Fiat Chief Shuffles Chrysler Exec Lineup

Fiat Chief Shuffles Chrysler Exec Lineup
http://www.businessweek.com/bwdaily/dnflash/content/oct2009/db2009105_270203.htm

The heads of the Chrysler and Dodge brands are pushed aside as CEO
Sergio Marchionne moves quickly to put his stamp on the troubled company

By David Kiley

Just as Chrysler is readying announcements about new product plans and
brand positioning, two of the people who were recently appointed to head
those brands are leaving under pressure.

The unexpected moves may reflect the dire straits facing Chrysler as it
struggles to maintain market share and cash flow after emerging from a
government-assisted Chapter 11 filing. But they also fit with the
well-known impatience of Chrysler's new CEO, Sergio Marchionne, who has
a track record at Fiat (FIA.MI) for hasty firings of executives who
don't follow his direction in lockstep.

Sources who have worked for Marchionne at Fiat say he swept out many
executives when he took over that company in 2004 and even fired some
managers during meetings.

Chrysler said Peter Fong, who was handpicked by Marchionne out of the
company's middle ranks last summer to be head of Chrysler sales as well
as chief executive of the Chrysler brand, is leaving for "personal
reasons." Marketing chief and Dodge brand chief Michael Accavitti is
leaving to "pursue other interests." The two were appointed to those
positions in a significant restructuring of the company in August.
Sources close to the company say the executives were pressured to leave
over differences they had with Italian managers who have moved into
leadership positions since Fiat took a 20% stake in Chrysler earlier
this year.

Chrysler's New Brand Chief Is Fiat Vet

Olivier Francois, a Fiat veteran who recently headed up Fiat's Lancia
brand, will take over at Chrysler, while Ralph Gilles, chief of product
design at Chrysler, will take over the Dodge car brand. Michael Manley,
head of product development and chief executive of the Jeep brand, will
stay in his post.

As previously reported by BusinessWeek, Chrysler is breaking the Ram
pickup out of the Dodge brand and rebranding as "Ram" its trucks, as
well as future commercial-grade products. Fred Diaz Jr. has been named
president and chief executive of the Ram brand.

The move to name Gilles as head of Dodge mirrors a move recently made by
General Motors to name its head of North American design, Bryan Nesbitt,
head of its Cadillac brand.

The timing of Fong and Accavitti's departures follows a disastrous sales
month; Chrysler's September sales plunged 42%. Also, the company is
trying to complete a review of ad agencies to create new advertising and
marketing for Dodge and Chrysler in the fourth quarter and position
those brands for the longer term.

Chrysler is in an unenviable spot. Its current products get low marks
from Consumer Reports' and J.D. Power & Associates' quality rankings.
The brands have been damaged by the parent's Chapter 11 filing. And new
products arising from the Chrysler-Fiat alliance won't hit showrooms for
more than two years.

Culture Clash

Sources close to Chrysler said Fong drew fire inside the company for
reducing incentive spending too much after the federal cash-for-clunkers
program expired at the end of August. CEO Marchionne is due to lay out
his product plan to Obama Administration officials this week and will
have to explain the deep sales drop, as well as the executive churn so
early in his tenure.

According to insiders at Chrysler, the early days of the Marchionne era
have also been marked by some culture clash between Fiat and Chrysler
executives. That might have been inevitable. Accavitti, for example,
despite being head of marketing at the company, played a low-key role in
a round of meetings Chrysler executives recently had with ad agencies.
Instead, Giovanni Perosino, Fiat group marketing communication director,
dominated the meetings. And while Marchionne will have final say about
the selection of agencies and strategies, he was not present for the
agency pitches. Instead, the work, screened by Perosino, will be
re-presented to the CEO later this month.

The appointment of Francois to run the Chrysler brand coincides with a
strategy hatched by Fiat managers to try and elevate the Chrysler brand
to the same price and prestige territory as GM's Cadillac and Ford's (F)
Lincoln, to launch products co-developed by Fiat and Chrysler, and to
persuade buyers of entry-level cars from German and Japanese luxury
brands to give Chrysler a look.

