Where was Dr. Z?

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When things go badly wrong at an automaker, the CEO needs to be especially visible and accountable. So when Chrysler posted a $1.5 billion third-quarter loss Oct. 25, the absence of DaimlerChrysler Chief Executive from the conference call with financial analysts and reporters was striking.

To his credit, Zetsche spent more than two hours on the phone Sept. 19th with the same crew, following the profit warning bombshell that forecast today’s big loss. But the responses by his lieutenants Oct. 25 to many probing questions were opague and unsettling. Asked when Daimler would present its findings from an in-depth review of operations at Chrysler, Chief Financial Officer Bodo Uebber wavered and then said, “when we are done with the analysis.” Realizing his answer was alarmingly vague, he finally added, “…by the end of next year.” A year is an eternity in the life of a financial analyst — not to mention a reporter — and it sparked a justified gasp on the part of the analyst with the query.

No one on the call was expecting Daimler to have completed its analysis of the problems at Chrysler yet — even if management has known about Chrysler’s diasastrous pileup of excess inventory since early this year. But a more detailed sense of a turnaround plan and clear targets as well as deadlines for reversing the automaker’s woes were fully warranted. Given the communications debacle over Chrysler’s 2006 sales forecast - a screw-up for which Zetsche has accepted full responsibility — there’s an even a greater need for transparency. The paucity of information Oct. 25 in the wake of a $1.5 billion loss — and the absense of the chief — left the impression of a car skidding out of control.

So Daimler executives shouldn’t be surprised that the financial community is becoming increasingly skeptical about Chrysler’s future — and that of the alliance. Uncertainty is stoking rumors about what unpleasant surprises lie ahead — and just how far DaimlerChrysler’s share price has to fall before private equity groups make a run on the company, eager to make a bundle on its breakup value. The number whispered in my ear is 30 Euros ($38) a share — a 25 percent decline. Zetsche could do much to staunch that kind of talk with more details about fixing Chrysler. The question is whether that’s what he really wants.