Jim Press saga: A hero falls, hard

In June, after Fiat had taken control of Chrysler, the new owners sent Jim Press to Washington to defend Chrysler's quick, harsh closing of 789 dealerships.

Press had often been Chrysler's public face, but this was an especially tough assignment. Privately, he had opposed both the scope and terms of the dealership closings. He argued that fewer stores would mean fewer sales.

Nevertheless, Press went before a congressional subcommittee, telling hostile legislators that the store closings were "absolutely necessary" to ensure Chrysler's viability coming out of Chapter 11 reorganization.

Soon after Press returned to Detroit, a highly placed Chrysler source says, he was fired. Press, who declined requests to be interviewed, is expected to leave the company by year end.

That rocky ending was illustrative of Press' troubled tenure of running sales and marketing at Chrysler. In just two years, Press, 63, lost much of the glowing reputation that he earned in 37 years with Toyota.

Fiat CEO Sergio Marchionne is installing his own team at Chrysler. After being harangued by Press to order more cars, many dealers now bristle at the mention of his name. And personal financial problems brought him embarrassing headlines.

It's a stunning change from September 2007, when Press' arrival gave instant credibility to Cerberus Capital Management's rescue plan for Chrysler. Cerberus chief Stephen Feinberg wanted to save the "American icon" he now controlled. And Press, who had helped build Toyota into a North American juggernaut, was a trophy hire.

Press appeared to be made for the job, with a self-effacing public manner that seemed to mix his Kansas boyhood and Toyota's Japanese culture. He was known as a master of sales and dealer relations. Toyota dealers, many of whom grew rich under his watch, rave about him to this day.

From the start, Press made it clear he wanted no part of the Detroit 3's traditional "push" model -- making too many cars, then moving them with heavy incentives and fleet sales. "Why build cars for practice?" he quipped at a press briefing soon after he arrived.

At Toyota, Press had been promoted to a nonoperational job as head of Toyota Motor North America in New York. In his Chrysler job, the man who once said, "I was in love with cars every second" was happy to be back in the thick of the action. He would be doing what he loved most: moving the metal, as co-president of one of the Detroit 3.

By some accounts, the seeds of Press' demise were sown 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.

Soon after the NADA gathering, Press went too far in pushing dealers to order vehicles. Pleading with dealers on a Feb. 5 conference call, he said: "You have two choices. You can either help us or burn us all down."

Press said dealers who didn't buy cars had "better hope we fail."

"If you decide not to do that," he added, "we've got a good memory of who helped this company make it."

Wallace recalls dealers calling each other afterward to confirm they had heard Press correctly. "That sent shivers up the backs of a lot of Chrysler dealers," he says.

Press apologized, but the damage was done. Many dealers took his comments as a threat. And those who bought the cars they didn't need and then found their stores terminated by Chrysler on May 14 never forgave Press.

Nicholas Parks of Rogers Dodge in Alvin, Texas, a rejected dealership, says the Feb. 5 comments permanently changed his opinion of the man: "The way dealers lost trust in Jim Press, they just all lost it at once."

With his stooped shoulders and sometimes whispery voice, Press presents himself as a humble man. To some people in Toyota, he was known as "the preacher," according to a former colleague. He often thanks journalists and analysts for their "interest in our little car company."

The aw-shucks style was a breath of fresh air in Detroit, used to brassy executives with big egos. But Press was a complex figure, not the same man behind closed doors that he was in public. Press had little patience for Chrysler traditions, his associates say.

Says the former Chrysler manager: "His demeanor was kind of arrogant. I didn't expect some of the personality traits. There were times he made the staff feel like absolute idiots."

Toyota associates describe him as an enigma. The humble exterior was the outer face of a hard-driving, competitive executive — and "one of the five smartest people in the industry," in one former colleague's words. But they also say he tended to claim credit for projects he initially opposed.

The sources also shed light on Press' departure from Toyota, where he had become the first non-Japanese to sit on the corporate board of directors. In 2006, Toyota transferred Press from California to New York, installing him as COO of Toyota Motor North America. The move came after Press divorced his wife of several decades and married a younger woman.

One Toyota source says the divorce "really bothered the Japanese" and made Press unpopular in the tightly knit culture at Toyota Motor Sales U.S.A. in Torrance, Calif.

"The Toyota family wants everyone to get along, and that includes the wives," the source says. "The wives all know each other."

As the public voice of Chrysler in U.S. Bankruptcy Court and Congress, Press became a lightning rod for perceived injustices of Chrysler's "quick rinse" bankruptcy this spring. The executive who had come in as a dealer champion became the public face of Chrysler's abrupt move to close 789 dealerships.

Dealer Chuck Eddy, Chrysler's NADA representative, gets angry hearing dealers blame Press. He believes that the federal government pressured Chrysler to cut stores -- an assertion that one White House official rejects as "completely untrue."

Eddy, a participant in talks involving Chrysler, NADA and the Obama administration's auto task force, recalls that Chrysler's Feb. 17 viability plan did not call for dealer cuts. Eddy says Press did not want to cut dealers and preferred to let the company's Project Genesis consolidation program reduce the dealer body. Others, including another dealer source, also say Press opposed cuts.

A Chrysler spokesman said he was not aware of whether Press argued against the cuts internally.

Eddy insists it was the administration that pushed hard for the cuts. Eddy says NADA representatives met with Obama task force officials on May 14, the day Chrysler announced the cuts to 789 dealers. Eddy, who is co-owner of Bob & Chuck Eddy Chrysler-Dodge-Jeep in Austintown, Ohio, says Press agonized over the closings.

"It's awful what certain dealers have said about him," Eddy says. "He was the messenger. He was the guy who didn't want to cut dealers.

"He anguished over it. We would go to one meeting and another meeting and, honest to goodness, I watched the man age. He was carrying the burden. Jim just shook his head. He said, 'These are the darkest days of my life.'"

Embarrassing headlines in Detroit revealed personal financial darkness, too. Press owes about $1 million in back income taxes to the IRS, and his credit union is suing him for defaulting on a $609,000 loan. He owns four properties and pays his ex-wife Linda $40,000 in alimony and $16,000 a month in child support per month, according to court records.

Mickey Anderson, president of the Omaha, Neb.-based Performance Automotive Group dealerships and a Chrysler National Dealer Council member, defends Press passionately. Anderson calls Press "a hero" and "a genius."

"He had us on the right path, but the company ran out of cash," Anderson says. "When we burned cash, we went bankrupt. You look at the quality of that Ram truck. I am sickened that he won't be with the company any more."

But many Chrysler dealers, who once saw Press as a savior, believe he betrayed them. The congressional testimony particularly irks them.

Steve Weinberg, owner of Weinberg Dodge, a rejected dealership in Grandview, Mo., says his dealership bought cars whenever Press asked.

"It's unbelievable," Weinberg says. "We gave them our help, and look what they did to us."

To Wallace, the contrast between Press' congressional testimony and his earlier pleas to dealers to save the company was jarring: "He was saying, 'We need you. We've got to have you. You're our only salvation.'

"Three months later in front of Congress, he's saying the dealers are a liability. He was the voice of a desperate company."

Today Press is no longer the voice of Chrysler. He works in a small office at Chrysler headquarters with no direct reports and no company responsibilities, trying to repair his personal finances and find a job.

Chrysler's one-time savior is out of action. 

Neil Roland contributed to this report