Several of Chrysler's American managers have expressed private
opposition to the strategy, reasoning that the company would be
foolhardy to try and quickly move Chrysler—which sells minivans and a PT
Cruiser selling below $20,000—into luxury territory.

Ram Brand Questioned

The decision to split off Ram as its own brand, too, strikes American
executives as curious. "It is a very European perspective on the
American pickup truck market," says Earl Hesterberg, CEO of Group One
Automotive, one of the biggest automotive retailing companies whose
operations include several Chrysler dealerships.

Chrysler has been combining its Chrysler, Dodge, and Jeep franchises
into a single dealer sales network. The company plans to add the Fiat
500 under its own name to the mix in two years. So splitting off Ram as
its own brand means the company will be managing five distinct brands in
one network of showrooms within a few years—six brands, if you consider
that a selection of Chrysler dealers will also be tapped to distribute
Alfa Romeo vehicles for Fiat in the U.S.

 

These dago's are fighting a turf war inside chrysler, running it like a
mafia.

Was Marchionne lecturing them in these meetings, making baseball
analogies, maybe even holding a baseball bat while walking around the
meeting table?

That's this week. Who will it be next week?

Manley doesn't sound like an italian name. He won't be there much
longer.

I can't imagine Ram as the name of a division. What name would they
then give to light-duty pickup trucks? What would they call them? Ram
what? Dodge Ram is iconic. How would they replace it? This will be a
real bone-head move, doomed to failure.

So why does it take 2 years to scrape a Fiat badge off a car and replace
it with a Chrysler one?

It would work if Chrysler only sold high-end sedans (no minivans, no
small cars), and they brought back Plymouth and used it to sell small,
low-end cars and low-end minivans. Mid-sized, mid-priced cars and
high-end minivans would still be sold under Dodge.

 

I like everything I read about Marchione, maybe there is some hope yet.
The first thing I read about him was that he moved his office down from
the executive floor to the engineer's floor which means that he is
putting the priority on building good products. These firings show that
he is decisive, the only way they can succeed is by radically remaking
the company. The choice of Giles as head of Dodge is also promising,
Giles designed the 300 which was the only real hit that Chrysler has had
in years and the only car that has the potential to be a classic that
Chrysler has produced in 50 years.

Clear brand differentiation also makes sense. Chrysler will never be able
to compete directly in the luxury segment, their dealer network can't
provide the level of service that luxury buyers expect, but they can
compete in the near luxury category. I think it makes sense to limit the
Chrysler nameplate to 300C class products, high style, full sized fully
equipped cars. Use the Dodge nameplate for family cars, Jeeps would still
be Jeeps (that was the only clearly differentiated product line that they
had), and calling the trucks Ram probably makes sense also because it
means that a Dodge would clearly be a car and a Ram would be a truck.

The one thing in that story that's disturbing is that they can't get any
new product out the door for two years. I don't see how it's possible for
them to survive for two years with their current lineup, and there is no
way in hell they are going to get a 3rd government bailout. I assume the
problem is that you can't get a car certified by the DOT in less than 2
years which seems insane, if a car is safe enough for Europe why isn't it
automatically safe enough for the US?.

 

He hires and fires people in a helter-skelter way. And you like that?

They show he made a poor choice in hiring them in the first place. Or
they show he can't make proper decisions, or let people do their job.

It's a step backwards for Chrysler design and product development. Who
replaces Gilles as chief of design?

Isin't it nice for Gilles that he gets to be head of Dodge and oversee
Ram being cut away from Dodge?

It was a hit for some people for the first year or two it was out.

It's based on the LX platform - an albatros - a heavy chasis dependent
on expansive and outdated Mercedes components. You can't build a
decent, fuel-efficient sedan based on that platform. The tonka-toy,
fisher-price style is no longer popular.

