In Charge

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In Charge
Philip Murtaugh

When board members at electric-vehicle startup Coda were looking for someone to bring the company’s sedan to market, they settled on Philip Murtaugh, and no wonder – he has lived automobiles almost his entire life. His father worked at General Motors; when it came time for the younger Murtaugh to go to college, he chose General Motors Institute (now Kettering University), where he could attend classes while working on GM’s assembly line. Murtaugh worked his way up the chain, eventually becoming the go-to guy for manufacturing advice for GM’s joint ventures around the globe. He helped salvage GM’s Isuzu division and then built a joint venture with Shanghai Automotive Industrial Corp. from almost nothing to a $7 billion-a-year operation. He also did a brief stint at Chrysler before joining Coda. Murtaugh, 56, spends at least half of each month at Coda’s operations in China. He met with the Business Journal at the company’s new L.A. headquarters to discuss his automotive career, his challenges at Coda and his kitchen skills.

Question: How did you get started in the automotive business?

Answer: I basically just fell into it. My father worked for General Motors and when it came time for me to choose a college, I chose to go to the General Motors Institute, where I could split my time going to school and working for General Motors. GM paid for most of my education.

Didn’t you ever look at doing anything else?

Not really. When I was growing up in Ohio, I wanted to be a baseball player, but I quickly abandoned that once I realized I wasn’t good enough to make it.

What was your first job at General Motors?

My first job was stoning a door die in a stamping plant.

What’s that?

Using a big stone to polish the outside of a die that was used to make doors. It was real backbreaking work; it took about two months to polish that single die so that it looked like a mirror. By the time I was done, my arms looked like Popeye’s. I suppose nowadays this work is entirely done by machine.

How did you end up working for General Motors in Asia?

I was assigned to work as a manufacturing consultant for GM’s Isuzu division, first in Tokyo and then in England. At that time, Isuzu was the worst off of the five domestic Japanese automakers, even though it was the oldest and wealthiest. The company was hemorrhaging cash and GM and the bankers forced the company to take GM people into their management ranks. Needless to say, I was not welcomed with open arms. The Isuzu folks felt I was this stranger from America telling the Japanese how to improve their efficiency.

So what did you do?

I discovered that Isuzu had a tremendous excess-parts problem: They had virtually no standardized parts along their multiple vehicle lines. I worked to introduce standardized parts wherever possible.

And in England?

I was the main manufacturing consultant on a joint venture between GM and Isuzu. The joint venture was in serious trouble: Neither GM nor Isuzu had been willing to commit the resources to make it work. I convinced the management at both companies that if they wanted to joint venture to work, they each had to accept a little less money out of the joint venture for a while.

Then you returned to Asia, this time with the new joint venture Shanghai GM. What was that like?

Very challenging. You’ve got to remember that back in 1996, when I first arrived, the entire Chinese auto industry was just 600,000 vehicles sold in a year and even that level had grown by leaps and bounds over the previous decade. At General Motors, we had been building cars for nearly 100 years and had learned an awful lot about how to build cars. There was a tendency of GM management to try to tell the Chinese how to build cars. Of course, the management at (Shanghai Automotive Industry Corp.) thought they knew everything about the Chinese market. My job was to convince both management teams to overcome their cultural prejudices. It took quite some time.

How did you handle the language barrier in Japan and China?

We worked with translators with all business transactions. I learned a little Japanese due to very little English ever spoken. I learned a little bit of Chinese, but not as much. Many Chinese I worked with spoke English.

Was it difficult for your children to adjust to living in these different countries?

Our children lived nearly their entire lives outside the U.S. The experiences and learning they gained were immeasurable, and they value these experiences very much.

What was China like when you were there?

The entire country transformed right before my eyes. When I first arrived with my wife and children, we had to wash the vegetables to kill the bacteria we knew were there. And it was difficult to find meat. It was like a third world country. By the time I left Shanghai GM, Shanghai had turned into one of the most modern cities in the world with every modern convenience one would expect and then some. Even from week to week when we were living there, the pace of change was breathtaking. There’s nothing like that in the U.S.

