By on June 11, 2009

BusinessWeek has an interesting piece on Marchionne’s speed dating interview technique. “Chrysler executives say that Marchionne has taken what for them seemed an unorthodox approach to sorting out the talent pool he inherited. He did fast, 15- or 20-minute interviews with more than 100 executives, often asking what they thought of their superiors, what their strengths and weaknesses were, as well as what they thought of certain peers. ‘The questions were very blunt,’ said one staff executive. ‘It was a drill the likes of which I had never been through before.’” No signs of analysis paralysis here.
Ex-Toyota man Jim Press is not only in, but has been named Deputy CEO, a very unusual title in American business. On the other hand, “Frank Klegon, the company’s product development chief, and top marketing executive Steve Landry both left the company.” Considering Chrysler’s most recent products and marketing campaigns, neither guy will be missed. The big problem, of course, is that it will take at least two more model years before Chrysler has anything new to sell. A tough hand being played aggressively. Great theater.
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40 Comments on “Marchionne Moving Fast to Shuffle Chrysler’s Management...”


  • avatar
    kericf

    So can we the taxpayers hire him to do the GM management interviews? This sounds like exactly what both companies need.

    I would kill to have recordings of all the backstabbing and hilarious stories that will be divulged in these meetings.

  • avatar
    trlstanc

    Senior executives who have never been asked blunt questions before? I wonder who this company got in to so much trouble?

  • avatar
    Airhen

    I had this kind of fun happen with a new department SVP at a previous company. Who had time to back-stab as we were just trying to justify ourselves?!

    Which his next step was to make us all apply for our own jobs (with the rest of the city) as he wanted his own handpicked employees. I instead found a job with another SVP, until the company was sold and we were all let go. (ha ha!)

  • avatar

    Alternate blog title and picture:

    Marchionne is John C. McGinley?

  • avatar
    menno

    Italians in control at Chrysler (Lee Iacocca’s revenge?)

    Chicago politics in control in Washington (Real Americans lament)

    Sorry, I simply couldn’t resist.

    Tell you what, Chrysler.

    I’ll consider a new Chrysler, Dodge or Jeep when:

    All the money has been paid back (do I need to clarify?)

    The UAW controls no part of your company and owns no more than a portion proportionate to other mutual companies workforce levels of ownership

    The bondholders, who were legally first leinholders, are all made whole – with interest at an equitable level

    Consumer Reports places your vehicles in the top 80th percentile and recommends at least 80% of them for 3 years in a row

    I read in auto news that you are treating your suppliers well and equitably

    And you retain the same percentage of US built vehicles as you had prior to going Ch 11.

    I’m 52 next month, and won’t probably be buying any cars after age 92, so that gives you 40 years.

    Think you can pull it off?

    Sadly, I don’t.

  • avatar
    menno

    Ditto for GM.

  • avatar
    AG

    Dear Menno:

    Your business will not be missed.

    -Signed,
    Sergio.

  • avatar
    gslippy

    I like it. Too bad this can’t happen at Government Motors.

    menno: Looks like you won’t be a Chrysler or GM buyer for a while.

  • avatar
    M5Fan

    This shows that Fiat is taking this deal very seriously. Which is great. Considering that the deal is big enough to pull Fiat under if it goes bad, I should also not be too surprising.

    Corporate politics in the US tend to be pretty underhanded, so this bluntness seems like a very good way to get to the bottom of things. I mean, it seems like the way the police might separate suspects to after an arrest to get to the truth. Which doesn’t seem too odd: “you ran your company into the ground, so you don’t deserve the benefit of the doubt. Now explain yourself”

    I do believe that between Fiat/Chrysler and Saturn/Penske there will be significant pressure to harmonize cross-Atlantic regulation in such a way that will allow new model designs to come across in less than 18 month’s worth of time. Of course, that is just wishful thinking, and it will probably take these companies 18 months just to get rid of their bloated inventories…

  • avatar
    superbadd75

    kericf: +1

    The fact that the executive offices are getting a major enema at Chrysler, while GM’s is largely being left intact, makes me feel that maybe Chrysler will weather this shitstorm better than GM. Clearly management failed at both companies, it makes exactly zero sense why there shouldn’t be a total rebuilding of the top levels at both companies.

  • avatar
    John Horner

    “Chicago politics in control in Washington (Real Americans lament)”

    Yeah, because Texas politics, especially Karl Rove’s style, are so clean and honest. What is with the bit of claiming anyone who disagrees with you isn’t a Real American?

  • avatar
    windswords

    “The big problem, of course, is that it will take at least two more model years before Chrysler has anything new to sell.”

