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FCA reeling after failed tie-up, suit by Bigland

DETROIT — FCA US sales chief Reid Bigland started last week by reviewing above-average May results on a routine monthly conference call with the national dealer council, as the company's employees and retailers awaited word that a merger with Renault would soon make them part of the world's third-largest automaker.

Two days later, Bigland and Fiat Chrysler Automobiles had become embroiled in an unusually public dispute over his role in sales practices that are under federal investigation, and FCA abruptly pulled its $35 billion merger proposal off the table. Just when it seemed as though the path forward for FCA finally had become clear, clouds of considerable uncertainty returned in mere hours.

FCA blamed its merger reticence on the lack of support from the French government, and the French side of what many thought was essentially a done deal blamed a lack of endorsement by Renault's partner, Nissan Motor Co. Some questioned why FCA Chairman John Elkann was so quick to bail on the plan, proposed just a week earlier, in the face of obstacles that were largely predictable going in.

Meanwhile, Bigland is pointing fingers directly at other top FCA executives with a whistleblower lawsuit saying the automaker had made him a scapegoat and unfairly withheld 90 percent of his pay. Yet dealers said he has continued to conduct business as usual.

One member of the dealer council said Bigland's June 3 call reviewing FCA's 2.1 percent sales gain and laying out plans for the month ahead was "absolutely normal."Bigland also is featured on a webcast posted the same day in an online portal for FCA's full retail body.

Then on Wednesday, June 5, Bigland filed his lawsuit, which said FCA had chosen to indefinitely "defer" his 2018 annual bonus and payout of shares in March in retaliation for his cooperation with a U.S. Securities and Exchange Commission investigation. The suit also says FCA was trying to get back at Bigland for selling his shares in the company last year.

It was unclear how long Bigland could stick around amid the controversy, but in the immediate aftermath of his lawsuit, he was still doing dealer outreach. FCA said he was expected to attend a dealer council gathering this week in Detroit.

"He's still running the show," said one dealer who spoke on condition of anonymity.

While the development creates juicy headlines, dealers have bigger worries. Whether FCA retaliated against Bigland isn't nearly as important to them as other issues they face, including the aborted Renault merger and hitting sales goals in a slowing market.

"There was a time before the bankruptcies where I'd be really worried about it," the anonymous dealer said.

"But it just seems like we live in a world that is very chaotic. And this stuff is like, 'Oh, well, OK. We have a lot of cars to sell.' This is a matter [between] one person and FCA that will get worked out."

Steven Wolf, dealer principal at Helfman Dodge-Chrysler-Jeep-Ram in Houston, said he attended a meeting with Bigland about three weeks ago at an awards event for top dealers.

He was caught off guard by the lawsuit but wasn't dwelling on it. He has cars and trucks to sell.

"What goes on in Detroit can be a distraction," Wolf said. "It's one of those things you read and go, 'Wow,' then you move on to the next issue."

Some dealers said Bigland, described as tough but fair, has been an effective leader and that they hoped the company wouldn't lose him.

Bigland, a member of FCA's 19-person Group Executive Council, has had full responsibility for the automaker's U.S. sales strategy, dealer relations and operations, order facilitation, incentives, and fleet and field operations since June 2011.

He also is head of the all-important Ram truck brand, as well as CEO of FCA Canada, a position he assumed in July 2006. He previously oversaw Alfa Romeo, Dodge and Maserati.

David Kelleher, who owns David Dodge-Chrysler-Jeep-Ram in Glen Mills, Pa., said Bigland has been known to challenge dealers and produce results.

Kelleher said Bigland isn't keen on small talk and socializing. He just wants to sell cars, Kelleher said. "Those guys are rare to find. That's a pretty good guy to have."

The lawsuit hasn't hurt Kelleher's confidence in the company.

"Whatever this is about, I hope it comes to a successful conclusion because losing Reid Bigland in any way, shape or form would be a loss for FCA," said Kelleher, a member of the dealer council who has worked with Bigland.

Wes Lutz, who owns Extreme Dodge-Chrysler-Jeep-Ram in Jackson, Mich., said the sales reporting practices at the heart of the lawsuit and investigation weren't worth the hassle. FCA originally posted 75 consecutive months of year-over-year sales gains before changing its methodology and admitting in 2016 that the streak had actually ended three years earlier.

According to his lawsuit, Bigland told the SEC that FCA's monthly sales reporting was immaterial to investors and that the numbers were a tool to "motivate and build confidence amongst the salesforce and dealers in the wake of the company's bankruptcy."

But Lutz, who said he's only concerned with his store's performance, doesn't think the company gained anything by pushing the narrative of a six-year streak.

"Nobody cares! I'm a freakin' Chrysler dealer; I don't care," Lutz said. "What are they lying about? Why would you even keep track of that?"

Lutz called Bigland a straight shooter, saying, "He's going to tell you how it is," even if it's not good news for dealers. Although the lawsuit came as a shock, Lutz said, "It doesn't surprise me that if he doesn't like something, he'll say something."

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