Jim Press – Lead By Example

Over the last year, we have heard many stories about the big three automakers and the billions of dollars spent to bail them out and keep them from bankruptcy. Only a few years ago, would anyone have thought these automakers would need such large sums of money to keep them in operations? While these companies were losing market share in those years, they were still viable companies with many loyal customers, employees and shareholders.

Chrysler was one of those viable companies trying different approaches to turn the company around and improve market position. In 2007, they hired Jim Press who was an acclaimed leader at Toyota to help them in this effort (Linebaugh, K. (2009, September 19-20). Chrysler’s Press in Debt Squeeze. Wall Street Journal, p.B5). In his case, they were hiring a proven leader in the industry who had the connections and possible leadership skills to bring Chrysler back into prominence. Now, let’s see how effective their CEO screening process was in that decision.

In a recent Wall Street Journal article, we find Mr. Press is not only leading Chrysler out of bankruptcy but he is falling behind on his own bills, not paying his mortgage payments or his back taxes (Linbaugh, p.B5). In fact, Mr. Press finds himself under a September 2009 tax lien for taxes owed in 2007 (Linbaugh, p.B5). To add to the debt load, liens have been filed against his $2.2 million Michigan home and his $12.96 million townhouse in Manhattan (Linbaugh, p.B5).

It seems hard to understand how the Mr. Press can be leading a company in efforts to avoid bankruptcy while buying extravagant purchases which place him in debt beyond his means (Linbaugh, p.B5). Specifically, is this the same person who is making decisions about significant debt load and the future financial viability of Chrysler?

When companies like Chrysler make decisions concerning their leadership in tough times, what screening process do they go through? Do they employ the same screening criteria as used for first line management or middle management? Does that screening process include credit checks? Is the process thorough and time consuming? After all, they are hiring the leader of the company and the person who needs to set an example on a day-to-day basis.

While the screening criteria for executive selection is likely set by outsiders such executive search firms, I would propose that the selection process should be lead by insiders with clear input concerning culture and shared values. In this case, I think someone missed the mark and Chrysler is likely to pay for such a misstep.