysler's massive Windsor factory. "Why would we move?" says Bea, 73, sitting with Frank, 76, in a cozy living room where "wall to wall" kids once watched "Hockey Night in Canada." "There's too many memories here." Tom recalls hard times when there wasn't enough to cover the mortgage, groceries and the heating bill. "You'd go without a lot," he says. "I don't live paycheck to paycheck now. But the bulk of our work force does. And that's something, from our family roots, that hits home."

But does LaSorda's labor cred make him a working-class hero at Chrysler? Well, it doesn't hurt. The same United Auto Workers union that appears ready to go to war with GM and Delphi have quietly acquiesced to severe job cuts and contract changes on LaSorda's watch. Since he arrived at Chrysler in 2000 to run manufacturing, after 23 years at GM, he's sliced 24,000 workers from the payroll. He also negotiated a groundbreaking contract at a Toledo, Ohio, Jeep plant that allows outside suppliers to come in and run major parts of the factory, like the paint shop. Savings to Chrysler: $800 million. Factories like that are viewed as the shape of the new manufacturing machine, though unions have fiercely resisted them. LaSorda persuaded the UAW to go along in Toledo by promising to set up an auto-parts industrial park nearby (with plenty of new jobs). Last week the UAW voted to consider giving Chrysler the same health-care concessions it recently granted GM--even though Chrysler is in much better shape. "You don't do innovative things," says a UAW spokesman, "unless you have a good working relationship."

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Where LaSorda ultimately wants to steer Chrysler, though, is out of the Big Three. He'd rather move with the fast crowd: Honda, Nissan and Toyota. "They're the force to be reckoned with," he says. For now, Chrysler is not in their league, making just $500 per car while Toyota banks $2,000 on each model it sells. "Chrysler is on the edge of a cliff," says analyst Sean McAlinden. "They can look down on the rocks and see GM and Ford and look up on the mountain and see Toyota." To climb that mountain, LaSorda intends to boost Chrysler's sales by 1 million cars by 2010. Phase 1: next year's new-model onslaught, which will see Jeep double its offerings and Dodge return fire on the Mustang with its own retro-cool Challenger muscle car. LaSorda runs his product-development machine as lean as his factories: Chrysler now spits out 50 percent more new models on a budget that's been cut from $8.5 billion to $6 billion since 2000. "More with less," he says, smiling. "That's the secret of our success."

That's also the mantra for LaSorda's career. At GM, he became a specialist in "lean manufacturing"--operating factories with the fewest workers possible. "He's definitely his own person," says Canadian Auto Workers president Buzz Hargrove, a long-time friend of Frank LaSorda's. "Tommy is doing things his father probably fought against." LaSorda became a star in the early '90s by transforming an old communist car factory in the former East Germany into a model of efficiency for GM. By the end of the decade, though, his path to the top was blocked, so he jumped to Chrysler. "I've always wanted to run a company," he says.

LaSorda might never be a Vegas showman. He doesn't even act like a wealthy auto exec: he's still married to his high-school sweetheart, Doreen, his two daughters went to public universities and he refuses to buy a second home. "I don't need that stuff," he says. LaSorda is most at home around regular working people. Last month he spoke at his father's union hall. It was the first time a Chrysler CEO had ever been there, though LaSorda reminded the crowd he'd checked most of their coats 40 years before. "Years ago," said an emotional Frank LaSorda, "I wouldn't have sat at the same table with a guy like Tom." But this Chrysler CEO received a standing O. "When you're running a business, you do what's best for all ," he says. "Some people forget that when they're sitting in the boardroom." No worries about that happening to this blue-collar CEO, Chrysler's newest hybrid offering.

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The Blue-Collar CEO | News