Doomed from Day 1?
By some accounts, the seeds of Press’ demise were sewn before he set foot in his 15th-floor office at Chrysler headquarters in Auburn Hills, Mich.
Press, whom industry sources say had been discreetly sounding out automakers, including General Motors, about jobs, wound up playing second fiddle to industry outsider Bob Nardelli, a Cerberus adviser and the company’s choice as Chrysler’s CEO.
Nardelli set up an "office of the chairman," with Press as Mr. Outside, in charge of all sales, marketing and product planning, and Tom LaSorda as Mr. Inside, running engineering and manufacturing organizations. They were co-presidents.
A former Chrysler executive says relations among the executives were tense, particularly between Press and Nardelli. In particular, the executive says, Nardelli resented the good publicity Press received.
Cerberus officials declined comment. Nardelli, who has left Chrysler, still works for Cerberus as an adviser.
Awkward as it was, the arrangement might have worked if Chrysler had had the time and money to revamp its product line. Cerberus pledged to do so but then backed off from product investments in the failing company.
In his first week on the job Press visited three Chrysler dealerships and promised the new Chrysler would spend more money on new products than it had under prior owner Daimler.
"We have been given the opportunity to earmark a ton of money for development of advanced products," Press wrote on a Chrysler blog that first week.
Chrysler staffers, who had been disappointed when former Chrysler COO Wolfgang Bernhard didn’t get the top job, were overjoyed.
"When he came onboard, I was ecstatic," says one former Chrysler manager. "I thought we were getting Michael Jordan. I wanted to learn from him."
After the contentious DaimlerChrysler years, dealers were happy, too. Morale soared as inventories dropped during Press’ first year. For the first time anyone could remember, Chrysler got serious about slashing dealer stock — idling five assembly plants in October 2007 and cutting unprofitable fleet sales.
Bill Wallace, owner of the former Wallace Chrysler-Jeep in Stuart, Fla., shared the excitement.
"Every Toyota dealer you knew said Jim Press is a fabulous car guy," Wallace recalls. "In the first year, he was very upbeat. He said, ‘Chrysler has been in push position. That’s a big difference from what Toyota does.’
"He said we would cut down production. Everybody loved it. He was very aggressive in a lot of the marketing strategy."
But Press and Cerberus had a short honeymoon. By spring of 2008, soaring gasoline prices began to hammer sales of Chrysler’s truck-heavy lineup.
Jim Fynes, president of Phil Long Chrysler-Jeep in Denver, a dealership Chrysler rejected in bankruptcy, says he "was really hyped up on this guy" Press.
But Fynes was shocked by a letter Press sent to dealers in June 2008.
In the letter, Press told dealers: "We know we can’t take trades on big SUVs and large pickup trucks, so let’s encourage our potential customers to sell them privately in order to get them back to buy the new vehicle. Find a different channel."
Fynes saved that letter because he thought it showed an amazingly naive view of the auto retail business. The last thing dealers want to do is encourage customers to take trade-ins elsewhere, Fynes said. "I think it’s the most appalling letter I’ve ever seen in my life."
Chrysler’s competitive position continued to deteriorate through the summer of 2008. A key blow came in August of that year, when Chrysler Financial quit financing retail leases after it was unable to renew its full line of credit with outside investors.
Soon afterward, Chrysler announced it had made an operating profit of $1.1 billion in the first half of 2008. At the time, Press criticized "false speculation" about the company’s health, adding a bit of classic bravado: "We’d like to be judged as a company on how well we do when we’re under pressure. The hardest steel comes from the hottest fire. We’re dancing on the sun."’
But Wallace says that in dealer conference calls, Press’ tone changed as circumstances became more dire.
"He was saying he really needed dealers to step up to buy more inventory," Wallace says. "There were six or eight of those calls. Each one was another level of desperation."
The man known as Mr. Pull was being forced to push.
Last fall’s collapse of financial markets sank Press’ hopes of turning Chrysler sales around with hot new products. Cerberus had approved a product plan that included a small car, a hybrid minivan and a new mid-sized car.
But as Chrysler’s cash flow worsened throughout 2008, it cut back the plan product by product until there was little left. By late 2008, Chrysler was headed for a federal bailout and bankruptcy.
Still, Press kept trying to rally dealers. Gifted with a photographic memory, he usually speaks without notes and wows audiences. In January 2009, Press brought Chrysler dealers to their feet at the National Automobile Dealers Association convention in New Orleans when he pleaded with them to help save the company.
"He was as believable as Vince Lombardi," Jeffrey Duvall of Duvall Chrysler-Dodge-Jeep in Clayton, Ga., said after the meeting. "He is the spokesman Chrysler needs."
Duvall later found his dealership on Chrysler’s rejected list.