Chrysler Changes Brand Chiefs, Divides Dodge in Two

Oct. 5 (Bloomberg) -- Chrysler Group LLC Chief Executive Officer Sergio Marchionne, extending his imprint on the U.S. automaker, named new chiefs for two of the company’s four brands and split operations at Dodge into truck and car lines.

Marchionne, who also is CEO of Italy’s Fiat SpA, appointed Fiat’s Olivier Francois to run the Chrysler brand after Peter Fong resigned, according to a statement today. Two executives will lead Dodge after Mike Accavitti stepped down.

The moves widen the management shifts since Marchionne became CEO after Chrysler’s June 10 bankruptcy exit. Francois is at least the fourth executive to come from Fiat, which owns a 20 percent stake in Auburn Hills, Michigan-based Chrysler. Accavitti and Fong held their posts for less than four months.

“It does not instill confidence that they are so quickly replacing recently installed executives, and it is a little bit confusing,” said Aaron Bragman, an IHS Global Insight Inc. analyst in Troy, Michigan. “If they have a plan, they haven’t yet shared it with anybody.”

Chrysler’s U.S. sales tumbled 40 percent through September, extending losses that helped drag the automaker into a U.S.- backed bankruptcy restructuring on April 30. Marchionne, 57, has said he intends to unveil his new-product plans in about a month for integrating Fiat and Chrysler technology.


Fiat’s System 

The new executives have profit-and-loss responsibilities, the company said, matching the system at Turin, Italy-based Fiat. Brand leaders at Chrysler didn’t have those duties under previous owners Cerberus Capital Management LP and Daimler AG. Marchionne also brought in new managers after becoming CEO at Fiat in 2004.

Shawn Morgan, a Chrysler spokeswoman, declined to elaborate on the statement.
Fred Diaz Jr. will run the new Dodge Ram truck brand and be the lead sales executive for all the automaker’s vehicles, Chrysler said. Ralph Gilles will lead the Dodge car brand, while keeping his job as Chrysler’s design chief. Francois’s duties include the marketing of all Chrysler vehicles.

Accavitti had been the top marketing executive at Chrysler, as well as running the Dodge brand. Fong oversaw sales companywide as well as leading the Chrysler brand. Diaz previously was a district sales manager.

Michael Manley retains his job as Jeep brand chief, while also taking responsibility for distributing Chrysler vehicles through Fiat outlets outside the U.S. Joseph Veltri will run product planning, a job previously held by Manley.

Dividing Dodge 

Bragman said splitting Dodge in two pieces may make it easier for Chrysler to promote Ram separately from Dodge cars. That could help Chrysler introduce Fiat-developed work vehicles from Europe, while giving the automaker a way to break off the unit for sale should demand collapse, Bragman said.

“It looks like they are already creating an out for the truck brand, for Fiat basically, before they have even started,” he said.

Francois, who will remain the head of Fiat’s Lancia, will have responsibility for transforming Chrysler into an upscale brand, the company’s stated goal for his predecessor. Lancia is a premium brand sold chiefly in Italy, with an all-hatchback lineup of four models.

In addition to brand responsibility for Chrysler and Lancia models, Francois will direct marketing and model debuts for all of Fiat.

“Chrysler is going to need some imagination to get sorted out,” said John Buckland, an analyst with MF Global Securities in London, with challenges ranging “from the design to how to sell it and find something that appeals to customers.”

- Via Bloomberg