ORLANDO, Fla. — Last year appears to have been the stumble that forced a slice of humble pie to Chrysler. It has been 16 months since emerging from Chapter 11, and Chrysler has been so quiet that you might have thought they had all but given up.
At a recent Chrysler dealer show attended by more than 75 percent of the 2,314 U.S. dealers, Sergio Marchionne, CEO of Chrysler LLC, spoke of the future, of the past and of lessons learned at the first show since 2007.
"What is ultimately needed is a reconnection to the heart of the market, of the brands to their customers" Said Marchionne. He graciously thanked Chrysler dealers who have "endured the hardship and uncertainty of the last 18 months" without the aid of forecasts or lengthy power point presentations that paint an unknown future.
Sergio Marchionne, unbeknown to many other than a hot head in the business world, declares himself a man of the industry in his black pants and sweaters, engaged with a team of gifted individuals in the rebuilding of Chrysler who seeks to restore credibility and confidence in a company whose past economic failures are still too fresh in the public mind and who does not have all the answers but is "trying to reverse what appeared to be an inevitable fatal tailspin". Some have said that Chrysler probably wishes to pretend that 2009 never happened but they would not have been able to recognize the past as misses, failures and their inability to be fair. "Chrysler needs to embrace the challenge of the new and see the future as a huge opportunity as Fiat did six years ago."
Ah yes, Fiat. The nominated manufacture President Obama deemed as the acceptable group to remake Chrysler. "Fiat has the privilege of collaborating in the rebirth of the U. S. auto industry, and we are particularly proud of this" said Marchionne. Fiat was saved when everyone had an opinion as to what should become of the brand. With no government bailouts accepted, Fiat managed to deliver $5 billion in trading profit in 2008; the highest ever their history.
So what does a 111-year Old Italian company have that Chrysler needs? Let’s start with the fact that by 2014 more than half of the Chryslers’ will be built on Fiat derived platforms and over 40% will be fitted with power trains that are either Fiat power trains or benefit from Fiat technology that will save Chrysler significant time in development, testing not to mention billions of dollars in investment. Fiat also promises by 2014 combined with Chrysler to ability to produce 6 million vehicles, which is critical as a global player. Joining of the two organizations will allow them to optimize the allocation of capital, leverage potential distribution networks, and utilize technical know-how that will allow for a full product range in both small and large segments. This joint effort will allow Chrysler to stay ahead with Fiat’s advanced fuel-saving technologies which will in turn provide a significant advantage in meeting future regulatory requirements.
As with any restructuring, the new Chrysler is built on Fiat’s five core principles:
- Merit above mere knowledge or rank.
- Leadership of change and of people above position.
- The search for excellence above mediocrity.
- A desire to engage in competition above egocentricity and insularity.
- Reliability and accountability above idle promises.
What do those cardinal rules that Fiat and now Chrysler live by mean to you? It means everything at Chrysler has changed. Everything.
The acknowledgment of their customer complaints over the years have finally been addressed, shoddy workmanship will no longer been tolerated. Chrysler made their case with the totally redesigned 2011 Jeep Grand Cherokee which they promise addresses every single complaint ever made about a Chrysler product, braking, steering, noise levels, interiors, right down to the transmission. Chrysler did not restrict any capital when designing these competitive products. An 8-speed-rear-wheel-drive transmission will be available mid 2011 followed by a 9-speed-front-wheel-drive transmission both of which are all-wheel drive and hybrid capable. 16 all-new or refreshed vehicles that make up 75% of Chrysler including the 2011 Chrysler 200, Chrysler Town & Country, the North America-bound Fiat 500 Sport and Jeep Patriot have been changed to present an exciting future all within the past 16 months that do not dwell on their not so fabulous past.
Chrysler promises to deliver the products the dealers were shown, to execute plans at competitive quality levels with adequate marketing support in exchange for commitment to deliver grown objectives, to comply to dealer standards, to invest in our brands, to adopt commercial practices that treat our products and customers with the dignity they deserve. This plan is "simple, straight and uncomplicated" says Marchionne.
Surprisingly Chrysler is in great financial shape. They will break even in 2010, increase operating profit to $5 billion by 2014 to double global sales to 2.8 million total units and generate revenues of $65-70 billion. They intend to pay back every single penny borrowed.
This crisis has been a learning experience to say the least for Chrysler with three major lessons learned. The first, problems denied and solutions delayed will result in a painful, costly day of reckoning. Second, every crisis provides an opportunity to change and improve. Last, the right people count more than the right process. Maybe we could all apply those lessons to our own personal crisis and not just an automotive one?
As describing the rebirth of Fiat, Marchionne stated the point of the story was success is never permanent and that you must earn it every day.
Come on Chrysler, you know we’re waiting.
“Merit above mere knowledge or rank.
Leadership of change and of people above position.
The search for excellence above mediocrity.
A desire to engage in competition above egocentricity and insularity.
Reliability and accountability above idle promises.”