So why did you leave General Motors?

GM had grown into an unbelievably bureaucratic behemoth, increasingly slow to change. That’s why I left, first going to work directly for SAIC and then to Chrysler. By 2007, when I joined Chrysler, that company was more nimble and amenable to suggestions to change the way it did things.

But you didn’t stay long.

My problem at Chrysler was bad timing: Not long after I joined the global financial crisis hit and Chrysler simply ran out of money. So I was let go.

What did you do then?

I did some consulting work for a Chinese company that tried to buy Hummer; that deal was ultimately scuttled by the Chinese government.

What did you find when you took the helm at Coda?

Coda’s electric sedan wasn’t ready when I came on board. The management team had done a great job on instilling a values and belief system about the commitment to electric vehicles. But they didn’t have on board people who knew about the auto industry. A lot of stuff had been missed, so the car simply wasn’t ready.

Can you give an example?

Yes. The previous management had decided that Coda would not only make the car, but would also be in charge of selling the car directly to customers instead of using the traditional dealer network. I’m not sure why they did this, but it seemed to have something to do with a mindset that dealers are “bad.” My experience is that’s most emphatically not true. Also, nobody at Coda had expertise in financing and servicing vehicles, two crucial components that you find at most quality dealers.

So this is one reason why the release of Coda’s electric vehicle has been delayed?

Yes, we had to take the time – nearly six months in all – to find good dealers willing to work with us and to educate those dealers on the Coda electric vehicle. Also, we wanted to do more testing of the vehicle. You don’t want to release a vehicle and then have things go wrong when they are in customers’ hands.

So where do things stand right now?

We had the glider components (vehicle minus the power train) and the battery packs for 24 vehicles arrive at our Benicia plant in mid-January from China, ready for final assembly. First deliveries should be ready by mid-February.

What’s your typical day like here at Coda?

First, I’m actually not here all that much. I spend about two to three weeks each month in China, mostly on the operations and engineering side. When I’m in the U.S., I split my time between here at our Los Angeles headquarters, and New York and Washington, D.C.

Why so many trips to New York and D.C.?

New York is where the financing is and Washington, D.C., is the political schmoozing side of things. We’ve applied for a Department of Energy loan for a battery plant that we are seeking to build in Ohio. We want to take the jobs that we currently have at the battery plant in China and transfer those jobs to the U.S. But there’s a lot of politics involved in this process.

So what’s your day like when you’re here in Los Angeles?

A lot of meetings, of course. I get up early, go to work, work really late and then go to bed.

How do you balance all of this with your family life and your hobbies?

I like to work. When the kids were growing up, I made sure I spent time with them. But now that they are all grown and on their own, I put more time into work. I do spend some vacation time visiting my children; I recently spent time with one of my children’s family in Alabama.

You mentioned you like golf and cooking.

Yes, though I don’t get to do much of either one these days. I can cook a mean steak Dianne (pan-fried filet mignon) and a mean Caesar’s salad.

What’s the best piece of advice you’ve received?

I can’t say there’s one piece of advice that stands out. But my favorite learning is that you have to find win-win solutions to be successful. I know that sounds cliché, but I say this from 20 years of experience with joint ventures. When there’s a loser on one side of a bargain, it’s a bad deal. In almost every case where a joint venture fails, it’s because one of the parties tries to find a way where there’s only one winner.

Is that kind of solution hard to find?

Not hard to find, but it’s tough to do. It takes a lot of work.

Philip Murtaugh

Title: Chief Executive

Company: Coda Automotive Inc.

Born: Wayne County, Ohio; 1955.

Education: Bachelor’s in mechanical engineering from General Motors Institute (now Kettering University) in Flint, Mich.

Career Turning Points: Leaving General Motors and joining Shanghai

Automotive Industry Corp.; joining Coda Automotive last year.

Most Influential People: Father, who worked for General Motors.

Personal: Splits time between China and Los Angeles while looking for home in L.A. area. Wife, Janet, a homemaker; four grown children, ages 25-31.

Activities: Golf, cooking; prefers to use most off time for additional work-related activities.

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