5 Questions for Chrysler's CEO Sergio Marchionne
The man tasked with reviving the automaker talks about how he plans to bring it back from the brink of extinction
Witten by Kirk Bell, MSN Autos.
The Chrysler Group didn’t have a press conference during the North American International Auto Show in Detroit this week, but the embattled automaker did make a statement with the sheet metal it brought to the show: “We are leaner and our brands are more defined, so don’t count us out yet."
And that mantra seemed to come directly from Chrysler’s new parent company, Fiat, which made its presence felt as well. In fact, the Italians brought sheet metal from almost all of the brands under its umbrella, including the spectacular Ferrari 599XX and a pair of cheeky Fiat 500s. By including these brands alongside Chrysler nameplates such as Dodge, Ram and Jeep, Fiat seems to be making a bold corporate statement about brand integration, as opposed to simply showing off nuts and bolts as most manufacturers did.
On the show floor, Chrysler, Dodge and Jeep vehicles were intermixed with Ferraris, Fiats, Maseratis and a Lancia Delta wrapped in a Chrysler bow. Chrysler also made Fiat and Chrysler Group LLC CEO Sergio Marchionne available to journalists. Marchionne is tasked with turning around the embattled automaker. Of course, he does have some experience in turning around struggling companies, having done just that at Fiat earlier this decade.
This morning we sat down with Marchionne, and the following is some of what he had to say about Chrysler’s future.
MSN AUTOS: You’ve said that turning around Fiat was tougher than Chrysler. Please explain.
Sergio Marchionne: First of all, Fiat is much bigger than Chrysler. Just in terms of the scope of operations … it was a lot more complicated. And secondly, I didn’t have the United States Treasury to cut me a check to try and keep me in business. It was me and Don Quixote, Sancho Panza and the windmills. At the end of the day, the collection of efforts that went on at Fiat were just -- well, I can’t even begin to describe it.
SM: We know the issues in connection with the cars. There’s nothing wrong with the 300 as a vehicle. Before we malign the vehicle, the car is viable. We need to reposition it … until the new car comes out at the end of this year. [Editor’s note: A Fiat-based midsize car is due from Chrysler by the end of 2010.]
We recognize the problems of the Sebring. We know that it’s not the most loved car by car enthusiasts. The aspirations for the Sebring, until we actually deliver the new architecture, which is going to be this year, and effectively relaunch our D-segment presence, it’s going to be a difficult year. … The second half is going to benefit from all the product launches … I gotta be able to get to next Christmas. When we went into bankruptcy, it’s not as if the bankruptcy judge gave us 13 new architectures and six new models. He didn’t. He gave us what the old car company had.
Our attempt now is to use this period of time to rebuild the connection back to the customer … The [new] advertising is designed to reconnect these brands to the marketplace, back to the customer. This is all going on while we’re rebuilding the architectures to drive the vehicles.
It’s not a miracle. It’s going to be a tough year. We told everybody on Nov. 4, I’m confirming it today, that 2010 for us is a difficult transition year. But at least our strategy and our game plan is clear.
MSN AUTOS: How much Chrysler engineering is going to go into the new midsize car?
SM: The only thing we’re delivering to Chrysler is the basic platform. Everything from that point on, once we deliver it, is up to Chrysler. Having said this, it’s not an inconsequential amount of knowledge that’s being transferred. Without it, you can’t build the car. Once we have the architecture in-house, then we can start peeling off the nameplates. The architecture is interesting because it’s capable of doing both the C and D segment. So, it’s versatile and it will allow us to effectively cover half the American market.
MSN AUTOS: When do you see Chrysler’s sales figures rebounding?
SM: The first half of 2010 is going to be more difficult than the second, simply because the product offering doesn’t start delivering until the second half. The first real viable, tangible evidence of this is going to be the Grand Cherokee in Q2, which is brand-new. Then we’re going to see the Wrangler coming out with a significant update. I think there are 14 other interventions, most of which are significant enough to warrant almost a new product launch, that will come out in Q3 or Q4 this year.
We know what number we need to hit in 2010 as a number of cars sold in the United States. I need to sell 1,100,000 cars a year in the United States.
MSN AUTOS: How is the U.S. government, as the company’s main shareholder, involved with you?
SM: Yes, they do talk to me. We have a very good dialogue with them. They have never interfered operationally or strategically with our choices. The only thing they want to hear is fundamentally that we continue to execute on what we promised we would do. By the way, as a lender, that’s all you can ask. That’s what they are. They’re lenders.
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