With sales down sharply and pressure to start generating cash before government loans run out, Chrysler Chief Executive Officer Sergio Marchionne shook up his executive team Monday, replacing two of his brand managers after just four months and splitting Dodge into car and truck units.
The changes show Marchionne's penchant for moving quickly and demanding performance, industry analysts say. But it's also a sign that all is not well inside the company's sprawling headquarters complex in the Detroit suburb of Auburn Hills.
"Something went wrong here," said Gary Dilts, a former Chrysler sales executive who is now senior vice president of global automotive operations for J.D. Power and Associates. "He's going to mix and match this team until he gets the chemical balance where he wants it."
Speed is crucial for Marchionne, who also runs Italy's Fiat Group SpA. It will be at least 18 months before Chrysler can launch a new car lineup based on smart, fuel-efficient Fiat designs. Until then, the third-largest U.S. car maker must survive with its current shaky lineup.
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Marchionne, who led a stunning resurgence at Fiat, replaced Peter Fong, 45, as president and CEO of the Chrysler brand and Michael Accavitti, 50, as president and CEO of Dodge.
Fong also was the company's top sales executive, and both men appeared with Marchionne as the company's public faces just two weeks ago at the Frankfurt Auto Show in Germany.
But the moves come just four days after Chrysler reported a 42-percent drop in September sales, compared with the same month a year earlier. Through the first nine months of the year, Chrysler sales are off 39 percent, the largest drop of any major automaker.
Among Chrysler's problems is a weak lineup of midsize cars. Its current entries, the Sebring and Avenger, have sold poorly and have received low quality ratings from J.D. Power and Associates and Consumer Reports magazine, which found them inferior to the top-selling Toyota Camry and other competitors.
The Sebring-Avenger replacement will be based on a Fiat compact that will be stretched and widened to fit a midsize car.
Marchionne promises to introduce a new lineup chock with Fiat small and midsize cars in November, and separating out Dodge's car business will help rebuild its image.
The new offerings will also include trucks and larger cars from Chrysler that he hopes will be more appealing to Americans. The company's namesake brand will try to steal customers from Cadillac and other luxury brands.
Chrysler has been mostly mum about its new product plan. Even dealers have been kept in the dark.
Splitting the Dodge brand into truck and car operations mimics what Marchionne did with Fiat, where he successfully separated commercial vehicles from passenger cars, said Chrysler spokesman Gualberto Ranieri.