12 April 2010

Chrysler's on the Mend, Marchionne Tells Dealers

The Detroit Free Press

NEW YORK – Neither rain nor ice nor Teamsters protests nor hotel fire alarms kept Chrysler CEO Sergio Marchionne from spreading the word that Chrysler is on the mend – whether an audience of auto dealers believed it or not.

The rumpled Italian executive said this morning he was more confident than ever in Chrysler’s plan, adding that the automaker had just under $5 billion in cash at the end of 2009 and would break even this year.

Worries about whether Chrysler could meet its plan “was a song we had heard before and we were not fazed,” Marchionne said.

Marchionne, speaking to a forum sponsored by the National Automobile Dealers Association and IHS Global Insight ahead of the New York auto show, also offered some tempered praise for dealers. He pledged that Chrysler would spend $500 million on its dealer network this year and noted it had reinstated about 25% of the dealers it cut following last year’s bankruptcy.

But he also said the arbitration for cut dealers pushed through Congress by NADA had created uncertainty that was blocking progress in other areas.

“All the time taken up with this is unhelpful,” he said. “There’s an inequitable impact on Chrysler.”

And he noted that today was the one-year anniversary from the announcement by President Barack Obama that Chrysler had 30 days to complete a partnership with Fiat or close. Marchionne said he keeps a poster with some of Obama’s remarks on his wall as a reminder.

He also gave some insight into how he works, namely almost around the clock, with 78 executives around the globe reporting directly to him.

“I feel a lot more comfortable today than I did 12 months ago,” Marchionne said.

Marchionne’s remarks were delayed by troubles with his flight out of Detroit, then interrupted when six protesters representing union carhaulers briefly tried to push into the meeting room. The protesters wore white jump suits labeled “Fiat Chrysler Crash Dummy,” and were forcibly ejected from the hotel.

About 20 minutes later, the hotel announced it was testing its fire alarms. Marchionne shook his head, and kept reading.

Chrysler has been struggling while it rushes to refill what had been an empty backlog of new models, with sales barely keeping pace with the market. The automaker has also stayed on the sidelines of an increasingly aggressive price war launched by Toyota to regain market share following its recalls.

Marchionne said the Jeep Grand Cherokee would launch May 3, and would be on sale in June or July. And he vowed to give more insight into Chrysler’s financials on April 21, when Fiat is scheduled to review its finances.

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