Chrysler CEO Sergio Marchionne has handed crucial operating responsibility to four executives as he launches the company out of bankruptcy and into an uncertain future.
A whopping 23 managers will report to Marchionne, but the organization will revolve around the needs of the powerful new heads of the Chrysler, Dodge, Jeep and Mopar brands.
The three Chrysler guys and one Fiat veteran who run the units will be in charge of restoring the glory of their brands. Manufacturing and product engineering operations will support those brands.
The brand bosses will have the power to formulate product lineups, set volume targets, commission factory capacity, hire and fire advertising agencies and control marketing strategy.
That's how Marchionne's brand chiefs do it at Fiat, which now controls Chrysler.
"The focus of the brand organization is to rebuild and grow the company's four brands," the new CEO said in a statement after Fiat closed on its purchase of Chrysler LLC assets Tuesday, June 9.
Chrysler emerged from Chapter 11 after the U.S. Supreme Court lifted a temporary halt to the deal.
In revamping the organization, Marchionne is employing the same strategy he used to rebuild a shattered Fiat when he took over in June 2004.
But there's a twist. In Marchionne's matrix structure, each of the four brand chiefs also has global responsibility for other functions that affect all brands. So Dodge boss Michael Accavitti will be in charge of global marketing strategy for all brands, and Chrysler brand CEO boss Peter Fong will run global sales strategy for all brands.
Jeep CEO Michael Manley will run product planning companywide, and Mopar boss Pietro Gorlier will oversee customer satisfaction.
That's Marchionne's way of maintaining maximum differentiation between brands but using the company's common resources wherever possible.
With profit and loss responsibility for Jeep as a business, Manley will be in charge of making Jeep stand out as a brand. He will only put vehicles in his lineup that he expects to be profitable. But in his companywide product planning role, Manley will have an incentive to make sure the other brands get the products they need.
This isn't the first time auto companies tried a matrix style organization, said Paul Reagan, a specialist in organization theory at the Wayne State University School of Business in Detroit. Ford tried it with Jacques Nasser's global Ford 2000 plan. Chrysler executives also had cross-functional responsibilities in the 1990s.