Toyota's Top North American Exec Defects to Chrysler
Toyota's top North American executive is defecting to Chrysler, a move that stunned the auto industry and gives a highly regarded leader and consummate salesman the chance to turn things around at the struggling U.S. automaker.
Chrysler said Thursday that Jim Press will become its vice chairman and president, in charge of the automaker's sales and marketing operations. Press will resign Sept. 14 from Toyota Motor , where he has served as the first non-Japanese president and chief operating officer for Toyota in North America since 2006. Before that, he was head of Toyota's North American sales during the company's rapid expansion.
"Jim Press is literally an industry icon, and that gets people's attention," said David Cole, chairman of the Center for Automotive Research. "Jim is an excellent leader. He has a tremendous amount of confidence in his own skills and ability."
Press, 60, is joining at a difficult time for Chrysler, which lost $618 million in 2006 and has had trouble gaining U.S. market share despite a handful of hit products like the 300C sedan. The company is in the midst of a restructuring and expects to shed 13,000 hourly and salaried jobs in the U.S. and Canada by 2009. Last month, DaimlerChrysler finalized the sale of a controlling stake in Chrysler to the private equity firm Cerberus Capital Management, ending a disastrous nine-year alliance.
Press joins Chairman and CEO Robert Nardelli and Tom LaSorda on Chrysler's top management team. LaSorda, who will share the titles of vice chairman and president with Press, will run the company's manufacturing and purchasing operations, while Press will handle sales, marketing and product strategy, said company spokesman Mike Aberlich.
"Tom LaSorda and I are thrilled that one of the most successful executives in the history of the auto industry has joined our leadership team at the New Chrysler," Nardelli said in a statement.
'Most Difficult Decision I Have Made'
Press joined Toyota in 1970 after a brief stint at Ford Motor Co. He has held dozens of jobs at Toyota in advertising, marketing, service and product planning. In June, he became the first non-Japanese member of Toyota's board of directors.
"Toyota has been the centerpiece of my life. This was the most difficult decision I have made," Press said in a statement.
Toyota said Shigeru Hayakawa, a Japanese veteran at the company and Toyota managing officer, would be the new president of Toyota North America.
Hiring Press is Chrysler's third major executive announcement since Cerberus took control. Cerberus announced Aug. 6 that Nardelli, the former CEO of Home Depot Inc., would become Chrysler's chairman and chief executive. Later in August, Chrysler hired Deborah Wahl Meyer, 44, a top marketing executive from Toyota's Lexus luxury brand and a colleague of Press.
Kevin Tynan, senior automotive analyst for Argus Research, said Press' hiring shows Cerberus plans a serious restructuring.
"It's the kind of management team that will get things done," Tynan said. "If you were looking to acquire the company and polish it up to sell it, you wouldn't go to this extent to hire talent."
United Auto Workers President Ron Gettelfinger said luring Press is "a major coup for Chrysler." Speaking to reporters after a speech Thursday at the Detroit Economic Club, Gettelfinger said he firmly believes Cerberus is committed to Chrysler.
"I'm satisfied that they're not strip and flip," Gettelfinger said.
Tynan said Press' departure could hurt Toyota, since he put an American face on the company as it grabbed sales from domestic automakers. Toyota doubled its share of the U.S. market between 1990 and 2006, from 7.5 percent to 15 percent, according to Ward's AutoInfoBank.
"He removed the 'us versus them' stigma," Tynan said. "It could very well be that the impact to Toyota is greater than the impact to Chrysler."
Besides spearheading Toyota's U.S. growth, Press was credited with energizing Toyota's dealers, something he said he wants to do at Chrysler. Toyota President Katsuaki Watanabe expressed his gratitude to Press Thursday.
"Jim has played a significant role in strengthening Toyota's presence in the U.S.," Watanabe said.
Press will be asked to help turn things around at Chrysler, which has had problems in its sales and marketing operations. Last year, dealers revolted when the company produced too many vehicles and tried to push them into showrooms. Chrysler's U.S. market share has held steady at around 13 percent for the last five years; it was 12 percent in 1990.
"You can't argue with the level of success that Toyota has had," Chrysler spokesman Mike Aberlich said. "The way they've developed the car side of the business, the way they've developed their relationships with dealers."
Aberlich said hiring Press is no reflection on LaSorda, who was demoted from chairman and CEO when Nardelli was hired.
"The guy is such a remarkable get that you're going to do it," Aberlich said of Press, equating the hiring with a baseball team bringing another power hitter onto its roster.
Chrysler would not comment on Press' compensation package, and it doesn't have to release details as a private company. But Aberlich said compensation will be tied to Chrysler's performance.
"He'll help turn us around and he'll be rewarded," Aberlich said.
Cole said the paycheck probably wasn't the biggest lure for Press.
"I'm not sure that money is the big deal," he said. "It's really the challenge and the opportunity that's the most important thing to him."
Chrysler made $1.8 billion in 2005 but swung to a $1.98 billion loss in the first quarter of this year.