KEY POINTS:
Chrysler LLC said on Thursday it had hired longtime Toyota Motor Corp executive Jim Press, which analysts said showed Chrysler's new private owner was serious about a longer-term turnaround plan for the automaker.
Press, who spearheaded Toyota's recent fast growth in the US market and became the first non-Japanese executive named to the company's board, will be responsible for Chrysler's sales, marketing and product strategy.
Press, 61, will report to Chrysler Chief Executive Bob Nardelli, a former Home Depot Inc chief executive named to head Chrysler in August days after Cerberus Capital Management took control of the automaker.
The defection of Press from Toyota after a 37-year career comes at a crucial time for the Japanese automaker, which is on the brink of overtaking Ford Motor Co as the second-largest player in the US market.
Press will share the vice-chairman and president roles created at Chrysler last month with Tom LaSorda, a manufacturing expert who stepped down as CEO to make room for Nardelli.
Since Cerberus bought Chrysler, LaSorda's role at the automaker has been reduced, prompting speculation among analysts that LaSorda might leave the company once Chrysler signs a new labor contract with the United Auto Workers union.
But LaSorda, who is well-respected by Chrysler's union leaders, has said he intends to remain with Chrysler.
The appointment of Nardelli, a hard-charging executive with a reputation for cutting costs, surprised analysts and prompted concern among some Chrysler workers about whether Cerberus was looking to shed assets for a quick profit on its US$7.4-billion ($10.8 billion) acquisition.
But by adding Press to the executive roster, Cerberus has shown that it means to hold onto the automaker and work on a longer-term restructuring, analysts said.
"This is the kind of roster you would want to put together if you were looking to keep Chrysler in house for a while," Argus Research analyst Kevin Tynan said.
Erich Merkle, an analyst with IRN Inc, said hiring Press could also silence critics who had questioned whether Nardelli, an industry newcomer, could handle Chrysler's turnaround.
"I think the hiring of Press may redeem Cerberus a bit in the minds of people that thought they were going to chip away at costs and flip assets," Merkle said.
While at the helm of Toyota's US operations, Press oversaw sharp sales gains, taking Toyota's share of the US vehicle market from below 10 per cent in 2000 to 15 per cent and overtaking Chrysler as the No 3 player.
Also during his tenure, Toyota rolled out the youth-oriented Scion brand and launched a redesigned full-size Tundra pickup truck in a move that took direct aim at the last remaining segment of the market dominated by Detroit automakers.
Press also won credit for Toyota's strong ties with its highly profitable dealer network, an area that has been a persistent problem for Chrysler.
Chrysler, under LaSorda, angered dealers last year by giving them more vehicles than they could sell and then saying it wanted to cut off weaker franchises from its brands.
"Part of my new responsibilities will be strengthening and energizing the dealer body," Press said in a statement. "This is something I was passionate about at Toyota and will be passionate about at Chrysler."
Jeremy Anwyl, chief executive of industry-tracking firm Edmunds, said Chrysler's 3700 dealers for its Chrysler, Jeep and Dodge brands needed to be motivated to invest more in advertising and other activities to support the automaker's return to profitability.
"They were in open revolt," Anwyl said. "You want dealers to be excited not just placated."
Glenn Mercer, an independent auto consultant, said Press could bring Toyota's process-oriented business discipline to Chrysler, which has been known for a more fast-wheeling approach to decision making.
"That will be especially valuable at Chrysler, which has a history of acting impulsively - sometimes to its great advantage ... and sometimes to its great detriment," he said.
Press becomes the second prominent Toyota executive to join Chrysler's new executive team. Last month, Chrysler hired Deborah Wahl Meyer, formerly vice president of marketing for Toyota's luxury Lexus division, as chief marketing officer.
UAW President Ron Gettelfinger called the hiring of Press "a great move on Chrysler's part." He added, in a reference to Toyota's track record for operating non-unionized US factories, "We welcome Press to the Chrysler family - as well as to the UAW."
Toyota named Shigeru Hayakawa, 53, a veteran of its public affairs departments, to replace Press as president of its North American operations based in New York.
"I was looking forward to (Press) playing a bigger role as a member of our management team, so I am sorry to see him leave," Toyota President Katsuaki Watanabe said in a statement.
- REUTERS
