Sunday, July 22, 2018

New Chrysler CEO looks to repeat Jeep magic

DETROIT �� Jeep rides to the rescue again, as brand boss�Mike Manley takes the reins�of Fiat Chrysler Automobiles, following a�post-op health crisis�for legendary CEO Sergio Marchionne.

Manley has led Jeep to an unprecedented period of success, broadening the iconic brand��s product line, adding sales and production around the world and generating profits beyond analysts�� wildest expectations.

A lanky Brit with a dry wit, the 54-year-old Manley is beloved by Jeep engineers and trusted by the brand��s famously demanding customers.

Leading the brand since 2009, Manley internalized Jeep��s values as it added new models and soared to record sales. Accepting a Free Press Automotive Leadership Award for Jeep��s success in 2016, Manley led a cadre of tieless Jeep designers and engineers into the banquet room with a shrug and a grin: ��It��s a Jeep thing.��

He added responsibility for FCA��s other money machine, Ram trucks in 2015.

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Global success

Manley also led FCA��s Asia-Pacific business and ran the Chrysler Group��s international operations, experience that will stand him in good stead as the company looks to make up for lost time in China and other developing markets.

Equally at home at a black-tie dinner or a Jeep event in rugged wilderness, Manley will have to execute the�ambitious five-year business plan�Marchionne laid out June 1. Fortunately, he was one of the plan��s architects.

Jeep and Ram are pillars of the strategy, ensuring that Chrysler��s Auburn Hills tech center and offices will remain a linchpin of the company.

Challenges include speeding up the company��s development and introducing new vehicles. Marchionne regularly canceled and delayed new models as he concentrated on eliminating a heavy debt load and feeding the brands he believed had the most potential.

That worked, but left FCA far behind the competition in sales hotbeds like China, and largely absent from fast-growing market segments like city-oriented urban utility vehicles.

Mike Manley, Head of Jeep Brand talks with journalists the Design Dome in Auburn Hills on Tuesday, March 20, 2018. (Photo: Eric Seals, Detroit Free Press)

Alfa Romeo must carry its weight

Despite those delays, FCA replaced two of its most important and profitable vehicles this year. The all-new Jeep Wrangler and Ram 1500 pickup should be rolling ATMs spitting out cash to finance vehicles like the oft-delayed Jeep Wagoneer and Grand Wagoneer and a replacement for the Grand Cherokee.

FCA is ahead of other automakers because Marchionne shifted production and investment away from slow-selling sedans and toward SUVs and pickups faster than other automakers, but it still lacks entries in a number of profitable segments.

More daunting, the Alfa Romeo luxury brand has been all but sales-proof in the United States. Marchionne delayed new vehicles for volume brands in favor of developing sport sedans and luxury SUVs for Alfa.

The resulting vehicles �� the Giulia compact sport sedan and Stelvio SUV �� have style and sparkling performance, but Alfa��s thin model line, low customer awareness and a history of poor quality have kept the brand from generating the cash flow Marchionne expected. The Giulia and Stelvio have yet to repay that faith.

In this Friday, May 21, 2010 file photo, Chrylser CEO Sergio Marchionne, left, is seen with Jeep brand President and CEO Mike Manley at the Jefferson North Assembly Plant, in Detroit. (Photo: Carlos Osorio/Associated Press)

Fiat Chrysler's�next challenges

There��s no turning back, though. FCA has bet the future on its ability to build and sell high numbers of �Alfas and the pricier Maserati luxury cars and SUVs. The company is heavily invested in the brands, and its ambitious plans for new technologies like electric and self-driving cars depend on the fat profits luxury brands generate.

Meanwhile, the Chrysler, Dodge and Fiat volume brands seem to have little future. Manley��s team may also have to find a way to wind them down without alienating aficionados, always a tricky task for brands with a long history.

Despite its surprising financial and sales success, FCA remains a small company, expected to seek alliances or mergers with other automakers.

Marchionne, a dual Italian-Canadian citizen with an MBA from the University of Windsor and a career mostly in Europe, was picked to lead Fiat in 2004. The company was paired with Chrysler as the smallest of the Detroit 3 automakers emerged from bankruptcy and government bailout in 2009. Fiat completed its deal for Chrysler in 2014, and in 2017, Fiat Chrysler reported a pretax profit of $4.4 billion (3.5 billion euro).

Fiat Chrysler has exceeded expectations so far, generating consistent profits and avoiding acquisition by a foreign giant, but as Manley takes over, the future looks more challenging, not less.

Contact Mark Phelan: mmphelan@freepress.com or 313-222-6731. Follow him on Twitter @mark_phelan.