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Chrysler's Chapter 11 Raises Management Questions For Future


Chrysler finally files Chapter 11. CEO Bob Nardelli is leaving. Vice chairman James Press is likely gone. Vice chairman and former Chrysler CEO Tom Lasorda is retiring.

Fiat, which will soon own 20% of Chrysler, will choose three board members of the automaker as it goes through Chapter 11 reorganization, while the government will choose six others. Fiat, too, will select a chairman and CEO of the company, which may turn out to be Fiat CEO Sergio Marchionne.

But if Marchionne is as smart a manager as he appears, he will not take the CEO position at Chrysler. He will find someone in the U.S. to run the company and report to him. Current vice chairman James Press would seem an obvious candidate given his record at Toyota before coming to Chrysler. But don’t count on that.

There are lots of talented execs who got bounced or got retired from Nissan when they moved from California to Nashville a few years ago. Jed Connelly, now retired from Nissan, comes to mind. Hyundai Motor Sales “acting” CEO John Krafcik would also be a good get for Fiat. He has brought great stability to Hyundai after a run of management changes. But the Koreans haven’t seen fit to give him the job permanently.

Then there is the oft mentioned Wolfgang Bernhard, former COO of Chrysler and the guy who ordered the 45% cost cuts in Chrysler’s interiors that helped get every model knocked off Consumer Reports’ recommended list. He certainly knows Chrysler inside and out. Maybe he can do better now without the Germans barking over his shoulder. He is consulting with auto companies and suppliers now, and could be gotten if he wants to move back to the U.S. Not sure, though, that two such strong personalities as Bernhard and Marchionne would get along in that set-up.

And there are few solid execs at General Motors who might want a change of scenery, even if it is only a 30 minute drive from GM headquarters—John Smith, head of global planning at GM, would be a good fit. Over at Ford…is Ford Americas President Mark Fields feeling under-appreciated? Fields is CEO timber. Ford CFO Lewis Booth is also well respected, and perhaps not as likely as others to succeed Ford CEO Alan Mulally.

Marchionne may consider himself another Carlos Ghosn, who has held simultaneous titles at both Renault and Nissan. But it is not a management model that need be repeated. With considerable work to be done at Fiat still, it seems a bad idea to divide his time between two operations. And when things get rough, as they will, he will have somebody to fire.


Steve Ballmer, Power Forward
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