Chrysler Makes Dealers' Day, Demotes Eberhardt

Following Heavy Criticism from Sellers, Ad Chief Takes Retail Position at Mercedes

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DETROIT ( -- For the Daimler Chrysler dealers who disliked marketing chief Joachim "Joe" Eberhardt's ad strategy, his exile to a sales lot looks a lot like karmic retribution.

Dealers were delighted when it was revealed last week that he had left his post as exec VP-sales and marketing at Chrysler Group to become a Mercedes-Benz retailer. Nor was the irony lost on them that a guy whom they felt never listened to them was now joining their ranks. His downfall, said the dealers and executives close to the matter, owed much to his unwillingness to listen or take advice from his staff, dealers or his ad agency, BBDO.

In late spring, Mr. Eberhardt, exec VP-sales and marketing of Chrysler Group, asked his boss, CEO Tom LaSorda, to be sent back to Germany, said two executives close to the matter. But Mr. LaSorda told the Stuttgart-born executive to first fix the inventory mess he had created during the past year.

But with more than 160,000 unsold cars on their lots, the dealers couldn't wait to see if Mr. Eberhardt could turn it around. They still wield a lot of clout in Detroit and eventually staged nothing short of an uprising against him. Fed up after more than a year of having too much product forced upon them, they took their complaints about the 43-year-old executive over his head to Mr. LaSorda.

Mr. LaSorda announced last week that his underling would leave Chrysler Group after three-plus years to return to retailing at sibling Mercedes-Benz USA. Apparently Mr. LaSorda, who will take temporary charge of the marketing and sales, "finally heard the chorus" of dealers clamoring to have Mr. Eberhardt removed, said Todd Turner, president of consultant CarConcepts. The automaker continued to build too many vehicles and the wrong mix of product for too long, he said.

Part of Mr. Eberhardt's job was to order cars and trucks and it was up to Frank Ewasyshyn, exec VP-production, to build them, said Jason Vines, VP-communications at the carmaker. Mr. Eberhardt opted to leave Chrysler, said Mr. Vines, who confirmed Mr. Eberhardt will return to retailing at Benz. He also said he didn't know whether Mr. Eberhardt asked to be reassigned to Germany. Mr. Vines said he did not know whether Mr. Eberhardt would be replaced or when.

Mr. Eberhardt through a spokesman declined to comment.

Chrysler, Jeep and Dodge dealers had 164,000 unsold 2006 models at the end of November, or 32% of total inventory, the automaker said.

At this time of year, outgoing-model-year vehicles should be closer to 10%, said Alex Rosten, industry analyst at auto-info site Chrysler Group's incentives reached their highest in at least five years in November at $4,112 a vehicle, he said. December deals will certainly be higher, he added.

They already are. The automaker offered a carrot to dealers this month-up to $7,000 in so-called dealer cash. Retailers can decide how to use the money to clear out 2006 models via rebates or over-appraisals on trade-ins, said one dealer.

For Mr. Eberhardt's successor, dealers most often cited Gary Dilts, who retired and left the automaker in June as senior VP-U.S. sales after spending his entire career at the carmaker. Mr. Dilts disagreed with Mr. Eberhardt's methods, people close to the automaker said.

Mr. Eberhardt earned kudos after his arrival in 2003 for removing singer Celine Dion from Chrysler brand ads and having BBDO Detroit, Troy, Mich., put more emphasis on the vehicles. But by 2006 dealers were no longer happy with the work he'd ordered, including last summer's "Ask Dr. Z" campaign.

Industry watchers wondered whether former Chrysler Group Marketing Director Julie Roehm, who was pushed out of Wal-Mart last week, might return to the automaker. Ms. Roehm in 2004 said she aspired to Mr. Eberhardt's job. "Of all the purest coincidences in the world, that is the purest," Mr. Vines said.
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