Cerberus' Chrysler bombshellHiring Toyota's top American executive casts the automaker's future in a whole new light, writes Fortune's Alex Taylor III. NEW YORK (Fortune) -- Today's stunning announcement that Chrysler has hired Toyota's top American executive, Jim Press, as president and vice chairman, is a huge coup for the newly-private automaker. Press had elevated Toyota (Charts) in the U.S. from being just another Japanese automaker to a powerful contender for industry leadership with General Motors (Charts, Fortune 500). Arguably, Press is the most successful American auto executive since World War II. But his hiring also raises big questions about chemistry among Chrysler's three top executives, and about Cerberus' ultimate intentions for the company. Press is schooled in Japanese-style management: he's low-key, persistent, and plays for the long term. He has been patiently teaching his superiors in Toyota's home office about the peculiarities of the American market for two decades and quietly allowing them to make mistakes. The success of the Toyota Tundra fullsize pickup, after two earlier failures, is a testament to his skill and understanding of Japanese psychology. By contrast, his boss, chairman and CEO Bob Nardelli, is intense, impatient, and driven by private equity owners clamoring for a return on their investment.
Whether this partnership succeeds will depend on their ability to match Nardelli's short-term need to show measurable progress with Press's instinct not to rush things. The long product cycles of the auto industry - where it takes four years to bring out a new model - could increase the tension between the two. Cerberus, the major owner of Chrysler, keeps insisting that it bought the company for the long run, and the hiring of Press would seem to reinforce that. Yet given the decline of the American auto industry over the last three decades, it is hard to imagine Chrysler being more valuable as a stand-alone company five years from now than it is today. At Chrysler, Press joins another highly-regarded Toyota alumna, marketer Deborah Wahl Meyer, who signed on in August. More than anything, their hiring shows that Cerberus is playing for keeps by going after the best talent in the auto industry. The industry rumor mill has it that Meyer got an enormous pay package that would make her one of the highest paid executives in Detroit - and she will be worth it if she delivers. Cerberus' aggressiveness casts a huge shadow over Ford Motor and its new CEO Alan Mulally (Charts, Fortune 500) who, during his first 12 months on the job, has hired exactly nobody from the outside, even though Ford, after years of infighting, has one of the weakest executive lineups in the industry. Just by hiring away first Meyer and then Press, Cerberus has shown a willingess to act both quickly and smartly and defy conventional wisdom. Except for the odd manufacturing expert, it is hard to think of any other American automaker raiding a Japanese one for talent. The old-line Detroit thinking tended to regard them as not tough enough for the rough-and-tumble atmosphere of the Motor City. Press, 60, was elected to Toyota's board of directors as recently as June, the first non-Japanese executive to be so named. It was a high honor but Press was unlikely to exercise much influence, since he was outnumbered by several dozen Japanese executives. His other job, as president of Toyota Motors in North America, based in New York, left him almost no hands-on responsibility for operations. Newly remarried, and spending two weeks a month in Japan, he may have welcomed an opportunity to get away from the brutal travel and become more directly involved in the auto business. At Chrysler, the arrival of Press will leave even less room at the top for Tom LaSorda, the former Chrysler Group CEO. So much for Cerberus' earlier praise for LaSorda and the rest of Chrysler's legacy managers. The well-liked LaSorda is a manufacturing specialist known for his close ties to the United Auto Workers union. But Chrysler hasn't been winning many awards for product quality lately, and the UAW stiffed Chrysler when it came asking for the same givebacks on medical care that General Motors and Ford received. On balance, the hiring of Press is a huge win for Cerberus and Chrysler. Mike Jackson, head of AutoNation, the country's largest dealer group, has been watching developments at the company closely. Says he: The biggest challenge for Ford and GM, as well as Chrysler, is to reinvent their business from factory-driven push to market driven pull. That requires a complete reinvention of their business model, and nobody understands that better than Press. " Adds Jackson: "He is truly a transformational executive." Press will have plenty of opportunity to prove that at Chrysler. |
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