Fiat And Chrysler To Make It Official, Unified Management Coming "Soon"
When Fiat and the US government collaborated to bail out and restructure Chrysler, many hailed the news as nothing less than the rescue of the American auto industry. Though Fiat CEO Sergio Marchionne became CEO of the Auburn Hills-based automaker, he maintained much of its management corps on the strength of brief interviews, only relieving a few key members of the old guard. But the debate over whether the rapidly-aligning Fiat-Chrysler is more Fiat or Chrysler is going to be resolved “pretty quickly” according to Marchionne, as Bloomberg reports that a unified management structure is in the works.
Marchionne is working on management changes as he steps up the integration of the two companies. He plans to merge the carmakers to reduce costs and achieve a target of more than 100 billion euros ($140 billion) in combined revenue by 2014. The executive said in May that the timing of a merger hasn’t been decided yet, adding that a combination isn’t likely this year.
But just as there was furor in Italy when Marchionne suggested that the unified Fiat-Chrysler could be headquartered in Detroit, the unified management structure could be yet another source of controversy. It will, after all, be the most direct signal yet as to whether Fiat-Chrysler is an Italian firm with global operations, an Italian-American alliance or a truly global firm. For one thing, unified management should force Marchionne to commit to a single headquarters for the group, reviving a controversy he temporarily cooled by fatuously suggesting there be four Fiat-Chrysler “headquarters,” in Turin, Detroit, Brasil and “Asia.” Having masterfully finessed the PR messaging transition from “rescue of an American automaker” to “wholly owned subsidiary” thus far, a unified management could bring up a lot of unresolved issues. In short, it’s a branding challenge that makes the Chrysler-Lancia transformation look like child’s play…
More by Edward Niedermeyer
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Fiat cars had 35 billion Euros of revenue in 2010, Chrysler about 29 billion. So, unless they want to grow by ~60% in the next 3 years, I'd guess their "100 billion Euro" number does include Fiat industrial? But didn't the demerger essentially mean the end of a single "Fiat group"? I thought Fiat Industrial is now a completely seperate company from Fiat S.P.A., though they are owned by mostly the same shareholders and the CEO of one company is the chairman of the other...yet, just adding up the revenues and pretending to be "one" doesn't really seem right to me...
What's interesting about the chart is that Doug Betts the VP of Quality is the first one listed after Sergio and the chairman. This is not an accident. Usually it's the COO or CFO that is the first one listed after the CEO/Chairman. If you look at his history you will find that Betts worked at Buick back in the day when they were one of the few companies that had a reputation for quality and reliability. Then he worked for Toyota (back when they were good) and for Nissan. His position near the top of the chart is Sergio's way of making a point about improving quality for Chrysler. The improvements we've seen are not the end but the beginning.