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Why did Fiat Chrysler choose Mike Manley?

by David Zatz on

Analysis. For years, there has been speculation over who would take over Fiat Chrysler when Sergio Marchionne retired — a date set for sometime after the company reached “no net debt.”

Now, with Mr. Marchionne no longer available for health reasons (story to follow), Jeep CEO Michael Manley has been placed in charge.

Mike Manley

I have long believed Mike Manley was a natural for this position, mainly because he was in charge of the most successful of the brands — Jeep — which has a mass market, strong growth, premium pricing, and an increasing global presence. Alfa Romeo has yet to prove itself in sales, Maserati is still relatively minor (and may have plateaued), and Dodge’s growth outside North America faltered, but Jeep has gone from strength to strength.

What’s more, Manley showed that he “got” Jeep and was willing to fight for the integrity of the brand, which is key in a company with at least seven auto brands. The Renegade was, according to informal talks with people in the company, delayed for quite a while to meet off-road standards. The Cherokee passed the Rubicon test. Manley could have gotten thinly disguised station wagons on the market more quickly, but held out for more capable vehicles.

Jeep’s growth outside the United States was mainly due to the Jeep Renegade and Compass, which were both developed under Manley’s rule. So was the Cherokee, which suffered at first from engineering miscalculations, but eventually turned out to be a strong performer.

Manley has worked with “both sides” of the company, as well as the Indian development teams, and presumably the large Brazilian contingent, to make Jeep a success. That’s important to Marchionne’s “one company” vision — integrating all parts of Fiat and Chrysler together.

Unlike DaimlerChrysler, Fiat Chrysler (FCA) is meant to be one permanent unified structure; the method now appears to be that platforms and architectures are developed jointly, and then different brand groups (which you can roughly call “mass market” and “premium,” though for chassis, there’s also “Jeep”) develop their own versions off those basics. You can see that with the new four-cylinder engines, which share basic designs but might not share any actual parts.

A large part of the rationale for Mike Manley, and what sets him apart from Dodge’s Tim Kuniskis, or Bob Lees, who has done wonders in powertrain, or Pietro Gorlier, the urbane and extra-civil leader of Mopar, is that he is not from the United States or Italy. Manley is British, and can be considered outside both of the largest Fiat Chrysler nations.  By choosing Manley, Marchionne did not show favor to the USA or to Italy. That pushes forward the “one company” message and hopefully brings it another step closer to permanent reality.

As for what Manley will do with FCA, chances are likely he will continue the current pattern. As soon as he took over Jeep, he insisted that the existing Compass gain a Trail Rated version. He himself told me in 2012 that Trail Rating essentially meant being best in class — from our interview at Allpar:

…for each segment, we have a series of measurements, processes, and standards that we know our Jeeps have to meet on the Trail-Rated end, so we can be comfortable that we are true to what Jeep means.

That changes by segment. Wrangler, for example, has a much tougher series of measures than Compass. So in each segment, our aim is to have the most capable vehicle in that segment.

That doesn’t just apply to the Trail Rated models:

We have capability standards for all of our vehicles – capability, safety, starting standards for every single vehicle in the range. But we know that at the upper end of capability, our customers look for the trail-rated. We make sure that those vehicles are capable of being Trail-Rated…

[Having Trail Rated versions of each vehicle is] very important to us, because that’s DNA that traces our history all the way back to Wrangler as to be in each of our vehicles. Now there are different levels of capabilities, but our aim is in the segment that those vehicles play in that we will offer a model that is the most capable, and that model will be trail-rated and the only way to be trail-rated is to meet the rigorous standards that we have.

Manley himself told me that he was guided by customer demands in making changes to the Compass when he took over, and insiders have agreed that he listens to the voice of the customer more than most industry executives. That bodes well for a future when, as Sergio Marchionne frequently noted, the strength of a brand will be all-important and “low-cost” strategies don’t work as well.

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