Fiat, Chrysler-Lancia get new brand bosses as Marchionne creates new management team
MILAN -- Fiat-Chrysler CEO Sergio Marchionne announced a single management team for the two companies dominated by Fiat-bred executives, taking another step toward a merger of the carmakers.
The Fiat passenger-car and Chrysler-Lancia brands will get new CEOs, while four regional chiefs will be in charge of Fiat and Chrysler operations in North America, South America, Europe and Asia effective Sept. 1.
Marchionne will keep the role of overseeing Fiat and Chrysler in North America for himself.
Gianni Coda, head of purchasing at Fiat, was appointed to run operations in Europe, Africa and the Middle East. Cledorvino Belini, head of Fiat in Brazil, will oversee South America, Fiat's most profitable market, and Michael Manley will be in charge of boosting sales and profit in Asia. Manley will continue to run the Jeep brand.
"We have now reached the right moment to step on the accelerator of the Fiat-Chrysler integration," Marchionne said in a statement.
The regional chiefs will be part of a "group executive council" of 22 managers including the CEO, Fiat said on Thursday. The council is the highest decision-making body at Fiat outside of the board of directors.
Fourteen executives will come from the Fiat side, including three currently in positions with Chrysler. Five of the named executives were with Chrysler before Fiat rescued the U.S. automaker through a 2009 bankruptcy.
Chrysler-Lancia, Fiat brands get new CEOs
Olivier Francois moves to head Fiat brand from his post as CEO of Chrysler-Lancia. New head of Chrysler-Lancia will be Saad Chehab, currently head of group advertising for Chrysler.
Chehab was hired from Ford Motor Co. by Marchionne in July 2009, just a month after Chrysler emerged from bankruptcy.
Francois gets a double promotion. He will become CEO of the Fiat passenger car brand which, with annual sales of about 1.5 million units, is by far the biggest unit in Fiat-Chrysler that likely will have combined global sales of about 4 million this year.
The Frenchman also consolidates his previous role of head of marketing communications on both sides of Atlantic, becoming the chief creative officer of the combined organization. In his new role, he will continue as the global head of all advertising operations.
Marchionne, 59, aims to merge the carmakers to reduce costs and achieve a target of more than 100 billion euros ($140 billion) in revenue by 2014. The executive said in May that the timing of a merger hasn't been decided, adding that it's not likely this year.
'U.S. center of gravity'
"Marchionne's decision to keep the role of overseeing the business in North America shows that the center of gravity of the combined entity will be in the U.S.," said Gianluca Spina, chairman of the business school at Polytechnic University of Milan. "The integration process is going extremely fast, as is Marchionne's style."
The elevation of Chrysler executives to the executive council illustrates the growing role the U.S. operations play in Fiat's future, said Joe Phillippi, principal of consulting firm AutoTrends Inc. in New Jersey.
"Chrysler is very, very important and they recognize that there's a lot Chrysler has, despite the troubles of the past two years," Phillippi told Bloomberg.
Fiat and Chrysler is now a "fully consolidated group," Exane BNP Paribas analyst Thierry Huon said in a July 27 research note.
"We acknowledge that management has done a very good job of putting Chrysler back on track, but we believe that the profitability of this venture in the short term is still too dependent on Brazilian and U.S. car demand."
Among the 22 executive committee members are some who worked with Marchionne when he started considering the Chrysler acquisition in 2008.
They include Stefan Ketter, as head of manufacturing technology; Harald Wester, who has been head of Fiat engineering; Alessandro Baldi, head of Fiat's treasury, who has been on Marchionne's staff for more than 20 years, and Alfredo Altavilla, who is also a Chrysler director.
Marchionne also put executives on the panel who helped him turn around Chrysler, including Richard Palmer, who becomes chief financial offer of the group.
"We have gone through a pretty long dating period here, over two years to get know the organizations and we've established all the right relationships between the two organizations to now implement an integration plan," Marchionne said July 26 in a conference call with analysts.
Fiat increased its Chrysler stake to 53.5 percent July 21. The Italian carmaker expects to hold 58.5 percent of the third-biggest U.S. automaker by the end of 2011, after getting 5 percent in return for developing a fuel-efficient car for Chrysler.
