DETROIT -- One of Chrysler LLC's top engineers left the company Tuesday because of a dispute with senior managers, a person with knowledge of the situation said Tuesday.

Mike Donoughe was leading the company's effort to develop a new generation of global midsize cars. The person said Donoughe clashed with Peter Arnell, a marketing consultant hired by Chrysler Chairman and Chief Executive Bob Nardelli. The person asked not to be named because Chrysler wasn't publicizing the reason for Donoughe's departure.

Chrysler spokesman David Barnas confirmed Donoughe left the company but wouldn't say whether he resigned or was fired.

"Chrysler denies that the departure had anything to do with a clash with management or with Peter Arnell," the company said in a statement.

Donoughe, 49, joined Chrysler in 1983 as a product development engineer for final drive and transmission systems. Before heading the midsize car team, Donoughe was vice president of body-on-frame products, including sport-utility vehicles and pickups.

Nardelli announced in January that Chrysler was starting the new midsize car development team. The team is critical to the company, which needs strong products in the highly competitive segment that includes the Toyota Camry, Chevrolet Malibu and Honda Accord. Two of Chrysler's most recent midsize entries, the Chrysler Sebring and Dodge Avenger, have been flops, and a midsize sedan that can appeal to global consumers is important to Chrysler's goal of doubling its sales outside North America by 2012.

Barnas said Mark Chernoby will replace Donoughe as vice president and chief engineer for Chrysler's midsize product team. James Issner will replace Chernoby as vice president of core components, process and international engineering. Issner will also oversee Chrysler's expanded engineering centers in China, India, Eastern Europe and Mexico.