Wow, we're still reeling a bit from this morning's news that Chrysler hired off Toyota North America's top executive, Jim Press. He now shares the title of Vice Chairman and President with Tom LaSorda, and the two will report directly to Chrysler's new CEO, Bob Nardelli. While LaSorda will handle the "Supply" side of things (Manufacturing, Procurement and Supply, Employee Relations and Global Business Development and Alliances), Press will handle "Demand" (North American Sales, International Sales, Global Marketing, Product Strategy, and Service).
Press spent the last 37 years of his professional career at Toyota. What makes a man leave a company with that type of history? What makes a man leave a company like Toyota at the height of its success, and join an automaker that's about to begin yet another turnaround? We don't know, but we bet it's more than just the allure of a good challenge.
The real question is how the addition of Jim Press will affect Chrysler. Will his hire be an instant positive for the company, or will his presence be a distraction for the management team. Then there's the conspiracist theory angle. Perhaps Toyota CEO Katsuaki Watanabe sent Press to Chrysler as a mole to learn why the Jeep Wrangler is so popular.
Despite recently renewing his contract with Chrysler, it's looking more and more like Tom LaSorda's days at the automaker are numbered. This morning, Chrysler Chairman and CEO Bob Nardelli revealed that Jim Press would be joining the company as Vice Chairman and President, the same title LaSorda has on his recently-updated business cards. Until today, Press had been none other than President and COO of Toyota North America, quietly leading the Japanese automaker's charge in the U.S. for more market share.
Press will be in charge of North American Sales, International Sales, Global Marketing, Product Strategy, and Service and Parts ,while LaSorda is still responsible for manufacturing, purchasing, labor and Global Business Development and Alliances.
Chrysler's new Chairman and CEO Bob Nardelli introduced himself at a press conference this morning as his new No. 2 Tom LaSorda stood by his side (more like directly behind him). LaSorda, who until this past weekend was CEO himself, is staying on the team, though his own No. 2, COO Eric Ridenour, has decided to leave the company after 23 years of service.
Our man on the scene, Chris Shunk, reported there was a lot of talk about this being the "right team" and the "right time", though LaSorda, who helped devised and launch Chrysler's current turnaround plan, admitted that he told Cerberus management they should hire someone new if they thought that person could do a better job with the company than he could. Apparently they took him up on his offer.
That's why we find this picture so appropriate, with LaSorda acting as Chief Executive Wallflower to Nardelli's new Big Boss Man role. Of course, we know LaSorda's role will still be important, as both the UAW and CAW have been working with him during the ongoing contract talks that are crucial to the company's turnaround.
According to a German magazine referenced by Automotive News, Wolfgang Bernhard is expected to be announced as the Chrysler Group's chairman-in-waiting, pending DaimlerChrysler's sale of the automaker to Cerberus Capital Management. Currently Bernhard is an acting advisor, a consultant if you will, for Cerberus, and spends his days at Chrysler's Auburn Hills headquarters, presumably gathering info for Cerberus on what aspects of the business need the German exec's magic touch the most. When the sale happens and Bernhard officially moves in, the speculation is that current CEO Tom LaSorda will remain in his position and likely report to Bernhard.
Bernhard was formerly VW's brand chief, and before that he worked for Chrysler immediately following the "merger of equals" that resulted in DaimlerChrysler. Other former Chrysler execs are also advising Cerberus at the moment according to Automotive News, including the company's well respected former design chief Tom Gale. Hopefully the news of Bernhard's official return, when it comes, will portend the return of other key Chrysler execs that can aid the company's turnaround efforts.
Immediately following the sale of Chrysler to Cerberus, people began speculating on what role former Chrysler exec Wolfgang Bernhard would take up in the newly minted Chrysler Corp. Even we jumped on the bandwagon and suggested Bernhard, who had been hired on by Cerberus to advise the sale, would be a likely replacement for Tom LaSorda if the automaker's current CEO couldn't turn around the company's fortune. The Wall Street Journal is reporting, however, that Bernhard will act as a high-level advisor and report directly to Cerberus founder Stephen Feinberg.
The interesting thing is that Bernhard has been present at nearly every meeting since the acquisition was announced. He currently has an office on the executive floor of Chrysler's Auburn Hills headquarters and has been seen making the rounds, even stopping by the design studio to point out what he likes and dislikes in future designs.
