Friday, June 1, 2007

Chrysler's Team Canada

Canadians in driver's seat as carmaker attempts turnaround under new owners

Nicolas Van Praet, Financial Post

Published: Friday, June 01, 2007

U.S. automaker Chrysler has a little-known secret that has its Canadian staff beaming -- it's run by a bunch of Canucks. And they're determined to restore the company's automotive glory.

Four of the eight managers on Chrysler's executive committee, essentially the top managerial team at the carmaker, are now Canadians. They include Tom LaSorda, Chrysler's Windsor-born chief executive since 2005, who is sometimes called "the dean of lean" for his talents cutting costs, and Simon Boag, the Georgetown, Ont. native promoted last week to head of procurement and supply.

The Canucks are by no means the first Canadians to rise to the top rung of the U.S. corporate ladder. But their dominance in Chrysler's executive suites is unusual, analysts say, especially given the automaker's prominent place in the American psyche.

Critics have blasted Chrysler in recent years for boosting sales by building more cars and trucks than the market demanded and forcing them on reluctant dealers. The company has also bet on risky designs -- with sales duds offsetting smash hits such as the 300 sedan. Chrysler could use a little Canadian modesty and judiciousness now as it executes its turnaround under controlling ownership of Cerberus Capital Management, said Dennis DesRosiers, a leading auto consultant based in Richmond Hill, Ont.

"Americans win big and lose big, it's more of a trait," Mr. DesRosiers said. "What Chrysler needs right now is a conservative stick-your-nose-to-the-grindstone-and-get-the-job-done approach ? Chrysler doesn't have the ability to make bets right now. They need competency more than anything."

Frank Ewasyshyn, the Windsor native who heads Chrysler's manufacturing, is also among the Canadians on the executive committee. Halifax-born Steven Landry, sales chief for Chrysler in North America and head of the company's global marketing, service and parts divisions, is the other.

Mr. LaSorda, who comes from a family of union activists in Windsor, is the highest-ranking Canadian ever in the history of Detroit's traditional Big Three. The company he now leads once battled his maternal grandfather in court after he was arrested for conspiring to stop non-union workers from entering a Chrysler plant during a strike in 1946. Mr. LaSorda and Mr. Boag both worked at General Motors Corp.'s CAMI Automotive joint venture plant with Suzuki in Ingersoll, Ont. Both men are described as having a knack for identifying waste and getting operations lean, something they learned from the Japanese in Ingersoll.

One explanation of why so many executives cutting their teeth in Canada rise to the top ranks of companies is that with our smaller market, they get a broader managerial experience at an earlier stage in their careers than their U.S. peers, said Chris Piper, a specialist in operations management at the University of Western Ontario. He suggested that now that the roles of Canadians have been amplified at Chrysler after the break from Daimler in Germany, they may be "less likely to be sucked into Detroit-think."

Mr. Landry said last week he felt privileged to be pulling the levers of Chrysler's sales efforts in North America as it goes private under Cerberus. "It kind of snuck up on me fairly quickly," he said of his new appointment. "I?m a kid from Nova Scotia and I'll be 25 years with the company in September so I'm really proud of that."

He said the move by Cerberus to take Chrysler private and away from the rigours of quarterly reporting allows the executive team to be "leanminded," fast, and focused. "We're really convinced that we can be successful."

Many U.S. buyers have shunned Chrysler's truck-heavy lineup over the past year as US$3-a-gallon gasoline loomed, and the company's attempts to gain traction with several new fuel-efficient vehicles like the Jeep Compass are still in the early stages. Sales for the first four months in Canada are up 4.3% over last year, but U.S. sales are down 2.9%.

"In the consumer's mind, Chrysler has a gap in cars," said George Magliano, director of automotive research at consultancy Global Insight. "They still have an issue."

Annual sales of Chrysler Group's Dodge, Jeep and Chrysler brand vehicles in the United States fell 4.4% between 2001 and 2006, to 2.14 million last year, according to DesRosiers Automotive Consultants. In Canada, the group's deliveries dropped 10.1% over the same time, to 220,553.

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