Chrysler and Fiat Integrate Leadership

Sergio Marchionne, chief executive officer of Fiat SpA and Chrysler Group LLC, unveiled a single management team for the two companies Thursday and will personally lead the North American division of the newly united group.

The move effectively shifts the nexus of power to Auburn Hills, though Fiat-Chrysler's formal headquarters will remain in Turin, Italy. The news comes a week after the Italian automaker bought out the U.S. and Canadian governments, which bailed out a bankrupt Chrysler in 2009, according to The Detroit News.

"Marchionne's decision to keep the role of overseeing the business in North America shows that the center of gravity of the combined entity will be in the U.S.," said Gianluca Spina, chairman of the business school at the Polytechnic University of Milan.

"The integration process is going extremely fast, as is Marchionne's style."

Fiat-Chrysler will now be led by a 22-member global executive council. The group's operations will be divided into four global regions.

In assembling his leadership team, Marchionne said he was only interested in picking the most talented person for each position. But the group he selected is a balance of Americans and Europeans, Fiat executives and Chrysler managers.

Marchionne, 59, was himself born in Italy, raised in Canada and lives in Switzerland. He has a condo in Metro Detroit.

His team includes eight Italians, five Americans, two Germans, two Britons, a Brazilian, a Frenchman, a Canadian and a Swiss. Eleven of the executives currently work for Fiat, nine for Chrysler and one for CNH Global NV, which is part of Fiat Industrial SpA.

"These appointments are the result of an extensive process of evaluation of the technical and leadership skills of the individuals who have been appointed to the GEC. But equally important is the fact that they reflect the multicultural geographically diverse nature of our businesses," Marchionne said.

"We recognize in these leaders the future of Fiat-Chrysler as an efficient, multinational competitor in a global automotive marketplace."

Fiat's approach is a sharp contrast to Daimler AG's approach to working with Chrysler after it purchased the Auburn Hills automaker in 1998.

Most senior positions in DaimlerChrysler AG, as the combine was known, were held by Germans and major decisions were made in Stuttgart. American executives reported being excluded from important conversations when their counterparts shifted to German. Relations soon soured and the marriage fell apart in 2007, when Daimler sold Chrysler to the private equity firm Cerberus Capital Management LP.

Marchionne seems determined not to repeat that mistake. When one recently arrived executive started speaking to his boss in Italian in the elevator in Auburn Hills, Marchionne told him to speak English while in the presence of the other employees.

One of the most important positions on the new council, chief financial officer, went to Chrysler Group CFO Richard Palmer.

"The Daimler thing never worked," said Jay Baron, chairman of the Center for Automotive Research in Ann Arbor. "This has been incredibly amicable."

Fiat and Chrysler are better partners because they both are rebounding from financial crises and both compete in the lower half of the automobile market, he said. Neither company had a truly global reach until now.

Fiat Purchasing Chief Gianni Coda will run the group's operations in Europe, Africa and the Middle East. Cledorvino Belini, the current head of Fiat's Brazilian operations, will lead the South American division. Michael Manley, currently in charge of the Jeep brand, will head the Asian division.

Marchionne will remain CEO of both Fiat and Chrysler. The other regional chiefs will hold the title of chief operating officer for their respective business units. Other COOs include Pietro Gorlier, who will be in charge of parts, service and Mopar; Eugenio Razelli, who will head the components division and parts subsidiary Magneti Marelli SpA; and Riccardo Tarantini, who will lead the Teksid SpA and Comau SpA subsidiaries.

"We have now reached the right moment to step on the accelerator of the Fiat-Chrysler integration," Marchionne said Thursday.

But a formal, legal merger is likely at least a year away, he said in a conference call earlier this week. That is because of an ongoing dispute with the United Auto Workers over the valuation of Chrysler.

Fiat was given control of the company in 2009 as part of a deal brokered by the Obama administration. A union-run retiree health care trust known as a voluntary employee beneficiary association, or VEBA, also received a stake in the new Chrysler. Fiat, which is now the only other shareholder in Chrysler, would like to buy out the UAW, but the two sides haven't agreed on a price.

Marchionne said the solution is to take Chrysler public again, let the union sell its shares on the open market and allow Fiat to consolidate its control of the company. It already controls 53.5 percent of Chrysler and is on track to increase that to 58.5 percent by the end of the year.