Fiat-Chrysler Details New Management Structure
By Bill Visnic July 29, 2011
Fiat S.p.A., managing owner of Chrysler Group LLC, announced yesterday details of a unified management organization for the newly-combined companies’ operations – and those fearing yet another foreign owner casting a long shadow over Chrysler likely are resting somewhat easier. In the new Group Executive Council (GEC) that will run all aspects of the merged company’s business, nine of the 22 executives come from Chrysler. Six of the council are Americans. At the top of the structure as CEO is Sergio Marchionne (above), who currently serves as chief executive for both Fiat and Chrysler and will remain the boss in what effectively is a merger, now that Fiat owns 53.5 percent of Chrysler.
Marchionne will also run the company’s North American operations as one of seven chief operating officers (COO) – four for the global regions into which operations now are partitioned, plus COOs for the Mopar aftermarket unit, components, plus systems and castings. Fiat said the GEC organization becomes effective Sept. 1. The GEC’s primary structure of four operating regions appears clearcut enough. Demonstrating the emphasis on high-level guidance for the North American region, Marchionne is its COO. For Europe, Africa and Middle East, the COO is Gianni Coda, currently Fiat’s head of purchasing. COO for Latin America is Cledorvino Bellini, currently chief of Brazil and Michael Manley, currently CEO of the Jeep unit, will be COO of the Asia region.
Four Regions, Six Brands
The COO structure becomes less straightforward when considering the remaining three COOs and their operating realms. There appears to be a designed-in potential for overlap with oversight from the seven “industrial process leaders” of the GEC. The COO of the Mopar afternmarket parts and service unit is Pietro Gorlier. Head of the components group is Eugenio Razelli, while COO of the “systems and castings” unit is Riccardo Tarantini. The industrial process leaders, said Fiat, “will drive consistency and rigor across the operating regions, and optimize the capital allocation choices the Group will face in the years to come.”
It’s unclear if these units are subservient to the regional COOs. The structural chart supplied by Fiat (below) indicates they’re on the same reporting level to Marchionne as the rest of the GEC units. The industrial process leadership divisions are: chief technical officer; design; manufacturing technology and coordination; group purchasing; quality; powertrain coordination and product portfolio. “Brands” in the new GEC structure include: Fiat (led by Olivier Francois); Lancia and Chrysler (headed by Saad Chehab); Alfa Romeo/Abarth/Maserati (headed by Harald Wester); Jeep (Michael Manley); Dodge (Reid Bigland) and commercial vehicles (Lorenzo Sisteno). The brands will be supported by Francois, acting as chief creative officer.
Does It Make Sense?
Aside from Marchionne’s spot at the top of the tower, the new GEC structure doesn’t make it readily apparent who’s the boss of whom – at least within the format of a traditional organization chart. Perhaps that is by design. Or it’s possible Marchionne – presumably the chief architect of the GEC organization – does not think in terms of standard reporting structures, or he believes a less-traditional format is in order. Whatever the case, there is sure to be extensive speculation about how this will all work. And although the Chrysler side of the business is well-represented on the GEC, there are some apparent voids and omissions that will draw questions. Chief among them being the lack of a place on the GEC for regarded designer Ralph Gilles.
Gilles has long been considered a fast-tracker at Chrysler and currently is senior vice president of product design and recently also was appointed president and CEO of Chrysler’s SRT in-house tuner unit and motorsport operations. Chrysler’s senior vice president for purchasing and supplier quality, Dan Knott, also seems to have lost out for the moment, with Marchionne naming Doug Betts, former Toyota quality guru who came to Chrysler via Nissan, as the quality leader for the newly formed GEC. Fred Diaz, CEO of the Ram brand, also is not a GEC member. A Chrysler spokesperson told AutoObserver one reason for Gilles and Diaz not having a place on the GEC can be attributed to the fact that their respective SRT and Ram units “are not global brands. They remain non-global departments whose heads report through North America to Sergio.”
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