Welcome back
Although the dust is still settling from the deal that puts Chrysler completely back under U.S. ownership, and the company's future remains uncertain, I think great things are in store for its commercial light- and medium-duty truck business. My confidence in that can be boiled down to two words: Jim Press.
Don't get me wrong. That nine-year or so stretch where Germany's Daimler AG owned Chrysler (though positioned as a merger, with the name change to DaimlerChrysler it was damn clear who wore the pants in that deal) effected much needed change and witnessed the introduction of some good products.
But it wasn't a good match — the philosophies of the two organizations were not compatible, and the bottom line took a hell of a beating. In 2006, even as DaimlerChrysler said its truck group logged a before-tax profit of 2.02-billion EUR and the Mercedes car unit 2.42-billion EUR, Chrysler lost 1.12-billion EUR, or about $1.56 billion in U.S. currency. You can't keep piling up those kinds of losses for long.
To stem the bleeding, Daimler sold Chrysler to Cerberus Capital Management — at a big loss. Daimler paid $38 billion for Chrysler in 1988, but sold Cerberus an 80.1% stake for only $7.4 billion. If that wasn't bad enough, Cerberus then brought in Robert Nardelli as CEO. The former top honcho at Home Depot, Nardelli has a reputation as the mother of all bean counters. Not the kind of guy you'd want running a car and truck manufacturer that desperately needs to hit the ground running.
And yet … Nardelli went out and hired Jim Press, former president and COO of Toyota Motors North America and the first non-Japanese executive ever tapped to join the board of directors of Toyota Motor Corp. In addition, he managed to convince Chrysler veteran Thomas LaSorda to stay on as vice chairman and president of manufacturing, procurement and supply, employee relations and global business development and alliances. Talk about savvy moves!
Press spent his 37 years at Toyota carving up the U.S. market and directing its highly successful light-truck strategy, specifically the recent Tundra pickup truck re-design that's helping the OEM gobble up yet more U.S. market share. And LaSorda was instrumental in establishing a huge amount of plant re-tooling and re-investment for Chrysler — the stuff that's going to make the products your fleets may use.
This is also helping to sharpen the product offerings from Ford and General Motors. No one is slacking off in trucks now; witness the new Chevrolet Silverado and GMC Sierra alongside the new F-Super Duties. Everybody is working at the top of their game to produce light trucks with all the right ingredients — power, durability, and as much fuel economy as possible.
Putting Press into the mix on the Chrysler side is going to do a lot to further re-energize the Dodge Ram product line, which has already undergone quite a makeover recently.
He's also going to focus on the dealer network. “Part of my new responsibilities will be strengthening and energizing the dealer body,” said Press. “This is something I was passionate about at Toyota and will be passionate about at Chrysler.”
That's critical because the dealer handles sales and service for a lot of light-truck flights out there; improving that side of the business should improve the quality of the service fleets receive.
So welcome back to the U.S., Chrysler. Good of you to keep shaking things up. Now it's time for the fleets out there to see what kind of game you've got, as well as how it will stand up to the pressures in the truck market today.