Cerberus makes it clear, however, that Bernhard is not part of the Chrysler executive team, which begs the question, why is he there? It seems to us that Bernhard's considerable talent in having an eye for good product and dealing with the unions will be extremely valuable to LaSorda and his team while they attempt to bring Chrysler back to profitability. At the same time, Bernhard's role also comes off as a strategy by Cerberus to keep the Chrysler execs, specifically LaSorda, focused in their task. Should they fail, Bernhard won't have to move his desk far to take over the CEO role. Hopefully it doesn't come to that, and the two execs will form a relationship similar to the one used effectively by GM CEO Rick Wagoner and his product man, Bob Lutz.
There aren't that many people in the world who have a stronger emotional connection to Chrysler Corp. than Lee Iacocca, father of the minivan and savior for Chrysler during the early '80s. In an article featured in BusinessWeek, Iacocca reveals his feelings and thoughts about Daimler AG's sale of Chrysler to Cerberus Capital Managment, a private equity firm.
In no uncertain terms, Iacocca comes right out and says, "Daimler screwed Chrysler royally." He argues that Chrysler was healthy, even powerful, before the merger, and has been left half dead by Daimler, which retreats back across the Atlantic to Germany as we speak (our eloquent prose, not his). Nevertheless, Chrysler's ex-CEO is optimistic about his old employer's fate, and makes a case for Cerberus being exactly the right kind of private equity firm to buy Chrysler.
The newly minted Chrysler Corp. held its first press conference today and carryover CEO Tom LaSorda made it clear that all of Chrysler's brands will be kept together after the sale to Cerberus Capital Management goes through. Many have been wondering if Cerberus would pull an Edward Lewis à la Pretty Woman and break up the automaker, selling off its pieces for profit. LaSorda says that won't happen, and in addition his company and Daimler AG will continue to work together in areas such as hybrid technology and purchasing. One would also hope that work done to bring a small B-class car to Chrysler's product portfolio from Chinese automaker Chery is also intact.
LaSorda also said that the purchase will not be followed by more job cuts than were already planned. One job cut we speculate might be considered is LaSorda's own position as CEO of Chrysler Corp. We suspect he'll be given a year or two to improve Chrysler's standing, but ex-Chrysler wünderboy Wolfgang Bernhard is waiting unemployed in the wings. It's likely Bernhard couldn't be named CEO of Chrysler Corp. anyway until his noncompete clause with VW/Audi runs its course. Until that time, you can bet LaSorda will be working to prove his worth to the new suits in town from Cerberus.
You too can front like you're a member of the press when Chrysler CEO and President, Tom LaSorda addresses questions from the seething throngs during a press conference today at 1:30 PM EST. Naturally, the topic of conversation will be the sale of Chrysler to Cerberus Capital Management. We're not entirely sure that anything new will be discussed, as the topic has been beaten into the ground after only one day, but regardless we'll pay rapt attention to the Mr. L. And since it'll be after noon, we might try to come up with a drinking game to make it more interesting.
Follow this link to watch the press conference live.
With all the news surrounding the possible sale of Chrysler, it's nice to know that the forlorn automaker is still looking to the future and revamping aging production centers.
An announcement is expected later this week regarding a new axle plant that will supposedly be built somewhere northeast of downtown Detroit. The $700 million plant, designed to replace another axle plant in Motown, is expected to be in operation by 2010 and will employ some 900 workers.
Information about the factory comes via the Detroit News, who's union sources indicate that the work rules for the new plant are up for a vote today, while at the same time, the Michigan Economic Growth Authority is mulling over tax incentives for Chrysler. If all goes according to plan, expect an announcement this Wednesday, as Governor Granholm, UAW Pres Ron Gettelfinger and Chrysler's CEO, Tom LaSorda take to the podium.
There are plenty of reports today that morale at Chrysler is in a tailspin right now due to all of the rumors swirling about the potential sale of the company. Having been through several buyouts and mergers (both attempted and successful) in the past 15 years, I know that one of the worst things that can happen to productivity is rumors about the company's fate. Whenever this happens, people spend their days polishing resumes, calling headhunters and speculating about what's going to happen.
This morning Chrysler CEO Tom LaSorda sent out a mass e-mail to all employees trying to minimize this impact. He starts off by explaining that management cannot comment on anything that might happen, for legal reasons. He then goes on to tout the support given by the management board to the latest restructuring plan, all the new products in the pipeline and how this crisis is different from all the previous Chrysler meltdowns. It's understandable that LaSorda felt he needed to send this message, but the reality is that it will make no difference whatsoever. Anything short of a definite announcement that either a deal is done, or an unequivocal statement that Chrysler is not on the market, will likely only make things worse. The entire e-mail message can be read after the jump.
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