DETROIT — In his first days as CEO of Fiat Chrysler Automobiles, Mike Manley laid out a large number of complicated tasks already on his personal to-do list: Fix FCA's money-losing operations in China, juice Maserati's flagging sales, and get the problem-plagued production of the redesigned 2019 Ram 1500 up and running at full speed as quickly as possible.
Each is vital to making sure FCA hits its restated — though still aggressive — financial targets by the end of the year. But there's one other pressing issue that also needs a place on Manley's plate: the struggling state of a large chunk of FCA's U.S. dealer network.
Many of FCA's roughly 2,475 U.S. dealers struggle to earn a profit, struggle with payments for warranty and recall work, struggle with getting the vehicles they need delivered and struggle with a mix of old product and expensive new alternatives. From a franchise value standpoint, FCA dealerships are less in demand than their domestic counterparts and trade at skimpier multiples.
Yet if FCA dealers have faith in anyone to improve their fates, it's Manley, the former dealer network guy they've known personally for the last 18 years who, in recent years, has filled their lots with Jeeps that sell.
Manley's selection as CEO "signifies that FCA will move forward and continue all the good that has been accomplished, while expanding on all that has been good," said Denny Rogers, chairman of the FCA National Dealer Council, who responded to questions from Automotive News via email.
But there is work to do, said Rogers, managing partner of Landers Dodge-Chrysler-Jeep-Ram and Landers Fiat-Alfa Romeo in Bossier City, La.
"Dealer Council has dealer profitability as the number-one discussion point in all of our meetings. In due time, when we hear from Mr. Manley, this subject will certainly be an important topic," Rogers said. "The profitability concern has many talking points — margin compression that we have been feeling for a period of time, the volume growth programs that are in play today including the Ram sales program, the numbers and corresponding payouts. And we can't overlook the impact that recalls are having on dealer profitability as they relate to our sales, service and parts operations."
Though the transition between Sergio Marchionne and Manley happened abruptly July 21, Marchionne had been openly talking about retiring from FCA for years and repeatedly said his successor would be one of the men he had trained as his top lieutenants, which included Manley.