Not so sweet in corporate suite: Car execs hit the road

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Senior auto industry executives, particularly in Detroit, are defecting to rivals or in some cases heading back after defecting-shifting loyalties to a degree virtually unheard of in the not-so-distant past.

The industry has always experienced some executive movement, "but it's never been this frenetic," said Jim Sanfilippo, exec VP at automotive consultancy AMCI. "The find-and-replace rate is moving at the speed of light," said Mr. Sanfilippo, who, until March 2000, was VP-marketing at Kia Motors America.

Mark LaNeve is the latest defector, leaving his post as president-CEO of Ford Motor Co.'s Volvo Cars of North America last week to rejoin General Motors Corp. Mr. LaNeve, who spent 16 years at GM before joining Volvo in 1997 as VP-marketing, is now general marketing manager of Cadillac Division.

He succeeds Mike O'Malley, who left GM the week of April 23 to join WPP Group's J. Walter Thompson USA, Detroit, as global business director on the Ford Motor Co. account.

According to industry buzz, Mr. O'Malley was frustrated at not having enough input at the division. Mr. O'Malley was out of the office and unavailable for comment last week.

Liz Vanzura, director of advertising at Volkswagen of America from March 1997 until late 2000, also rejoined GM. In February, the 36-year-old marketer was named ad director of GM's Hummer brand. GM is about a year away from launching its first new Hummer since acquiring rights to the name in late 1999.

When Ms. Vanzura left GM four years ago, she had been the assistant brand manager of Pontiac's entry-level Sunfire small car. "One of the nice things about Hummer is it's like a pilot division and they [GM] let us experiment and try new things," she said. Ms. Vanzura, who has two young children, said she also likes the flexibility of her new job, which allows her time to work at home and involves less international travel.

In the past, "it was taboo" for car execs to leave for a competitor, then return to their former employer, said Gordon Wangers, managing partner of AMCI.

Mike Wright left GM after 15 years last fall to join Ford as trustmark marketing manager, which includes global media buying for all Ford brands. His predecessor was Michelle Cervantez, who was promoted within Ford to VP-marketing of Jaguar Cars North America.

Ms. Cervantez' old boss at Ford, Jim Schroer, left his post as VP-global marketing in late February to join Chrysler Group as exec VP-sales and marketing. At the same time, Chrysler Group also hired George Murphy as senior VP-global brand marketing from Ford Division, where he had been general marketing manager.

The two men are part of the turnaround team at Chrysler, which dragged parent DaimlerChrysler AG into a first-quarter net loss of $2.1 billion.

The resumes of the former Ford execs are very different from their Chrysler predecessors, who were longtime industry employees. Mr. Murphy entered the auto industry in early 1999, when he joined Ford from GE Lighting; Mr. Schroer in 1996 from consultancy Booz-Allen & Hamilton.

Mr. Schroer said the biggest change at Chrysler vs. Ford is "the speed at which I can get things done," indicating a slow-moving bureaucracy at Ford. Chrysler has traditionally been leaner than Detroit's other carmakers.

While carmakers require confidentiality agreements, the defectors still have much of the insider information in their heads, including future product plans, profit margins and ad budgets, said Wes Brown, an analyst with consultancy Nextrend. As a result of the recent flurry of industry defections, "we may see a new level of corporate security," he predicted.

Mr. Sanfilippo concurs that the defectors take a body of knowledge with them to the competitors, but "they can't be as blatant as Ignacio Lopez, who left GM [in 1993] with boxes of files" when he left to join Volkswagen AG.

GM sued its former purchasing czar for corporate espionage and racketeering. Mr. Lopez later left Volkswagen. The U.S. Justice Department and a federal grand jury in Detroit indicted Mr. Lopez a year ago.

Detroit invited more job-hopping by changing the rules-and by increasingly heading outside for jobs that in the past would have gone to insiders. For decades, Detroit's car executives had to pay dues with field jobs that exposed them to the sales side of the business, and a marketing post was merely a stopover point for bigger and better jobs, Mr. Sanfilippo said. "The idea that someone could head a vehicle division without field experience or from another industry was impossible."

That started to change in the mid-1990s, when both GM and Ford moved to brand management and began hiring people, in earnest, from other industries to key marketing positions. One of the most high-profile hirings of the day was Ron Zarrella, the Bausch & Lomb Corp. president-chief operating officer who joined GM in late 1994 as VP-group executive, sales, service and marketing in North America, a job sought by insiders. Mr. Zarrella was promoted in late 1998 to president of North America division.

To be sure, high-level shifts have occurred for decades in Detroit. Semon "Bunkie" Knudsen jumped from GM exec-VP to Ford president in 1968. Lee Iacocca, ousted as Ford's president in 1978, jumped to chairman of Chrysler, bringing a gang of loyalists. But the difference now is the volume of defectors, and the number who are invited to return.

Jim Hall, VP-industry analyst at consultancy AutoPacific, sees defections as "unusual, only if you define it by the auto industry of the 1950s, '60s and '70s and '80s." The auto industry, he contends, is just catching up to other modern global businesses. He agreed with Mr. Brown that Asian automakers' U.S. operations haven't seen the same flurry of movement as Detroit's automakers. But Japanese and Korean automakers in the U.S. are populated with many veterans of GM, Ford and Chrysler. And the wheels are still turning.

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