The truly puzzling life of Chrysler's deputy CEO
How could a millionaire top executive with a chrome-plated reputation get in such financial trouble? The mysterious case of Jim Press.
DETROIT (Fortune) -- When the news broke recently that Jim Press, the deputy CEO of Chrysler, is being hounded by creditors and the IRS for an array of debts, it presented a puzzle. How could an executive who worked at the top of the auto industry for decades get into such financial difficulty? And what turmoil was going on in the personal life of Press, who had been renowned in the industry for his Kansas-bred calm and quiet charm?
The answers appear to lie in two dramatic changes in his life, in which he abruptly left both his wife and his longtime employer for new situations. In 2006, the father of four startled colleagues when he appeared at a Florida car-dealer event with a new girlfriend, attendees told Fortune. The following week, his wife filed for divorce in Los Angeles.
The next year, the remarried executive jumped from his post as president of Toyota's North American unit, where he had worked for 37 years, to become one of the top three executives of Chrysler after its takeover by Cerberus Capital Management, the private-equity firm.
The first move may have contributed to the second, and both have proved to be costly. Even amid the financial mayhem the industry has suffered, the difficulties enmeshing Press stand out as the downfall of a revered industry figure, one who had particular credibility with car dealers. "He was an extremely effective leader," said Craig Zinn, a Toyota and Lexus dealer in Miami. "We miss him."
In his personal finances, Press had stretched himself thin, supporting four homes around the U.S., not long before the economic crisis hit. When his expected compensation fell, Press started missing payments. As first reported in the Detroit Free Press and Detroit News, Press is facing lawsuits and government liens totaling more than $1.4 million. (Press declined to comment for this story.)
California-based Western Federal Credit Union is suing him in Michigan Circuit Court, alleging that he defaulted on an $816,000 loan. The debt had started with an unsecured personal loan at the Toyota Federal Credit Union, which merged with Western Federal in 2007 and stopped making such loans.
Press had agreed to repay the loan in four installments, but ran short on cash. For that, he blamed Chrysler's dropping of bonuses late last year as it sought federal assistance, writing the credit union on Nov. 11, 2008: "Due to the turmoil in the automobile industry and uncertainty surrounding our ownership, my request for bonus payment was denied. I am attempting to arrange for a loan against my future bonus with my employer, which would allow me to pay this loan off."
He added: "You don't have to worry about my ability to pay, it's just a cash flow issue at this time. My employment is not in jeopardy, and I still have monthly income to service the note." Since December, the U.S. Treasury has loaned Chrysler more than $15 billion to keep it afloat and merge it with Fiat.
Another arm of the government, the IRS, has placed a lien of nearly $950,000 on the 6,800-square-foot home that Press and his current wife own in suburban Birmingham, Mich., for which he took out a $2.2 million mortgage last May, because of unpaid 2007 taxes, according to court filings. The couple has put the house on the market for $3.15 million, but sales prospects in the Detroit real-estate market are bleak.
Press has at least three other homes: a $2 million residence in Los Angeles, a $470,000 condo in New Orleans, and a townhouse on Manhattan's Upper East Side that he put on the market this year for $15.7 million. Just three months after he joined Chrysler, an arm of Cerberus gave Press and his wife a mortgage of $12.96 million to buy the townhouse, for which they paid $13.5 million, records show.
At Toyota, Press was renowned for his devotion to the company and his profound work ethic, says Bob Page, a close friend of Press' and the owner of a Toyota dealership in Southfield, Mich. Press, known for his long workdays, chafed at colleagues who didn't appear to put in the hours. "Most everybody enjoyed working with him, but if you wanted to go nine-to-five, you probably weren't high on his list," he said.
Business was motoring along relatively well in the car industry in 2006 when Press, now 62, started dating Suwichada Busamrong, a Thai native and the mother of two small children. Press took Busamrong to a Lexus dealer event on June 4-7 at the Ritz-Carlton hotel in Naples, Fla., according to Yanay Weaver, a manager for the Lexus southern region.
The following week, on June 14, Press' wife Linda filed for divorce in Los Angeles Superior Court, records show. (Her divorce attorney did not return calls for comment.) Peter Blackstock, a Lexus dealer in Seaside, Calif., said he first met Busamrong at the Naples meeting. "[Press] took me aside and said 'I'd like you to meet my friend.' I knew they weren't married, especially the way he introduced her. I know a lot of people there were surprised."
Colleagues who met Busamrong describe her as attractive and in her 30s. Lexus dealer Zinn, who talked with Busamrong at the Naples event, said she struck him as "haute couture to the max, Chanel or Dior." In January of this year, she enrolled as an interior-design student at Detroit's College for Creative Studies.
While it's unclear whether the change in Press' personal life affected his career at straight-laced Toyota (TM), notice was taken that Press was a more complicated person than previously assumed. A high-level Toyota executive who attended a dinner at the Toyota Technological Institute in Chicago in October 2006 said Press introduced Busamrong as his wife. She wore engagement and wedding rings, he recalls.
"It was an uncomfortable evening," he said. "Eyebrows were raised. People were aghast." And while Press was a hero to dealers, he may have had difficulty managing up. The Toyota source said Press was "hard to read," someone who "had difficult relations with the people he reported to."
Around that time, Press, who had long been based in Los Angeles, moved to Toyota's New York office, which didn't please him. His golden career at Toyota, where he was the first American appointed to Toyota Motor Corp.'s board, seemed to be reaching its limits.
"I think he felt like he was being pigeon-holed in New York," says his longtime friend Page. "He said he didn't want to be put on a back burner." The executive's dimming prospects at Toyota and his widening financial commitments seemed to inspire the leap to Chrysler. "He saw an opportunity to help Chrysler, and be taken care of financially," says Page, "Except now, he can't sell his properties. He's caught in an economic squeeze."
Court records show that Press pays his former wife $40,000 a month in spousal support and $16,000 a month in child support. The court documents put the executive's Chrysler salary at $2.4 million annually, plus a $3 million signing bonus. His overall compensation package when he went to Chrysler was reported as high as $50 million, but the value of any equity stake in Chrysler has plummeted after the automaker's trip through bankruptcy. Chrysler spokeswoman Shawn Morgan said the company doesn't comment on "private matters."
Press was one of the few top executives who was carried over after the merger with Fiat, but he reportedly will leave Chrysler by year's end, as new chief executive Sergio Marchionne reworks his team. It was considered a real coup when Chrysler lured him from Toyota, but the luster faded early this year when Press pointedly urged Chrysler dealers to accept more vehicles, even though they were overrun already. Later, when hundreds of Chrysler dealers were dropped by the automaker, they were left with vast quantities of unsold inventory.
In a visit with Fortune editors after his move to Chrysler, Press wore a tattered string on his wrist, a symbol of his values that contrasted with his crisp business suit. "It reminds you that in life, you just need enough to get along," he explained to the New York Times last year. In his next chapter, his current challenges will put that philosophy to a real road test.