    Except for the new Grand Cherokee, 300, and Charger they got coming out. Oh and the new V6 to power them. But who’s counting? FIAT 500′s for everybody!

  • avatar
    menno

    Dear “Sergio”,

    My business might not be missed, but the fact that millions of Americans actually feel pretty much the same way that I do, is going to put a major crimp on your style.

    Cio.

  • avatar
    menno

    Well, John Horner, I have to say that if you’ve been around here for long you’ll note that I pretty well despise all of the politicians from both major parties.

    I’m an equal opportunity Constitutionalist who really does believe that the majority of the politicos in power haven’t got the interests of the public in mind.

    You might disagree, but it appears that with a recent 6 to 9% approval rating by constituents, the US Congress isn’t doing so well. This figure ties in with people I speak to every day.

    Now, we Real Americans just need to figure out how to wake up the vast majority of Americans to get them to realize that –

    hey, if you only give these guys a 6 to 9% approval rating, then why do you go out and vote them back in again?

    Major disconnect.

    Unless, of course, – gasp – all of the elections are totally rigged?

  • avatar
    mopartscrub

    bella

  • avatar
    windswords

    Interesting quotes from the linked article:

    “Chrysler’s share of the U.S. auto market was 12.1% through the first five months of the year. But in May, its first month in Chapter 11, that slid to 10.6%. Some industry analysts believe the company will bounce back to near 12% as news of its fast exit from Chapter 11 sinks in.”

    ‘Indeed, the [PTFOA] task force believes that Chrysler is closer to achieving competitive costs than GM, though its challenges in the market and problems with its product lineup are certainly greater. Despite what many consider a weak product line that earns no recommendations from Consumer Reports, outgoing Chairman and CEO Robert Nardelli instilled a lean-thinking culture at Chrysler. Before its Chapter 11 filing, Chrysler needed to borrow just $4 billion, compared with $19.4 billion for GM. “And GM is not four times larger than Chrysler,” says one senior Obama Administration official. “It’s closer to breaking even.” ‘

    What was that I kept saying over the past year? Chrysler is smaller, easier, and less costly to turn around. So much for the triage theory.

  • avatar
    jpcavanaugh

    superbadd75

    +1

    I have been re-reading Going for Broke, the book written in 1981 about the first Chrysler bailout. That company would not have made it without lots of fresh blood to flush out a screwed up organizational chart and a poisonous corporate culture. The lesson is still there for GM if only it is capable of absorbing it. So far, I am not optomistic.

  • avatar
    moedaman

    M5Fan :
    June 11th, 2009 at 2:39 pm
    I do believe that between Fiat/Chrysler and Saturn/Penske there will be significant pressure to harmonize cross-Atlantic regulation in such a way that will allow new model designs to come across in less than 18 month’s worth of time. Of course, that is just wishful thinking, and it will probably take these companies 18 months just to get rid of their bloated inventories…

    I just don’t understand why GM and Ford never built all of their vehicles to meet all of the world’s standards? Why not engineer all of your cars to meet the toughest safety and pollution standards. Then you could build and sell the same cars (with some tweeks for market preferences) all over the world. Wouldn’t that be cheaper than engineering a different car for each market?

    For Fiat’s sake, hopefully someone will be smarter in this way.

  • avatar
    Gardiner Westbound

    Fiat has a a whole $1 riding on it. Marchionne has to be careful who he hires.

  • avatar
    John Horner

    “I just don’t understand why GM and Ford never built all of their vehicles to meet all of the world’s standards?”

    If you believe the One Ford line Mulally has been pushing since he arrived there, it sounds like Ford is finally doing so. Then again, the big “Ford 2000″ reorg was supposed to bring world engineering of world cars. Not to mention the original Escort, which was also supposed to be a world car.

    There are a few segments where it might not make sense. US style pickup trucks, for example, don’t seem to sell well in Europe, so no need to engineer them for that market.

  • avatar
    grog

    AG:

    +1

    You owe me a new keyboard from the spit take.

    John Horner:

    No spit take but another +1.

    Now getting back to the issue at hand and away from the meta issues of the commentariat:

    To quote various Star Wars characters:

    “I have a bad feeling about this.”

    I just don’t see how Fiat’s gonna effectively change things at Chrysler. They’ve got a black hole of a ditch to drive out of that Daimler then the Mythological Beast Company drove the company into. Ain’t no Jeep made that’ll do that.

  • avatar
    jmo

    “Wouldn’t that be cheaper than engineering a different car for each market?”

    Ford tried that with the Contour – remeber the “world car”? It was a disaster. Why do you think the Accord in Europe is different from the Accord in the US? The middle class European consumer wouldn’t be interested in a car the size of a US market Accord – neither would the JDM.