It's in-you-face styline is anything but classic. It was a novelty
design, shamelessly copied from Bentley. It's as much a "classic" as
the PT Cruiser is (or isin't).

You can't do it with essentially a single model and trick it out with
different trim options. That's the big problem with the LX-based 300.

Chrysler had it right with the LHS and the 300M. Those cars didn't have
to do double-duty by being differentiated into lower-priced versions.
The 300N could have competed with the best that Lincoln and Cadilac
offered, and been a serious alternative to mid-class Merc, BMW and
Lexus.

It doesn't make much sense. It paves the way to sell Ram at some point
in the future, along with Jeep. Again, what do you call the current
"Dodge Ram" ? The Ram - what?

And that's needed because ... ?

And I've been saying that for some time now.

The real reason is the Fiat knows full well that their flagship consumer
cars (the 500 and derivatives) will fail miserably in the US, whether
rebadged as Chryslers or not. But that was the card they played as part
of being given 20% stake in Chrysler for essentially nothing in return
but mafia-style management. They want to rape Chrysler for as long as
they can before someone realizes that there will never be a Fiat-based
Chrysler car.

Note the very last sentence of the quoted news story:

This is where Fiat's real interest lies. They wanted an instant US
dealer network for their high-end vehicles. All this talk about
providing Chrysler with a small-car platform was just a smoke screen.

 

50 years! What about the '57 300? Some consider it the best of the 300
series!


I think it makes sense to limit the

I agree that Dodge should be the basic line of cars, that is what Walter
P. Chrysler thought when he bought Dodge in the late '20's.
The word "Ram" also referred to the engine line, and of course the
iconic hood ornament on all Dodge cars from the '30's through the '50's.
I also think that Plymouth should be brought back to market low-price
cars/vans, again, just like WPC wanted when he came out with the
Plymouth in the first place.

 

I agree, the Fiat 500 is not right for American tastes. Even when it
was available in the '50's and early '60's, it was a piece of crap! My
step-father had one, always fixing it, breaking down, came pre-rusted
from the factory!
You are also right about wanting the dealers. I have not seen an Alfa
since I was in college, so I guess they think that is the way to get
them back into the US market.

 

By my calculation 1957 was 52 years ago which was my point. I can't think
of a single Chrysler product since the 50s except the 300C that could
draw stares. When my 300C was new (in 05) and I went to a restaurant with
valet parking they would leave it out front with the Mercedes and BMWs,
I've never had that happen with any other car that I've owned. I still
think it's a classically beautiful car even though the lousy Chrysler
quality is starting to worry me and I have no doubt that in 50 years it
will draw looks just like a 57 would today.

 

Since I own an original 1941 Chrysler Windsor 4-door, I agree with most
'50's cars being crap. The only exceptions I would have would be the
50-52 Chrysler Imperials, the 55 Chrysler/Dodge line and that's about
it. Never did like the Exner "Forward Look" with the fins. My taste
runs to flathead engines, both 6 and 8, Fluid Drive, long hoods, short
trunks. That is one reason that I bought my first new car in years, a
2003 PT Cruiser sedan, and later, my wife got a 2005 PT Convertible.
Got rid of them due to trying to make them into something they were
not(antique look likes to match my 1941),and the poor fuel mileage. Our
"modern" car is now a 2007 Dodge Caliber, good car, great mileage, and
A/C! Found out that 45 1941 Chrysler Crown Imperials came with factory
air, but good luck finding one!

 

REALLY?!? Off the top of my head, I can think of a whole list that
generated FAR MORE interest than the 300C did:

-1964.5 Barracuda
-1967 Plymouth GTX
-1968 Roadrunner and SuperBee
-1966-67 Dodge Charger (fastback)
-1971 Plymouth Satellite and Roadrunner
-1968-1970 Dodge Charger (Bill Brownlee coke-bottle body)
-1970 Chrysler 300 Hurst Edition
-1969 Dodge Daytona
-1970 Superbird (these two drew more stares than all others combined)
-1970 Challenger
-1970 Barracuda
-Viper
-1993 Vision/Intrepid/Concorde
-1992 Ram pickups
-2008 LX platform Challenger

If I now had to rank that list in order of how many stares they drew,
the 300C would do no better than middle of the pack. If that high.

