January 24, 2021

Fiat’s New Management Structure Will Bring Chrysler Into Fold

The reorganization assigns seven chief operating officers, four of whom will oversee Fiat and Chrysler in different geographic regions. Sergio Marchionne will remain the chief executive of both Fiat, which is based in Italy, and Chrysler, based in Auburn Hills, Mich., and have responsibility for their North American business.

Mr. Marchionne’s decision to put himself in charge of North America indicates the importance of the United States to the combined companies, even though Fiat currently sells only one model, the 500, in this market. Access to the United States, which Fiat abandoned in 1984, was a major factor in Fiat’s decision to become Chrysler’s partner in 2009 as Chrysler emerged from bankruptcy protection.

“We have now reached the right moment to step on the accelerator of the Fiat-Chrysler integration,” Mr. Marchionne said in a statement. The changes take effect Sept. 1.

The regional chiefs are part of a 22-member group executive council that will run the two automakers. Michael Manley, who will oversee Asia, is the only one of the four whose background is at Chrysler. Fiat’s head of purchasing, Gianni Coda, will be in charge of Europe, Africa and the Middle East. Cledorvino Bellini, the head of Fiat in Brazil, will be responsible for Latin America.

Another Chrysler executive, Richard Palmer, the chief financial officer, now will have that title for both companies.

In all, nine executives from Chrysler will sit on the council, which the statement described as the companies’ highest decision-making authority aside from the board.

Six members will be in charge of the various Fiat and Chrysler brands. Olivier Francois, who has been head of the Chrysler and Lancia brands, will become head of the Fiat brand and serve as the companies’ chief creative officer. Saad Chehab, one of the executives behind a two-minute Super Bowl ad that highlighted the turnarounds occurring at Chrysler and in Detroit, will run Chrysler and Lancia.

“Sergio likes to think big and do dramatic things,” said Jeremy Anwyl, the chief executive of Edmunds.com, which researches the auto industry. “Fiat by itself lacked the scale to be a competitive player, and to receive the full benefit and cost savings you’ve got to bring the full operations together.”

Mr. Marchionne said the changes “reflect the multicultural geographically diverse nature of our businesses” and would help to make the combined companies “an efficient, multinational competitor in a global automotive marketplace.”

They also cut by more than half the number of people reporting directly to Mr. Marchionne, a tireless micromanager who has traveled frequently between Italy and Michigan since taking over at Chrysler.

He has spent the last two years gradually bringing the two companies together.

Fiat began consolidating Chrysler’s finances into its own at the end of May and now owns 53.5 percent of Chrysler. It expects to gain an additional 5 percent stake by year’s end. The companies’ partnership agreement grants the increase after they begin producing a car based on Fiat technology that gets at least 40 miles per gallon.

Last week, Fiat paid $500 million to buy the United States Treasury’s 6 percent stake in Chrysler and $125 million for the 1.5 percent held by Canada. Fiat also paid $75 million to buy out the two countries’ rights to purchase additional Chrysler shares from a trust fund for the United Automobile Workers union. The trust fund is the only remaining shareholder in Chrysler other than Fiat.

Chrysler on Tuesday reported a $370 million second-quarter loss, but Mr. Marchionne said it would have earned a $181 million profit but for a charge related to paying back Chrysler’s $7.6 billion in government loans.

This article has been revised to reflect the following correction:

Correction: July 28, 2011

An earlier version of this article published online misstated the names of two Fiat officials. They are Gianni (not Gianna) Coda, the head of purchasing, and Cledorvino Bellini (not Belini), the head of Fiat in Brazil.

Article source: http://feeds.nytimes.com/click.phdo?i=bb0508dca99a7331e5f0f1f6808de7d2

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