  • avatar
    Pch101

    Why not engineer all of your cars to meet the toughest safety and pollution standards.

    The safety standards aren’t “tougher”, just different. They’re different enough that there is no way to make a single design that complies out of the box with both US and European standards.

    The US standards were made different intentionally, in order to make it costly for non-Detroit companies to compete, by raising the expense of design. These changes were also sought by Daimler (pre-Chrysler), as they didn’t like the idea of used Euro-market Mercedes competing with them as gray-market imports.

    The irony is that these rules probably helped the Japanese, because it forced them to sell in high volumes in the US in order to justify the added expense of selling here. At the same time, they had less competition, because the Europeans couldn’t compete at the lower price levels. Unintended consequences can be funny sometimes.

  • avatar
    ktm

    The executive’s statement reminds me of the scene from A Princess Bride:

    Prince Humperdink: “That may be the first time in my life that a man has insulted me.”

  • avatar
    jmo

    Prince Humperdink: “That may be the first time in my life that a man has insulted me.”

    HAHAHAHAH!! LOL!

  • avatar

    Klegon’s not entirely responsible for Chrysler’s bad product decisions. Most of the disasters that were released after he became VP for Product (Compass, Sebring, Caliber, Nitro, etc.) were greenlighted and in the pipeline before he took the job. Before having the responsibility for product, Klegon was in charge of body on frame trucks, and the Ram line has held its own in the highly competitive pickup market. Frank’s a good guy who got a good job at the wrong time. I blame Trevor Creed for bad Chrysler product more than I blame Frank Klegon.

    Disclaimer: Frank is an old friend of my brother’s. He came into Chrysler via AMC and is a genuine car guy, with a restored triple white 1973 Mustang (the last pre-Pinto platform Mustang) convertible that he’s had since new.

  • avatar
    findude

    Why not engineer all of your cars to meet the toughest safety and pollution standards.

    This is a policy issue, not an engineering challenge. If there were only one standard (for lighting, for bumpers, for . . . ), then any manufacturer could offer any vehicle in any market. At that point consumer demand and profit margins will decide which vehicles get sold where.

    There is no way that differing standards lowers the consumers’ cost

  • avatar
    windswords

    “I blame Trevor Creed for bad Chrysler product more than I blame Frank Klegon.”

    I will second that. The fact that Trevor is long gone has vastly improved Chrysler’s chance for success.

  • avatar
    Spike_in_Irvine

    I do believe that between Fiat/Chrysler and Saturn/Penske there will be significant pressure to harmonize cross-Atlantic regulation in such a way that will allow new model designs to come across in less than 18 month’s worth of time.

    Does this suggest that the U.S. might finally come into the 21st century and adopt the metric system?

    On another topic, all of the foreign car manufacturers including those based in England, Japan, Australia, India where people drive on the left always build cars that can have the wheel on either side. Only America persists in building cars that are limited to one side of the road. I heard once that it is because the U.S. manufacturers own foreign subsidiaries to make such cars but this is weak!

  • avatar
    RetardedSparks

    “I just don’t understand why GM and Ford never built all of their vehicles to meet all of the world’s standards? ”

    Because in bean-counter-land there is a buck to be made by building everything as cheaply as you possibly can at any given moment. What you are proposing would have required big-picture thinking, not quarterly-report thinking.

    I think it’s great that the Italians are kicking a$$ and taking names withing 24 hours! The guys at Daimler are probably STILL having committee meetings about which side of the desk the trash cans should go under in Auburn Hills…

  • avatar
    CommanderFish

    moedaman

    As other people have mentioned, they’re not harder in one country or another, they’re just different. Also, people in Europe and Japan are much more willing to pay more for smaller cars.

    The Ford Focus came out worldwide in 2000, and it was a global car. Then, the rest of the world got the new model 2004, and North America finally got a refresh of the original one in what, 2008?

    Ford knew that if they were to bring over the new “Euro” Focus, we here in North America wouldn’t be willing to pay enough for it to make it profitable.

  • avatar
    psarhjinian

    Obligatory Office Space reference:

    “What would You Say You Do Here?”

  • avatar
    RetardedSparks

    “Ford knew that if they were to bring over the new “Euro” Focus, we here in North America wouldn’t be willing to pay enough for it to make it profitable.”

    But that’s a different problem, with importing, not designing. Building in Euros and selling in Dollars doesn’t work at current (or most recent) rates. If they had one platform and could build it here, the economics would be different.

