Respect for The Ranks

From interviewer/qualifier to HR vice president, DaimlerChrysler's Nancy A. Rae has embraced the changes and challenges along the way.

Thursday, October 2, 2003
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Nancy A. Rae's first job after graduating from college in 1978 was as an interviewer/qualifier at Chrysler's truck assembly plant in Warren, Mich. Even now, she vividly remembers how some of her co-workers received a small cake from human resources to help them celebrate their one-year anniversary with the company.

Rae never dreamed she would get that one-year cake; one year seemed like a lifetime then. Not only did she get it; this year, she received a bigger one, along with a surprise party to help her celebrate 25 years with the company.

Since July 2000, Rae has served as the senior vice president of human resources at DaimlerChrysler Corp. in Auburn Hills, Mich. While reporting to Chrysler Group President and CEO Dieter Zetsche, she leads her department -- composed of 800 employees -- in the areas of talent acquisition, performance management and development, diversity, compensation and benefit programs, succession planning, organization and change management, HR services and systems, and special security and corporate services.

Under Rae's leadership, the company has successfully worked through a three-year turnaround, soon to be completed, that will cut costs by more than $70 million; she has also been responsible for millions more in additional savings by making tough, smart decisions at crucial times. It is for this ability to lead such a large HR staff through monumental change while achieving greater efficiency that Rae has been named one of Human Resource Executive's HR Honor Roll recipients for 2003.

Leader in the Making

Rae's ability to effectively steer DaimlerChrysler's HR has been in the making for years. Armed with a master's of arts degree in industrial relations from Central Michigan University and a bachelor of science degree in business administration from Eastern Michigan University, Rae has held 19 different HR positions with the automaker throughout her career. There's not an area in HR she hasn't tackled and enjoyed. They all intrigue her, she says, which is what attracted her to the profession in the first place.

She recalls her first executive position as compensation manager in the vehicle engineering and design office back in 1988. She was in the job for just six months when the office was totally reorganized.

"On one Friday, literally 6,000 engineers went home and returned to work on Monday morning to new positions," she says. "I learned about the technical aspects of reorganizing and structure from a compensation standpoint. It was wonderful to have been a part of this."

She recalls a time when she served as labor relations representative for service and parts personnel in 1981. Back then, labor relations was a nontraditional profession for women. Defying convention, she quickly developed negotiation skills and became adept at leveraging relationships and people's trust.

Up to the Test

There's no doubt that Rae enjoys a healthy challenge. Perhaps the biggest one of all came in 2001, when the Chrysler Group of DaimlerChrysler announced its three-year turnaround plan designed to cut costs and boost revenues.

Part of the plan included a reduction of 26,000 employees and an operating profit of more than $2 billion by the end of 2003.

Rae developed a workforce-reduction program that retained top talent and reduced salaried employees at all levels. In the end, she created a net annual savings of more than $70 million over targeted projections in 2001 and an additional $2 million the following year.

But she saved millions more elsewhere: $2 million by partnering with federal and state agencies instead of outplacement service providers to deliver career-transition services; another $5 million in office-leasing costs after consolidating metro-Detroit facilities and personnel, and more than $11 million between 2001 and 2002 by containing other HR costs.

The plan's challenge, she says, was in its magnitude and timeline.

"Planning a voluntary separation program ideally takes six months," she says. "We had six weeks. I also had to provide the leadership within my own organization and be at the table upstairs (demonstrating) how involved HR was in accomplishing the turnaround objectives."

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At the same time, Rae was developing and overseeing other activities such as the National Supplier Pharmacy Buy Partnership Program, implemented in 2001. It enables the company to purchase pharmaceuticals in volume, then pass the savings onto their suppliers, who, in turn, offer discounts to employees. Another, Dashboard Anywhere, an employee portal launched last year, gives workers online access to everything from their time cards to confirmation of direct-deposit paychecks.

Some of her time is also spent co-chairing the company's diversity council, a 12-member committee representing the top people in each of HR's core functions. It meets monthly to strategize ways the company can leverage its external relationships, such as with vendors or the federal government, to improve diversity. The committee is supported by two high-level external advisers, who were engaged by Rae, to lend perspective on reaching the African-American and Hispanic communities.

The Chrysler Group has received numerous awards because of its diversity program, which she says is a priority among its top leaders. Likewise, the company's crisis-management process, developed by its crisis-management team, was also recognized as a benchmark by the Michigan Emergency Management Coordinator.

Not surprisingly, Rae chairs that team, too. Its 25 members come together every six months to participate in tabletop exercises. They receive partial information about a simulated crisis, sometimes from outside agencies like the media, then make time-sensitive decisions toward resolving the crisis. Rae says the experience demonstrates how people react differently and helps them become better prepared to manage any crisis that may occur.

If the next 10 to 20 years of her career contain even a fraction of the changes and challenges she has experienced at Chrysler, they should be interesting years, indeed.

She plans to play a key role in integrating the Chrysler Group into DaimlerChrysler while taking full advantage of huge merger opportunities.

"I do have high expectations of myself and the people who work for me," she says, explaining that she makes every effort to create a teamwork environment and recognize individual achievement.

Meanwhile, she has no desire to work anywhere else. Her HR career at Chrysler has been very rewarding, she says, mainly because the learning never stops.

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