 

Whether a tiny car like the Fiat 500 will suit the US is one thing, but to
suggest it is a direct successor of the old little cars is rather silly.

I am told that Alfas no longer come pre-rusted off the assembly line, but
they still don't seem to sell well in the UK, even though they look great.
Too risky for other reasons, I expect...

DAS

To send an e-mail directly replace "spam" with "schmetterling"
---
[...]

[...]

 

There is a "bit of" a difference between the typical Italian and USA
driver body size. The Fiat 500 will fit only a few.

 

not to mention the size of the streets (Europeans streets much smaller) and
the amount of distance covered by a American during his/her typical day.

 

Have you sat in and driven the Fiat 500 or are you making assumptions
about it? I've never even seen one.

 

I was addressing "Even when it was available in the '50's and early '60's,
it was a piece of crap..." not the relative sizes of lither Italians and
large Americans.

DAS

To send an e-mail directly replace "spam" with "schmetterling"
---

 

Titchy car gallery:

http://www.fiat.com/cgi-bin/pbrand....fefcefecejgdfkhdfjj.0&categoryOID=-1073761346

DAS

To send an e-mail directly replace "spam" with "schmetterling"

 

There isn't a whole lot of real info I could find, like shoulder room,
hip room, leg room so I couldn't get a good feel for how it might
"feel". But from what info there is I would agree with the CEO's
statement that "if done right" it could be a hit here in the US, esp
with younger people who are not as tied into the "large" car model.
Even at that, I've found quite a few older people who used to drive
large cars who have switched to sub-compacts and who love them,
including my Dad who always used to drive Cadillacs and the like. Now
he's got a Matrix/Vibe and he loves it. What seems to be the key for
many people, aside from looks, is entry/exit ease, comfortable seats,
reasonable acceleration, and good gas mileage. Particularly when just
about every car now comes with the "luxuries" standard, like electric
windows/locks and AC. Since lots of new car buyers trade every 2 to 4
years, if they put a bumper to bumper warranty of 3 years on these
things it would go a long way to eliminate peoples concerns over
whether they are going to have problems with them.

 

Yeah, because Mercedes and BMW shoppers stop by the Chrysler showroom
and look at front-wheel drive cars first.

Are you forgetting Chrysler under Lido had an arrangement to
distribute Alfa-Romeos in select Chrysler dealerships? That was the
time he bought Lamborghini and a part of Maserati.

 

I've had a few Fiat's in that size category in the UK.
They stood out in that I had to bend my knee around the steering wheel
to hit the brake. It wasn't safe for me to drive them.
One was a Fiat Uno 1L , it's gave poor mileage for it's size and only
made more noise when more power was asked of it.

 

I'm a FWD buyer, but even if the 300(C) was FWD I'd not be interested.
I had a Magnum (300 SW) for a two week rental, that was enough.

One of the best Chrysler cars in the last 50 years is the 300M. A few
in the service dept at my Chrysler dealer said it first, I agreed.

 

You GOTTA be kidding! The 300M is one of the best in the past 10 years
for sure. Maybe the past 20, although I'd rank all of the
first-generation LH cars qual to the 300M mechanically, and the 2nd gen
Intrepid and Concorde above it in looks (it looks bob-tailed- ruins the
long flowing lines the LH series wears so well.) But 50? No way. There
are many other models that beat it when you get back to the 60s, let
alone the 50s.

Don't get me wrong- I don't like the look of the LX 300. I prefer the
Magnum and Charger and especially the Challenger. But mechanically
they're all head and shoulders above the 300M. The LX platform is one of
the best-handling, most rigid, and most stable on the road in its price
range... from ANY manufacturer.