    There are very few examples (of American companies at least) selling the EXACT same car in the US as Europe. The Contour was NOT the Mondeo, and the Saturn Aura was a cheaper and softer Opel. There will always be issues of consumer taste that varies by market, although I for one wish there was a box to check to get exactly the Euro model if we wanted it.

  • avatar

    Initially the Contour and the Mondeo were very similar. The AURA, on the other hand, shared no visible parts with any Opel.

  • avatar
    windswords

    Spike_in_Irvine:

    “On another topic, all of the foreign car manufacturers including those based in England, Japan, Australia, India where people drive on the left always build cars that can have the wheel on either side. Only America persists in building cars that are limited to one side of the road. I heard once that it is because the U.S. manufacturers own foreign subsidiaries to make such cars but this is weak!”

    There are a number of US vehicles built for export that had right hand drive. The Dodge Neon and Jeep Cherokee and/or Grand Cherokee come to mind. I also believe the small Saturns at least in their early years were built for right hand drive markets. There are probably others that I don’t know about. Problem is the trade barriers. You could build the right hand drive vehicle but if tariffs/taxes made it significantly more expensive than what was in the home market, it wouldn’t sell. Foreign makers selling in America do not have that problem, just the occasional bad currency fluctuation. So the Japanese especially build most (but not all) of their cars locally. If the plants become uneconomical here they will close them up because they have them still in their own country. That’s why I don’t get a warm fuzzy feeling about Japanese transplants. Except for the Tundra plant they can make everything in Japan (or Mexico) and ship it here.

  • avatar
    mel23

    if you only give these guys a 6 to 9% approval rating, then why do you go out and vote them back in again?

    Major disconnect.

    Unless, of course, – gasp – all of the elections are totally rigged?

    Yes, rigged elections is a possibility, but “they” must be rigging the exit polls as well. Not likely.

    What is likely is that the ignorant and lazy electorate don’t even know who the hell’s running, what they’ve done in the past or what they claim they will and won’t do in the future. Politicians die or retire and their wife or kid takes over. The name on the ballot stays the same; do the voters even know anything has happened? It’s easier to bitch and blame someone else for your mistakes/laziness. Sound familiar?

  • avatar
    John Horner

    This isn’t the place to argue congressional election politics, but the problem comes down to the fact that people say one thing, then do another. Also, people routinely tell pollsters that they hate Congress, but like their particular congressperson just fine.

    ” Ronnie Schreiber : Klegon’s not entirely responsible for Chrysler’s bad product decisions.”

    Thank you for setting me straight. I took a cheap shot without studying the back story carefully enough. My apologies.

  • avatar
    stevelovescars

    I would buy the argument about Ford’s inability to sell the European Focus in the U.S. at a price people are willing to pay if Mazda didn’t already do it with the Mazda3.

    Granted, a Mazda3 is slightly more money than a Focus but by all accounts it seems to be a car that receives excellent reviews and represents a huge portion of Mazda’s sales in the U.S. Lesson, people are willing to pay more for a better product.

    OTOH, I think all of Mazda’s U.S. sales don’t add up to the volume of just the Focus if rental fleets are included.

    However, couldn’t they sell the Euro Focus RS or the cool hatchback version here in smaller (but still profitable) volumes?

    Also, even if they made a smaller profit on the cars in the U.S. than they do selling 10 year old designs now (actually, they probably sell the Foci at a loss anyway), wouldn’t the increased economies of scale increase their overall profit by reducing cost on the units manufactured and sold in other parts of the world? Oh yeah, domestic and overseas market managers are probably measured on totally uncomparable scales with no regard for overall corporate profits. At least that’s how it was when I worked at GM years ago.

  • avatar
    jkumpire

    “Chicago politics in control in Washington (Real Americans lament)”

    Yeah, because Texas politics, especially Karl Rove’s style, are so clean and honest. What is with the bit of claiming anyone who disagrees with you isn’t a Real American?

    To equate what the current President is doing and the former President did is a level of insanity which is beyond belief. TTAC seems to be filled with people who seriously see Bush as Scum and Obama as the Messiah. It is truly discouraging to see.

    Maybe the moderators can just start removing posts that attack both or either President from the comments section. Then we can take about cars, or even bailouts, without the vile drivel that some posters have. And my .02, Bush/Rove were clean, Obama is not.

    Agree or disagree with the politics and legalities of the bailout stuff, the only thing that matters is: Will it work and make us a better country as a result of doing it? That is the question that needs answered, not some more smears of either Obama or Bush.

  • avatar
    quasimondo

    What? We need more smears. Less cars, more Drudge Report/Huffington Post.

    To be honest, I’m disappointed that more people aren’t applauding this management shakeup.


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