Reborn Chrysler gets a European makeover
Vehicles, organization face changes
June 24, 2009
BY GREG GARDNER
FREE PRESS BUSINESS WRITER
Working from a modest office in a wing of Chrysler's Auburn Hills Technical Center -- rather than the 15-floor executive tower next door -- Chrysler Group LLC's new chief executive, Sergio Marchionne, is quickly bringing clarity and direction to the automaker that exited bankruptcy just two weeks ago.
According to interviews with employees and documents obtained by the Free Press, Marchionne, also the CEO of Italy's Fiat, has compressed eight layers of management into five.
He's shared a detailed vision to use Fiat models as the basis for future vehicles branded as Chrysler, Dodge and Jeep.
And he's positioning the upscale Alfa Romeo brand to come to North America to compete against established sellers of luxury European cars. Some of those Alfa models are to be built here, too, and possibly exported to Europe.
Aside from the tiny Fiat 500, which will be assembled in Toluca, Mexico, and introduced in mid-2011, new models with a European flavor will be branded as Alfa Romeos.
"The Fiat name doesn't play in the U.S. and Fiat knows it," said Jim Hall, managing director of 2953 Analytics, a veteran automotive analyst.
It's especially critical that Chrysler make fast product decisions now because the company's 41-day trip through bankruptcy delayed launches of key 2011 models.
Said Marchionne: "The new company will focus on speed without short-cutting."
Titles and pecking orders are simpler. There are senior or executive vice presidents, rather than vice presidents, followed by directors and senior managers. Every other salaried employee is simply considered a Level 5.
Among the key players are Scott Kunselman, senior vice president for engineering, and the four presidents and CEOs for each brand: Peter Fong for Chrysler, Michael Manley for Jeep, Michael Accavitti for Dodge and Pietro Gorlier for Mopar, Chrysler's replacement parts division. Each will be responsible for profitability and development of each vehicle sold under the brand.
It's a structure identical to Fiat's organization in Europe.
Alfa Romeo returns
Led by Sergio Craver in Turin, Italy, Alfa Romeo will be the brand under which Fiat returns to the U.S. market.
Aging baby boomers remember Alfa Romeo for the iconic roadster in which Dustin Hoffman cruised the Pacific Coast Highway in "The Graduate."
Between 1990 and 1995, Chrysler and Alfa launched a lackluster U.S. marketing partnership that never resulted in more than 7,000 or 8,000 sales a year. But Alfa Romeo is on a bit of a roll in Europe. Sales in Europe rose 11% for the first five months, while car sales overall fell nearly 13%.
"In Europe the Alfa does go up against those other luxury brands fairly successfully," said John Wolkonowicz, an auto analyst with IHS Global Insight. "Will it work in the U.S? It's not going to be a cakewalk."
Marchionne understands that turning around an automaker depends on boosting revenue as much or more than cutting costs.
Fiat's 500 minicar will be produced in Toluca, Mexico, and sold through Chrysler dealerships as a 500, much as BMW maintained its Mini as a separate brand.
The real profit margins will come in larger segments, however.
An Alfa version -- called the GTX -- of the 2011 Jeep Grand Cherokee and Dodge Durango will be produced at the Jefferson Avenue assembly plant. There is a strong likelihood Fiat will export some of those SUVs to Europe.
The midsize challenge
"The biggest 'if' in this whole plan is how to develop the midsize sedan," said Wolkonowicz. The need for a more competitive midsize car -- probably Chrysler's weakest segment -- has dogged the company for at least two years.
For the midsize car, Chrysler engineers looked hard at using the same structure for future generations of Jeep Liberty, Dodge Caliber and Alfa Romeo Milano, but decided it was too small, said people familiar with the process.
MORE AT Detroit Free Press