The above crap is just THAT-crap. It may as well be posted on the walls of Southfield, MI in Italian…or ancient Greek. ANYONE with a modicum of training in psychology can tell you that as grandiose as these words aspire to be, you cannot run a historic high octane industry with these rules in place. You will CRUSH inspiration, destroy camaraderie, and install MANY MORE mini Caesars through out the organization, each preying on the more gullible as they attempt to contribute under such a rigged system.
The Old Man may LIKE the sound of his voice on these matters, be he will be back in his Villa on the Mediterranean drinking wine and grabbing ass-not on the front lines or walking the halls of engineering in “Southpark”.
Chrysler will CONTINUE to have a following here in the states but as a world beater in the car bidniz, just stick with the 500 as your bread and butter to the great unwashed masses across this mortal coil. Ford will EAT your lunch in EVERY market that Chrysler attempts to get involved in. It is IN the Chrysler DNA to be mediocre and Marchionne ain’t contributing any NEW DNA-he is just trying to bring a little parenting talent to a long spoiled child.
Good Luck
Darrow…for the Prosecution
WANKA,,,, Thats what you are mate, its people like you that create more problems than there really are! as for Ford you tend to forget or just don’t know of the debt they are inn with them selling or hocking of just about everything that wasn’t bolted down not to mention some car divisions that had a big hand in development of some of the current models.
Also don’t forget that GM and Chrysler were not the only ones standing in front of congress with their hands out asking for LOANS yep thats what they are LOANS.
Frustrated.
“you tend to forget or just don’t know of the debt they are in”
Yep, 20 Billion to be exact. But the DEBT isn’t the problem. It is the ability to pay it back that counts. At 68 Billion dollars debt and $1500 per car receipts going for UAW retirees healthcare it is quite obvious why GM threw in the towel. Ford was QUITE lucky in getting Mullaly to come over from Boeing. He knew INSTANTLY and instinctually what game was being played: high stakes metal bending needing LOTS of deep pockets to keep you in the game during the slack times.
His “selling or hocking” as you so derisively put it, appeared to put you in the short pants crowd economically. He borrowed that money while the fools on Wall Street were drunk with debt buying. As for going to Congress for money, it was GM and Chrysler that had their hand out for bailouts, not Ford. All Ford wanted was the SAME financial deal that was being offered to the other two, namely, access to that 25 Billion dollars of money set aside for alternative fuels R&D to build a new car for the future. The guvmint was threading to demand a car that no one in the industry could build. As it turned out, they (the guvmint) had to rebuild TWO companies before they could even THINK of building a new car. GM was a LONG time in the making and Chrysler has been to the alter of bankruptcy bliss before.
BTW, I bought 10,000 shares of F for $2.66 when the breakup value of the company (including the new debt) was $18.00. As the man says, “ya gotta KNOW when to hold ’em…and KNOW when to fold ’em.”
Darrow…for the Prosecution
I for one can’t wait for some of the great product that Chrysler has coming to market — the new 300 for one, is a real looker and will feature that 8 speed transmission talkes about. As for Darrow above, it would appear sheer ignorance is his modus operandi — what rock he crawl out from under?
I agree Dave. It’s always nice to see new products. I think the 200 is promising, the Sebring has been in need of revival for awhile. As far as the ’11 Grand Cherokee, I’d trade my car in tomorrow if I could. Everyone deserves a second chance, even Chrysler.
Leadership of change and of people above position.
I understand some of you guys thinking these words are crap… but give it just a second thought, and try to ask yourself every day: Am I managing to change what’s wrong? Am I helping (and pushing) my colleagues to provide and require change? Try to repeat this question to yourself consistently, week after week, month after month, year after year…
That’s the recipe of the leadership model of Mr. Marchionne. Easy and uncomplicated. In Fiat, as per my experience, it has worked fine in the last 5 years. I’ve personally seen a steady and continuous progress in the way the company is running, both below my area of influence and around me.
I think it will work in Chrysler aswell.
“Am I managing to change what’s wrong?”
You seem to be unaware of the PROBLEM facing Marchionne. He needs to pump iron, quality iron, and QUICK. Either he TENDS to that issue OR he goes to the ephemeral issues as posted on the walls and lavatories of the organization. The goals are laudable but now it not the time to “rebuild” a flawed and ingrained corporate culture. The business of Detroit has always been inspired by the gear heads. They made an uneasy alliance with the Devil when they determined that the bean counter was more important than the geeks. (I agree) But you CAN’T have the glory and grandeur that was once Detroit with out the soul of that era being brought along too. The business of car manufacturing is NOT done with the words;
“Merit above mere knowledge or rank.
Leadership of change and of people above position.
The search for excellence above mediocrity.
A desire to engage in competition above egocentricity and insularity.
Reliability and accountability above idle promises.â€
These things will either take care of themselves in a competitive marketplace (the marketplace IS the final arbiter) or time will tell thatchy are superfluous to the business at hand.
For MY money, Marchionne should mimeograph off about 10,000 copies of his BS for BS’s and send them up to Washington, DC to be posted in the halls of Congress. THEY could make use of such high rhetoric.
Darrow…for the Prosecution