Chrysler reinvents itself

Chrysler is on the fast track to solvency, following the approval of major organisational changes for the US car manufacturer. In fact, 'major organisational changes' is an understatement. The business entity that operated as Chrysler LLC is no more, in effect. Assets and staff employed by Chrysler have been transferred (sold, actually) to a new corporate entity named Chrysler Group LLC. If the distinction between the two seems fine to the point of invisible, there's a lot more going on within the orgchart.

As per our earlier reports on the agreement between the two car companies (more here), Fiat, through a subsidiary, now owns 20 per cent of Chrysler Group, with an option to acquire a further 15 per cent incrementally. Fiat is expected to pick up the additional stake, provided certain milestones are achieved by Chrysler Group. For the present, Fiat cannot legally acquire a majority interest in Chrysler Group until taxpayer funds to keep Chrysler LLC afloat have been repaid.

The Italian manufacturer will provide platforms and drivetrain components for a range of small and mid-sized cars to be developed exclusively by Chrysler for its own brand, plus Jeep and Dodge. For its part, Fiat will sell Chrysler models through its distribution networks in Latin America and Russia.

With the sell-off of the former corporation, Chrysler LLC to Chrysler Group LLC, the new corporation is no longer subject to Chapter 11, but nor is it liable for debts accrued by the old corporation -- other than those funds provided by the US government to bail out the company.

Now that the deal has been agreed, Chrysler has announced that Fiat CEO Sergio Marchionne (left of picture) will also serve as CEO for the Chrysler Group and C. Robert Kidder (right of picture) will be the new Chairman of a board of nine directors. Three of those will be appointed by Fiat, four from the US government, one from the United Auto Workers (UAW) and one from the Canadian government.

"From the very beginning, we have been adamant that this alliance must be a constructive and important step towards solving the problems impacting our industry," says Marchionne as news broke that the agreement was official.

"We now look forward to establishing a new paradigm for how automotive companies can operate profitably going forward.

"The same attributes that first attracted us to this alliance -- a global automotive company with first-class technology, a devoted workforce, improved efficiency, a strong, global distribution network and an unyielding passion for building great cars that consumers want -- are even more true today.

"While it does not solve every issue faced by the automotive industry today, this alliance, established with the full support of President Obama's Administration, is a very significant step toward positioning Fiat and Chrysler to be leaders among the next breed of global automakers.

"This has, I know, been a difficult process for everyone involved, but we are ready to prove to the American consumer that Chrysler can once again be a strong, competitive company that produces a full portfolio of reliable vehicles that capture the imagination and inspire loyalty."

The Chrysler Group is 55 per cent owned by the United Auto Workers' Retiree Medical Benefits Trust with the remaining 10 per cent divided between the US Treasury (eight per cent) and the Canadian government (two per cent).
 
In a press release issued by Chrysler, the new structure is described as "leaner" and "flatter".

"With a flattened organisation designed to give leaders broad spans of control, we are able to increase the speed of decision-making and improve communication flow, ultimately bringing Chrysler Group management and employees closer to our customers," says Marchionne, who will be assisted by Jim Press, now functioning as Deputy CEO and Special Advisor. Press was Vice Chairman & President of Chrysler LLC.

Former Director of the Mid-Atlantic Business Centre, Peter Fong, is now President & CEO for the Chrysler Brand (as a division of Chrysler Group) with overall responsibility for sales.

Most recently the Executive Vice President for International Sales & Global Product Planning Operations, Michael Manley is now President & CEO of Jeep. Manley also heads product planning for all three brands (Chrysler, Dodge, Jeep).

From the position of Director, Dodge Brand Marketing, Michael Accavitti has moved into the role of President & CEO for the Dodge Brand. Accavitti will also assume responsibility for global marketing of the three brands.

Other staff movements include the Fiat appointment of Pietro Gorlier to the position of President & CEO of Mopar. The President/CEO incumbents for Chrysler in Mexico and Canada will stay where they are, but Steven Landry, Executive Vice President, North American Sales & Marketing, Global Service & Parts, will retire.

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