The United Auto Workers union's retiree health-care trust, a voluntary employee beneficiary association or VEBA, will have the remaining 41.5 percent.
Fiat revised its full-year earnings targets this week after consolidating Chrysler from June 1. Fiat forecasts 2011 earnings before interest, tax and one-time items, which it calls trading profit, of about 2.1 billion euros ($3 billion) and revenue of more than 58 billion euros.
Source: Bloomberg; Luca Ciferri contributed to this story
FIAT PRESS RELEASE
Fiat Announces Key Appointments
Fiat S.p.A. is pleased to announce significant organizational changes effective September 1, 2011. As a result of the acquisition of majority ownership of Chrysler Group and consistent with the objective of enhancing the operational integration of Fiat S.p.A. and Chrysler Group, Fiat S.p.A. is today announcing the formation of a Group Executive Council, similar to the one that managed Fiat S.p.A. until the demerger of the Fiat Industrial activities.
The Group Executive Council (GEC) is the highest executive decision making body within Fiat outside of its Board of Directors1. It is responsible for reviewing the operating performance of the businesses, setting performance targets, making key strategic decisions and investments for the Group and sharing best practices, including the development and deployment of key human resources.
The GEC will have 4 main groupings.
The first is composed of 4 Regional Operations Groups for car manufacturing and sales, plus Parts and Service (MOPAR), Automotive Components (mainly Magneti Marelli) and Systems and Castings (Teksid and Comau). Each will be the responsibility of a Chief Operating Officer (COO) who will drive the organization via a regional Management Team (subject of a separate announcement prior to September 1, 2011). The COO's are accountable for Profit and Loss of their region/business, the management of regional resources, including manufacturing and commercial activities.
The COO's appointed to the GEC are as follows:
NAFTA (including Chrysler): Sergio Marchionne
Europe, Africa and Middle East: Gianni Coda
Latin America: Cledorvino Belini
Asia: Michael Manley
Parts and Service (MOPAR): Pietro Gorlier
Components (Magneti Marelli): Eugenio Razelli
Teksid/Comau: Riccardo Tarantini
The second grouping is reflective of the Group's focus and emphasis on its brands. Each of the global or potentially global brands is represented in the GEC, and their responsibility will be to improve and develop an appropriate brand portfolio and to assist in the development of adequate commercial and marketing strategies in each of the Group's operating regions.
The Brand Heads appointed to the GEC are as follows:
Fiat: Olivier Francois
Commercial Vehicles: Lorenzo Sistino
Alfa/Abarth/Maserati: Harald Wester
Lancia/Chrysler: Saad Chehab
Jeep: Michael Manley
Dodge: Reid Bigland
They will be supported by a Chief Creative Officer, Olivier Francois.
The third group is composed of industrial process leaders, who will drive consistency and rigor across the operating regions, and optimize the capital allocation choices the Group will face in the years to come.
Chief Technology Officer: Harald Wester
Design: Lorenzo Ramaciotti
Manufacturing Technology and Coordination: Stefan Ketter
Group Purchasing: Vilmar Fistarol
Quality: Doug Betts
Powertrain Coordinator: Bob Lee
Product Portfolio Management: Mark Chernoby
The final group is composed of support / corporate functions.
Business Development: Alfredo Altavilla
Fiat Services & Holdings: Alessandro Baldi
Chief Financial Officer: Richard Palmer
Chief Human Resource Officer: Linda Knoll
The GEC will utilize Alessandro Baldi as the Executive Coordinator.
"We have now reached the right moment to step on the accelerator of the Fiat-Chrysler integration" said Sergio Marchionne, Chief Executive of Fiat and Chrysler. "These appointments are the result of an extensive process of evaluation of the technical and leadership skills of the individuals who have been appointed to the GEC. But equally important is the fact that they reflect the multi-cultural geographically diverse nature of our businesses. We recognize in these leaders the future of Fiat-Chrysler as an efficient, multi-national competitor in a global automotive marketplace. It is a privilege for me to have the opportunity to lead this group of people and see them grow, to watch them as they transform challenge into success and into faith in themselves and what they can achieve."
Turin, 28 July 2011Contact Automotive News