Chrysler CEO Tom LaSorda will have an army of auto executive peers watching over him after new new owner Cerberus Capital Management takes over from DaimlerChrysler in a few months.
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Cerberus’ “deep bench,” as LaSorda puts it, according to an Associated Press (AP) report, includes Wolfgang Bernhard, Chrysler’s former chief operating officer, and David Thursfield, former head of Ford’s international operations, along with Robert Rewey and Gary Dilts, former sales and marketing executives at Ford and Chrysler, respectively.
In a post-sale announcement briefing for US journalists, LaSorda reportedly said he’d be “crazy” not to use the product development and cost-cutting talents of Bernhard, but added: “He works for Cerberus.” A new Chrysler board of directors will be formed in the coming months, LaSorda told the news agency.
As head of a private company, LaSorda reportedly said, he won’t feel as pressured to make decisions that aren’t in the company’s best interests. One example: Chrysler’s disastrous buildup of inventory last year in an ill-fated campaign to meet sales expectations back in Germany.
AP noted that Cerberus is promising patience while LaSorda tries to lead a turnaround, but like any private equity group, it will likely seek a substantial return on its $US7.4bn investment in a fairly short period.
For LaSorda, the pressure to deliver is as intense as ever, according to the report. “I didn’t expect anything else – Daimler leaves and the pressure comes off,” he told AP a day after DaimlerChrysler announced plans to sell all but 19.9% of the American car company to Cerberus. “It’s very, very critical that you get the returns.”
AP said Cerberus had endorsed LaSorda’s recovery and transformation plan, outlined in February. “That’s a three-year outlook. I’m sure beyond that we’ll be more aggressive,” LaSorda reportedly said.
The Chrysler, Dodge and Jeep brands “will not be broken up under any circumstances,” LaSorda told AP. “The product plan is set.”
According to the report, one priority is to find global partners that will help Chrysler develop small, inexpensive cars for developing markets like Southeast Asia, India and Russia – something that Daimler could not provide through its Mercedes luxury brand. Chrysler already has a tentative deal with China’s Chery Automobile to import Chinese-built small cars to North America and Europe.
February’s announcement by DaimlerChrysler that it would explore all options for Chrysler was a distraction for employees at its Auburn Hills, Michigan, headquarters, AP noted.
“It’s now decided,” a relieved LaSorda told the news agency. “We can move forward.”
