In May this year, Fiat Chrysler Australia started legal proceedings against a former CEO, Clyde Campbell, for alleged misappropriation of funds. While no doubt many of you have read the story on more business-related publications, here is a take from our perspective.
To start with, I must point out we made a decision not to cover the FCA v Campbell case from a news point-of-view until the matter resolves in the courts. This was a considered decision as, here at CarAdvice, we are all about advice for new car buyers and rarely do we cover (or intend to cover) something such as a local court case.
Of course, this led to accusations from some readers that we were covering up for Mr Campbell. That we are on the take. I am not entirely sure who is apparently paying us to not cover the story, but if they are, they are sending the cheques to the wrong address.
While the allegations against Campbell (which total to about $30 million) remain a battle in court, it’s important to keep some perspective without falling for the juicy details that have come out in the business media.
Clyde Campbell started working for Chrysler in 2010, a time when Fiat Chrysler was not even a real entity. It was a time when Jeep, as Chrysler Australia’s most popular brand, was lucky to convince 8000 Australians to purchase one of their cars annually. In 2014, Jeep sold 30,408.
Of course, it’s a foolish man who thinks this was entirely Clyde’s doing. The brand picked up its act with good product, excellent marketing (“we are going to need a bigger boat” – “you bought a Jeep?”) and the Australian dollar was on parity or higher, which helped the company slash prices (and margins) to grab market share. So much so that the Jeep Grand Cherokee became the best selling large SUV in Australia last year.
But how someone could allegedly become so ignorant (or is it arrogant?) to think he could get away with things that were not only ludicrous (even by car company standards) but down right ridiculous (like the alleged luxury boat, which was purchased under the proviso of being a “floating advertising billboard”), is one for the criminal psychologists. That, of course, is if it’s proven to be true.
Having met, and spent a reasonable amount of time with Campbell (and his successor, Veronica Johns) on multiple occasions, I have to admit, I kind of liked the guy. Most people did. A personable man of great intelligence whose company one could instantly enjoy.
You don’t get to become the CEO of a car company if you haven’t got some redeeming qualities (and it seems that having a history which involves being involved in car theft is also not an issue). In fact, Australian car company CEOs (with the exception of a few that shall remain nameless) are generally so interesting that we are starting a whole new section on CarAdvice dedicated just to them (more on that very soon). But even so, Campbell was always different to the rest.
Peculiarly a vegetarian – given his stature and general gravitas – Campbell came across as the smartest man in any given room. His business practice and approach to getting shit done was a massive breath of fresh air, and he would pretty much give you a straight answer to anything you asked, on or off the record (though, considering the allegations against him, one could question that).
From a business perspective he helped put not only Jeep, but Fiat and Alfa Romeo, on the Australian automotive landscape. Fiat Chrysler Australia took over distributorship of Fiat and Alfa Romeo from Ateco automotive in 2012 and cut prices substantially. At one stage, a manual Fiat 500 was $14,000 driveaway – an enormous price cut from what it was before and a genuine bargain (and no longer the offered price).
While this was happening and Jeep sales were going crazy, Clyde Campbell became a mini superhero so far as car company CEOs went. At the time, it appeared that every decision he made was good for the company.
Well… at least that’s how it seemed. In reality the situation was somewhat different. The merger of Daimler-Chrysler years before had been a disaster, Chrysler had lost almost a third of its global workforce, was sold to Cerberus and was then coupled to Italian giant Fiat. A bit of a madhouse looking for order. Campbell had signed up to the top job before Fiat had even come to the picture.
The American government was propping up the car makers, including Chrysler, to the tune of billions and for once, another country’s tax payers were paying for something benefiting Australians. Yep, it’s true. The price of a Jeep Grand Cherokee or a Fiat 500 was low enough to not make sense from a long-term business perspective, it became a land grab where market share was the name of the game, and the customer benefitted (at least initially).
Other car company CEOs would say off the record that Jeep’s business practice was unsustainable long term, leading some to dismiss their claims and then accuse them of price gouging. Guess they are smiling now.
Of course as things began to unravel, Jeep starting facing problems. While the marketing and product was good (and still is, in part) and buyers kept coming in, parts became an issue due to the short-sightedness of the then executive team, which now appear were solely focused on short term gain (and — allegedly — glory).
Meanwhile, between the crazy growth and the madhouse in Detroit, it’s alleged Campbell signed deals benefiting his friends and partner to the tune of millions of dollars.
When you look back at it now, the signs of excessive expenditure were always there. The most prominent of which were the annually held and very outlandish Christmas parties for a ridiculous number of people from Fiat Chrysler and a small number of representatives from automotive media companies (including CarAdvice).
These are alleged to have cost the company millions of dollars and staff (not the media, I should add) were allegedly given lavish gifts including Louis Vuitton hand bags.
Numerous celebrities have been caught up in this too, such as soccer star Harry Kewell who was allegedly on a million dollar a year ‘ambassador’ payment (plus flights, kids school fees etc) to help promote Jeep.
While that sounds outrageously disproportionate, it’s hardly Kewell’s fault. As if he was going to say no to that to show up a few times a year wearing a Jeep shirt? The question there is, how did giving that money to Harry Kewell to promote Jeep benefit Campbell? Did he just like hanging out with B-Grade celebrities? More importantly, how do you sign a million dollar a year deal without someone else noticing?
From my perspective, no one questioned it (or if they did, they were out the door) because those that worked at Fiat Chrysler Australia were by far the happiest people you’d deal with in the industry. It was a car company that seemed as though it was loved internally (and plenty of that was for Campbell). Of course, you could argue that when funds are being (allegedly) misappropriated, it’s easy to keep staff happy and that’s a very valid argument.
When a Fairfax business analyst broke the story many weeks ago now, the automotive media were shocked. It’s fair to say not one of us saw that coming to such a degree (if you read otherwise, it’s a lie). So much so that some journalists didn’t even believe it at first, missing the ‘exclusive’ punch line they may have otherwise had.
Clyde Campbell? ‘Surely not Clyde?’ Yep, it was Clyde. It’s hard to fathom a CEO of such a prominent car company being able to sign large deals without some form of higher up approval, yet, that’s exactly what is alleged.
In hindsight, Fiat Chrysler’s largesse across numerous areas seems notable now.
The full story of Clyde Campbell is only just starting. There are so many unanswered questions that the whole saga doesn’t seem to make sense. Then again, fact is always stranger than fiction and greed has for long been the undoing of even the greats.
So, where does it go now? The court case begins in the Victorian legal system this week and it is expected to be a relatively lengthy trial. Other former Fiat Chrysler executives are likely to get involved to further complicate matters.
It’s unlikely that this will end any time soon, which also means… we will not be covering it, at least until someone is proven either innocent or guilty. In the meantime, we are definitely going to need a bigger boat.