Sergio Marchionne's influence lingers for FCA CEO Mike Manley

by admin December 9, 2018 at 11:02 am

DETROIT — Fiat Chrysler Automobiles CEO Mike Manley clearly learned many lessons from his predecessor — and even some the late Sergio Marchionne never intended to teach.

In moving to open a second assembly plant in Detroit and naming a COO for North America last week, Manley proved what a good student he was during his extended apprenticeship at Marchionne’s side.

One example of a lesson learned: never again cut off the flow of a hugely profitable product for months at a time to retool an assembly plant. It was a costly lesson for Marchionne in 2013 with the botched launch of the Jeep Cherokee, which left the brand without a midsize SUV for more than a year.

To help prevent a repeat of that situation, FCA will convert the Mack II engine plant it closed in 2012 into an assembly operation for three-row Grand Cherokees in the 2021 model year, according to a report last week in The Detroit News that Automotive News subsequently confirmed.

The additional plant should allow FCA to retool its Jefferson North Assembly Plant, which makes the Grand Cherokee and Dodge Durango across the street from Mack II, in time for the planned redesign of the Grand Cherokee in 2020 without interrupting the supply of its top-line Jeep SUV.

Manley also learned to delegate his responsibilities rather than hoarding titles the way his predecessor did.

Marchionne was an admitted workaholic with scores of direct reports and a host of executive titles that spanned both the globe and several corporations. His pace and the sheer scope of his responsibilities were a thing of wonder — until Marchionne died before he had a chance to retire.

Delegating

Since taking over July 21, Manley has purposely focused his own role as CEO, assigning away other roles to underlings, or — as he did last week — bringing in outsiders to help.

On Dec. 6, Manley named Mark Stewart COO of FCA’s North American region, a job held by Marchionne at the beginning of 2018 and then by Manley. Stewart, 51, has a background as an electrical engineer and was COO of auto supplier ZF TRW. For the past year, he was Amazon’s president of operations, managing customer fulfillment across 200 facilities with 180,000 employees, Manley told employees in an email that FCA released publicly.

Stewart is the second regional boss Manley has appointed since he became CEO. In October, he appointed longtime Mopar chief Pietro Gorlier as the head of FCA’s Europe, Middle East and Africa region. Manley had held both regional jobs on an interim basis after Marchionne’s death and the sudden resignation days later of Alfredo Altavilla, who had led the Europe, Middle East and Africa region.

The two appointments, along with earlier assignments of Tim Kuniskis to head Jeep in North America and Alfa Romeo and of Reid Bigland to head up Ram again, leave Manley with just one title: CEO.

Plant repercussions

The decision to build a three-row version of the Grand Cherokee likely means the end of the Dodge Durango.

Reintroduced in late 2010 largely, according to Marchionne, to help suppliers to the Grand Cherokee keep up with production, the Durango has had an up-and-down life. Averaging just over 5,000 units per month of sales in the U.S., the Durango has given dealers a much-needed all-wheel-drive, three-row SUV option for customers who refused to drive a minivan.

But while the Durango’s Dodge branding allowed for an SRT version to be introduced last year, it also probably cost FCA and its dealers some money. Manley, Marchionne and the rest of FCA figured out long ago that a Jeep badge helps separate consumers from their hard-earned dollars at a clip that has been the envy of the industry for several years.

The addition of a three-row Grand Cherokee — which will be unibody construction like the two-row version — probably will not affect plans to produce luxury body-on-frame Jeeps under the Wagoneer and Grand Wagoneer nameplates. Those vehicles still are slated to be produced at the Warren Truck Assembly complex, just north of Detroit, after the plant ends its run of Ram 1500 Classics.

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