Saturday, February 21, 2009

Why Ford > GM > Chrysler

Oil and Gas Companies

Company, 2008 Market Cap, CEO Educational Background
1) ExxonMobil $366 B: Civil Eng.
2) BP CEO $133 B: Geology
3) Chevron CEO $131 B: Chemical Eng.
4) ConocoPhillips $ 75 B: Business
5) OXY CEO $ 37 B: Chemistry
6) Encana CEO $ 32 B: Petroleum Eng.
7) Devon CEO $ 32 B: Geology

Notice a common thread?

Oil and gas companies are defined by their ability to explore and produce. E&P is the lifeblood of the company. Notice how the largest oil and gas companies, integrateds and independents alike, are run by either engineers or geoscientists?

At its core, a vehicle company is defined by its vehicle engineering. I'm wondering, perhaps vehicle companies should be run by engineers?

Toyota's ascent to become a global vehicle superpower occurred under two engineers

Toyota: (Engineer) (Engineer)

Whereas its recent disastrous expansion into pickups as well as its construction of factories in Japan on the basis of short term currency foreign exchange rates that has contributed heavily to the first loss in dozens of years was the result of (Economics major)

Notice how Ford has performed far better than Chrysler and GM?

Chrysler: (Business major)

General Motors: (Economics major)

Perhaps because you have this engineer at the helm, Ford has outperformed: (Engineer)

As soon as Alan Mulally came to the helm at Ford he mortgaged all the assets at the height of the credit boom, because of liquidity concerns, whereas the CEO's of Chrysler and GM sat on their laurels...

Speaking of Chrysler, someone at Daimler had the foresight to jettison the brand before it took down the maker of the Mercedes-Benz:

Daimler AG (Mercedes Benz): (Engineer)

Oh but wait we also have:

BMW: (Engineer)

Porsche: (Engineer)

Renault AND Nissan: (Engineer)

I'm seeing a bit of a pattern here.

It would be nice if someone could do a comparative study of vehicle company management under engineers versus non-engineers.... or maybe take a different industry that has a greater number of companies, say independent oil and gas, looking at geoscientists/engineers vs. other ceos.

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