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Diaz Defection Good News for Nissan, But Big Trouble for Chrysler

Are further defections facing Chrysler’s overworked management team?

by on Apr.15, 2013

Fred Diaz is shown here during the recent launch of the new Ram 1500 pickup.

Chrysler is scrambling to fill a big hole left in its senior management ranks following the unexpected defection of Fred Diaz, who had been running its fast-growing Ram truck brand. A 24-year Chrysler veteran, Diaz now becomes the new head of sales and marketing for the Nissan Brand in the U.S.

Considered one of the most influential Hispanic business leaders in the U.S., Diaz was one of a small cadre of close confidantes to Chrysler CEO Sergio Marchionne and helped the Ram brand generate a steady stream of month-over-month sales gains that outpaced the overall U.S. automotive recovery.

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Nissan now hopes that magic can rub off as it sets its sights on achieving a record 10% share of the U.S. market. The Japanese maker also hopes Diaz can help it finally pick up some traction in the light truck market when it launches an all-new version of the Titan pickup a little more than a year from now.

Diaz replaces Al Castignetti, former Nissan sales chief, who has left the Japanese maker after 15 years. The former Chrysler exec also takes on some new duties, and will have “”full responsibility for the day-to-day operations of the Nissan Division in the United States, including all sales, marketing, fixed operations, parts and service, and administration functions,” according to Nissan.

Though he’d had a good track record of his own, Nissan apparently wanted to find a replacement for Castignetti who could, said a well-placed source, “take things up to a different level.”

The maker had a notably tougher year than it anticipated in 2012, the all-new Altima, in particular, failing to deliver the sort of sales momentum that had been confidently forecast by Nissan’s global CEO Carlos Ghosn.

In retrospect, Ghosn offered several hints that change was in the works during a news conference at the New York Auto Show last month. He stressed that the current pace of U.S. sales wasn’t enough to justify the hefty investments Nissan has been making in the market, stressing that it was essential to hit the 10% share target.

“Fred Diaz is one of the most experienced, results-driven sales and marketing executives in our industry, and we are privileged to welcome him to Nissan,” said Jose Muñoz, the maker’s sales chief for North and South America, and Diaz’s new boss. “As Nissan Division continues to grow in the United States, we expect Fred to convey a fresh perspective to our dealers and the entire divisional operations team that he will now lead,” he said.

In his new post, Diaz will oversee a line-up filled with relatively new products – and with still more on the way.  But he’ll still face some challenges.  One of the most critical will be building momentum for the Nissan Leaf. The battery-electric vehicle had its best-ever month in March but sales are still lagging behind company expectations – after missing internal targets in both 2011 and 2012.

Then there’s the Titan.  Nissan was confident it could take on the long-dominant Detroit Big Three when it launched the big pickup a decade ago, but the Titan has barely put a dent in the market leaving Nissan scrambling for a solution.  It briefly considered partnering with Chrysler to market a full-size truck based on the more popular Ram 1500, but that plan was scuttled, ironically, when Fiat took control of the U.S. maker after its 2009 bankruptcy.

A completely new version of the Nissan Titan, developed entirely in-house, is expected for the 2015 model-year. That means it will launch about the same time as the next-generation Ford F-Series, adding further to the challenges facing Diaz in his new job.

But he can count on having learned some critical lessons during the recent introduction of the new Ram 1500 which was named North American Truck of the Year in January.

Spun off from the Dodge brand, Ram now markets a selection of pickups that have been gaining traction as the U.S. economy has slowly recovered. Ram sales were up 20% in 2012 and have gained 15% for the first three months of this year.

That positioned Diaz as “one of the powerbrokers” at Chrysler, according to a well-placed source close to CEO Marchionne.  The San Antonio-born executive was one of a handful of Chrysler veterans to remain in the upper ranks after Fiat took control of Chrysler – and he is the first to leave for a job with the competition.

But insiders caution he may not be the last. They note that while Chrysler has, on the whole, outpaced the U.S. automotive upturn – with three consecutive years of month-over-month sales gains – that has come at a steep price. “We’re all working seven days a week.  We don’t have much of a life outside Auburn Hills,” said one of Marchionne’s inner circle, referring to Chrysler’s suburban Detroit headquarters.

That could make it more attractive to some senior executives should offers like the one Diaz got from Nissan come along.

Chrysler has yet to name a replacement for the Ram boss.

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3 Responses to “Diaz Defection Good News for Nissan, But Big Trouble for Chrysler”

  1. Jorge M. says:

    Nissan faces an uphill battle in the U.S. with their product line, IMO.

    I don’t know that Diaz has any marketing magic. The new Dodge trucks appear to be best in class with slightly improved styling so it’s no surprise that they are selling well. It’s possible that Diaz left because he see Marchionne transitioning Chrysler into Fiat U.S. with Chrysler model badges on Fiat chassis?

  2. dwight mannsburden says:

    I wonder if he’ll focus on the minuscule market share of the Titan first.

  3. heyfred3000 says:

    Jorge M. is correct. Nissan’s not-quite-ready for prime time CVT is unimpressive across the board in a test drive, and car magazines have reflected that. Failing to offer the Qashqai+2 (Rogue in the US), a big hit in europe for 4 years, has left them with no 7 seat SUV except the Pathfinder (too “truck-y”). The Versa is a roomy, slightly quirky, car that is SO underbuilt in every sphere except those two, that it’s a wonder it sells any at all if people test drive them. If they can’t cure basic product issues, advertising will be just wasted money.