'I'VE GOT MY NECK STUCK IN THIS' - RAM BOSS

+ Click to Enlarge THIS IS HOW IT'S GONNA BE: Fiat and Chrysler head Sergio Marchionne spells out his plan to transform the troubled US No.3 automaker into a viable business. Image: AFP

November 7, 2009



NOT YOUR AVERAGE ITALIAN: Fiat and Chrysler boss Sergio Marchionne, as always casually dressed, stars in the official video of the Chrysler conference.

Dainty signs sitting next to the espresso machines outside Chrysler's design dome in Auburn Hills, Michigan, reassured journalists and analysts that the elaborate food and beverages display came courtesy of the Fiat Group.

"The new Chrysler is being extremely parsimonious: i.e. cheap," Sergio Marchionne, the head of both Fiat and Chrysler, said as he presented a five-year plan on Wednesday to transform the beleaguered US automaker.

Thanks to years of painful restructuring, major concessions from its unions and a government-sponsored bankruptcy, the new Chrysler has dramatically reduced fixed costs.

Its alliance with Fiat also promises to provide significant costs savings by sharing technology, purchasing and vehicle platforms but reduced costs will not be enough to transform the often-troubled automaker - the third-largest in the US - into a truly viable company. For that, it will need to consistently build high quality and appealing vehicles.

Chrysler has an ambitious plan to more than double its global sales, refresh its entire product line-up, rack up at least $3-billion (R23-billion) in net profits and repay $7.4-billion (R56-billion) in government loans by 2014.

Chrysler executives who took the stage this week readily admitted that consistency and quality had not been the company's strong points. The head of quality said he wasn't "in denial" about the company's poor reputation and admitted that Chrysler did not even have a definition of quality when he arrived.

The Jeep chief acknowledged that the storied brand had been slipping even as he vowed to nearly double sales in the next five years. And the new head of Dodge said he had seen a lot of mistakes come out of the design dome.

However, the two dozen executives who spoke over the course of eight hours all insisted that the new focus and energy brought by Marchionne and his team would lead to better products and a stronger future.

Board chairman Robert Kidder said: "There is no business as usual at Chrysler - there is incredible commitment and energy for change.

"Sergio and his team are reinventing the Chrysler business model into one with global economies of scales, strong focused brands and products, and with an entirely new high-performance culture."

Fiat, which owns a 20 percent stake in Chrysler in exchange for sharing its technology and charismatic leader, is the second European automaker to make such an attempt.

POTENTIAL CULTURE CLASH

Germany's Daimler-Benz paid $36-billion (R270-billion) for Chrysler in 1998 but the "marriage of equals" collapsed into an acrimonious divorce after nine loss-making years that saw the two companies fail to integrate.

Marchionne acknowledged concerns about a potential culture clash, itself evident in the presentations on how the company would reshape its struggling brands.

Olivier Francois, who took over the Chrysler brand a month ago without resigning from his post as the head of Fiat's Lancia, said: "I imagine you're wondering how a Frenchman who works for an Italian company will run an American brand in Michigan.

"Well, sometimes you get a clearer vision from afar," Francois said before launching into a description of how he would bring style and glamour back to the iconic brand.

Ralph Gilles, the hot young designer who now leads the Dodge brand, spoke of the need to bring back the company's "mojo" and ensure that "every car that we make will have a soul".

DOWN-HOME AMERICAN VALUES

Calling Dodge "the coolest brand ever", he presented a hip new ad that flashed images of crazy stunts, old surfers, young moms with tattoos, people making out in the back seat, DJs, dancing and the "physics of fun".

Then Fred Diaz, who heads the new Ram division devoted to bakkies, stepped on stage to explain how "you'll never have trouble recognising what a big bad Ram looks like".

His message was one of down-home American values, captured in a new ad showing still images of cowboys, farmers, carpenters, firefighters, sports heroes and steel plants with the roughly spoken tagline: "My name is Ram. My tank is full."

The brands needed identities, Marchionne explained. And now that Chrysler and Fiat are "inexorably intertwined," his plan must succeed.

"I've got my neck stuck in this hook line and sinker," he told reporters. - AFP