American Express Co. has another rising star in its ranks.
The New York-based card giant has promoted James M. Cracchiolo, a 16- year veteran, to president of Global Network Services. The newly formed business unit focuses on alliances with banks and other companies that want to offer American Express cards.
Mr. Cracchiolo, 38, who has had a relatively low profile, has been in charge of the company's alliances since last May. At that time, chief executive officer Harvey Golub invited banks at an industry conference to form partnerships with American Express and issue its cards.
In fact, for the past three years, Mr. Cracchiolo has played a key role in evaluating the company's core businesses and developing strategy as senior vice president of travel-related services quality, reengineering, and business strategy.
In a memo to American Express employees on Feb. 26, Kenneth I. Chenault, president of the company, said that under Mr. Cracchiolo's leadership "we are on track to successfully achieve our overall cost savings targets, reconfigure our operating environment, and build critical core capabilities, allowing us to reinvest funds to build market share."
"These leadership characteristics will be invaluable in building the network services business," said Mr. Chenault.
"This has been a huge piece of the company's strategy since May," said Sanford C. Bernstein analyst Moshe Orenbuch. "If anything (the business unit) is long overdue."
Mr. Cracchiolo's appointment follows on the heels of Mr. Chenault's promotion to president of American Express last week. Mr. Golub said Mr. Chenault is the strongest internal candidate to succeed him in seven years when he plans to retire.
Mr. Chenault and Mr. Cracchiolo have worked closely together since 1993 as the architects of American Express' so-called network and franchise strategies, which so far have been most successful abroad.
There are about 16 such deals with banks and other companies internationally. It has been more difficult to forge these alliances in the United States where Visa and MasterCard rules prevent banks from issuing American Express cards.
A Justice Department investigation focusing on those rules could help American Express if the government sues the bank card associations.
Mr. Cracchiolo said that despite American Express' limited opportunities here "we have a large opportunity as it stands today" to build partnerships. "We are concentrating very hard outside the United States," he said.
Before his reengineering work, Mr. Cracchiolo was executive vice president and chief financial officer of Shearson Lehman Brothers, which was sold to Smith Barney in 1993.
Mr. Cracchiolo was also chief financial officer of American Express Centurion Bank and general manager of the travel and entertainment business. He joined American Express in 1982, while completing a Master's degree in Business Administration at night from New York University.
Mr. Cracchiolo reports to Thomas Ryder, president of American Express International.