A draft of the damage from top to bottom – can Save Chrysler Marchionne

When Chrysler merged with Fiat on 10 June 2009, there were grounds for hope and optimism. Following is an infinite string of bad news perhaps industry automatically is not dead yet.

On paper, it looked like a good deal for all. Fiat will return to the market of the United States and to sell its popular 500 (Cinquecentro), Chrysler will receive a line of cars, which consumers actually purchase and tens of thousands of workers will keep their work.

But the real prize may be simply Sergio Marchionne, CEO of Fiat and now Executive Director of FiatChrysler.

When he became the first CEO of Fiat in 2004, Marchionne inherits the company on the edge of the error. It produces no product line and has suffered more than 12 billion dollars in losses over the past five years.

For the transformation of the company, he embarked on several strategic and operational projects.  He fired a senior, upended the bloated bureaucracy and brought a team of young aggressive managers on board. Then he reviewed all the projects and killed those who may not pass the test of the market.  And he hired new designers and seek a portfolio of exciting projects which would customers back to the delegations.

Less than three years, he succeeded in one of the most impressive cycles in automotive history.

Now, as part of its plan to grow global competitor Fiat, he took over Chrysler.  But can he perform his magic once again?  It can save yet another company whose circumstances in many ways, but not all, are almost similar to those faced by Fiat for only five years ago? Can his style of the manual, as well as the Fiat 500 be successfully exported this side of the Atlantic?

If you look in Marchionne entry itself, is not only impressive, but this implies that he may be the right person at the right time. But before we can reach that conclusion, their ability to succeed must be considered in the context of what happened with Chrysler in the last decade.  In this case, success cannot be assured.

DajmlerKrajsler

In May 1998, Daimler-Benz merged with Chrysler.  Jurgen Schrempp, CEO of Daimler-Benz, so called "merger of equals."   Robert Eaton, CEO of Chrysler, promised that "within five years we will be among the big three automobile companies in the world." Even leveraging both companies from Europe and the United States, it was not considered order; Robert a. Lutz, Vice President of Chrysler, argued that there has not been determined "not culture collision here."

But behind this display of public enthusiasm and corporate kinship, Schrempp has full control and his actions became clear, that this is really not a "merger of equals."  Ethan replies from postponement of Schrempp, often retreating to the safety of its Office in Auburn Hills; its executives replies from defecting Ford and General Motors.  Recently Chrysler is rudderless, projects were failing and within a few years, not only is the product line in trouble but the merger was too. The Government had many reasons for its failure to act, that the most commonly cited is a clash of corporate cultures.

Cerberus

In 2007 DajmlerKrajsler sells Chrysler of Cerberus Capital Management, private equity firm with no experience in making cars. Bob Nardelli, former CEO of Home Depot, was elected head of the company. For many, it was clear that the transaction is strictly financial and few believe that Cerberus is committed to building a competitive company in the starts with too much capacity increasingly competitive auto industry.

Nardelli was CEO of "hard as nails".   Business week, in August 2007, stated that he "alienated. .. almost all of the management, he succeeded. "  While many believe that his military style exactly what is necessary in Chrysler, it does not work.  In this business week article University Professor, Gerald Meyers, says Cerberus has the right idea, but Nardelli was "the wrong man."

Then Chrysler is hit by a perfect storm. Oil rose to over $ 140 a barrel, the economy went into a tailspin, and is caught by the Chrysler production line dominated by gas guzzlers, nobody wants to buy.

Marchionne's challenge

It is located in this context, that Fiat was taken in Chrysler as 20 percent.  Marchionne inherits shattered by remote, still dominant, style, organisation of Schrempp and "hard as nails" style of Nardelli.  It succeeded the labour force, which is surviving job losses, pay cuts, deterioration of benefits and the anxiety of the future.  But above all, he succeeded to the workplace, which has suffered one project after another absence, as well as the culture of the project, which has failed to underline the markets not methodology.

Here is the problem; his style of the manual, is characterized by rapid and Disruptive changes he made five years ago may not be very different from the style of leadership of its two predecessors in Chrysler.

But it must be different if he is to succeed in sustainable changes.

Is it flexible enough to become a transformation leader who so desperately Chrysler or will he ignore Chrysler rough ride over the past ten years, take the reins, ignores cultural differences and simply repeat history? Can it be difficult on the problems, but at the same time, restoration of morality and to create a project-based environment that motivates alienates not team project?

Or, it will be the third in a string of difficult directors and continues with beatings Chrysler improve morale?

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Thanks

Barry Shore
Global strategy of the project