2/1/2001 | 2 MINUTE READ

Full Disclosure

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Full disclosure: I got to know and respect Dennis K. Pawley when he was with Chrysler and then DaimlerChrysler. He officially retired from DCX in January, 1999; his title at the time was executive vice president of Manufacturing and Corporate Labor Relations. While at Chrysler, Pawley was arguably the chief architect of and major proponent for the Chrysler Operating System; as he would openly acknowledge, it was a variant of the Toyota Production System. While much of the credit for Chrysler's comeback in the 1990s is given to Francois Castaing's engineering talent, Robert Lutz's car-guy guts, Tom Gale's stop-‘em-in-their-tracks designs, and Tom Stallkamp's supplier understanding and relationships, Pawley's incredible transformation of Chrysler's manufacturing operations cannot be overlooked in the turnaround. (He'd attribute it to his "team").

Full disclosure II: I lost track of Pawley after he left DCX. In January, 2000, Pawley took over as chairman and CEO of Guide Corp.(Anderson, IN), said to be the largest North American supplier of headlamps and signal lights. Guide had been part of General Motors, last operating under the Delphi organization before Delphi went independent in May, 1999. In October, 1998, a private equity firm, Palladium Equity Partners, acquired a majority interest in Guide. Pawley had joined Palladium in February, 1999, while continuing other interests.

Maximum full disclosure: Generally, when corporate executives are quoted in news releases, their words border on being a textual example of droning white noise. When I read the following in a news release on December 19, 2000, I nearly fell out of my chair:

"Disturbingly, General Motors is willing to risk its lighting parts supply and union relationships over a dispute involving a few million dollars. As I have tried to work with GM's senior management team to resolve this matter, I have become extremely disillusioned with General Motors' apparent lack of commitment to Guide's success. Unfortunately, this ill-fated approach by the automotive OEMs to improve their financials by wringing profits out of an already stretched supply base seems to be in fashion this winter."

Those are the words of Denny Pawley. He was announcing his resignation from Guide. I figured it was time to give my old acquaintance a call.

Pawley gave me a full briefing on the situation at Guide. When he signed on last year he discovered that the company was characterized by "bad quality, bad delivery, bad labor relations." He and his team went to work bringing all of these issues around by instituting lean, being honest and open with the UAW ("I can't commend them enough," he said), and by working for product excellence. Pawley said the objective was to transform Guide into the highest quality, lowest-cost producer of lighting products in the world. That sounds like executive-speak. Pawley is one of the few people who isn't blowing smoke when he says things like that.

To pull this off it would take more than a new union contract. More than lean systems. More than patents and excellent engineering. Guide needed the assistance of its biggest customer: GM. Guide supplies some 75% of GM's lighting and signal lamps. And try though he did, Pawley couldn't get GM to help. Pawley told GM president & CEO Rick Wagoner that if financial help wouldn't be forthcoming, he'd resign December 15 and tell his story. And so he did to bring attention to a larger issue.

"This is indicative of what's going on in the whole supplier community," he said with what sounded like a mixture of anger and incredulity. "The landscape is being littered with suppliers." About his full disclosure, he stated, "I hope this brings some people to their senses."