REPORT: Fiat surprised by Chrysler's condition, new business plan coming in November
Bad news travels fast. That old adage was first coined hundreds of years before the Internet, and we'd say the phrase holds more true than ever in the age of Twitter, Facebook and, well, Autoblog. We're but one of many car sites that have mentioned the dearth of new product coming out of Auburn Hills, Michigan over the next couple years, but someone forgot to tell Fiat CEO Sergio Marchionne. The Pentastar's new chief executive reportedly told reporters in Frankfurt this week that he was "surprised" at how little was going on over at Chrysler the past 24 months. Surprised? Really? Did Marchionne actually ask Chrysler brass which new products were hitting the streets in 2010 and 2011?
As a result of the dearth of product, Marchionne and his team are going back to work on Chrysler's business plan, with a new plan to be announced sometime in November. Marchionne told Automotive News that the management team had to be "absolutely clear about what we want to do with Chrysler and where the organization is going to be in five years."
Car Concepts Automotive analyst Todd Turner told CNN that he too had a hard time believing that Marchionne was blissfully unaware of Chrysler's plight, adding that Marchionne is using the extra time to announce drastic actions to right the Pentastar ship. Turner went as far as to say that Chrysler could pull the plug on the slow-selling Chrysler brand all together within the next five years or perhaps simply rebadge Fiat models as Chrysler products. That would leave Fiat's Detroit operations with the Dodge and Jeep brands.
Chrysler's newest beast master paid precisely zero dollars (or Euros or Lira or gold cougerans) for its pet project, and Marchionne reiterated that Fiat intended to keep it that way. Marchionne added that he didn't plan any outside investments for Chrysler but added that if total sales in the U.S. market don't hit about 11 million units in 2010, Chrysler may have to close more plants. We're just hoping Chrysler can make it through the next couple of years to actually get to the point where it is selling rebadged Fiats.
[Source: CNN Money | Photo by Bill Pugliano/Getty]
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Reader Comments (Page 1 of 3)
Brian 11:26AM (9/17/2009)
Why didn't we allow Chrysler to go Chapter 7? Hell, they should have gone Chapter 7 in the early '80s! We keep propping them up with our tax dollars, again and again. They're a failure, a loser in the market. Let them FAIL already!
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jpm100 11:45AM (9/17/2009)
What condition were they in when Daimler took them over?
Something that if we didn't let happen, they wouldn't have needed a bailout.
inteller 11:45AM (9/17/2009)
"and where the organization is going to be in five years."
how about the history books?
Frank 11:46AM (9/17/2009)
Chrysler did not get a bailout before now. In the early 80's they obtained a loan package from private banks that were guaranteed against default by the US government. They didn't default (atually they paid the loans off 7 years early) and no taxpayer money was involved.
Brian 11:48AM (9/17/2009)
@jpm100, a blind, retarded monkey could make money in the '90s economy. The economy was growing at a 5% clip every quarter and gas was 90 cents a gallon!
Even without Diamler they would have crashed. The '90s Chryslers looked great, but quality issues were already popping up all over the place by 1999 (ex., the Neons). And the interiors were still crap. Not as bad as they are now, but crap.
Jei 12:31PM (9/17/2009)
The merger with DaimlerBenz was supposed to clean up Chrysler's shortfalls and introduce better levels of vehicles from a probable synergy b/t the two auto giants. Chrysler was supposed to benefit from some of the advanced tech from Mercedes-Benz; and M-B would benefit from a better perception of Chrysler's outgoing product because of the merger, shared technology, and the scales of economy in providing (unseen) tech to both Chrysler Corp & DaimlerBenz vehicles.
In reality, M-B balked at sharing a lot of tech with the Chrysler's brand fearing that would de-value the M-B brand perception. Early work started on the Chrys 300 after the Crossfire was a success manufacturing project, but a loser in the market. Success of the LX platform (and how it made sense to use proven last-gen M-B platforms to make new Chrysler vehicles) wasn't fully realized ---- have you seen the 2010 Grand Cherokee? And many of their operations were still operating in redundant offices and much of the organizations weren't sharing much information and working together.
DCX was meant to fail....had Chrysler merged with an American or Japanese organization, the outcome may have been vastly different.
jpm100 12:47PM (9/17/2009)
@Jei,
despite Chrysler's shortfalls, they had become the most efficient car maker in the world just before the take over. They had also amassed a $10-12 billion dollar fund to weather economic downturns which would have fit the bill this past year, if they needed it. But that fund disappeared faster than the paint dried on the DaimlerChrsyler signs. The rest that was working was wrecked under Daimler's management.
BigWill 3:09PM (9/17/2009)
While it's fun to pile onto Daimler for the damage they wrought onto Chrysler, don't forget that Bob Eaton was already killing Chrysler internally; it was Eaton-driven penny pinching that caused some major quality debacles at Chrysler, and it was Eaton who drove the deal with Daimler.
As for this story, it's really insulting to one's intelligence. We're supposed to believe that Sergio The Megalomaniacal Auto Genius had a brain fart when he did due diligence on Chrysler? Spare me. My bet is he's gearing up to blackmail the U.S. Treasury for more money.
Frank 4:19PM (9/17/2009)
@BillWill
Ah, Bob Eaton. He's the ex-GM guy who overruled the engineers and put the cheap head gaskets on the Neon and other products. All to save 2 bucks a car. You can criticize Bob Lutz, but he would never have done that.
May Eaton have to drive a Mercedes with electrical issues for all eternity while the dealer tells him it's great German engineering.
Steve Lopez 11:29AM (9/17/2009)
I hope those are not the plans for Chrysler's Premium Division from Fiat.
Forget it!
Chrysler can start competiting with premium luxury brands, given the right products to sell. Rebadging stinks!!!!
Using parts, etc., from other models is another thing.
I hope this doesn't happen and that Fiat keeps the Chrysler Division as the seperate "Premium Luxury" division it needs to be!!!!
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Matt 11:52AM (9/17/2009)
" keeps the Chrysler Division as the seperate "Premium Luxury" division "??????
Are we talking about the same Chrysler? According to their website, Chrysler makes 5 cars, one of which is a convertable version of another.
There is no way anyone would classify the Sebring, Town & Country, or PT Cruiser as luxury cars. Maybe, the 300 could be considered Entry-Level Luxury, but it's not any nicer than a new Ford Taurus.
I'm pretty sure that the Sebring convirtable is only sold to rental fleets. Also, the PT Cruiser was absolutely the worst car i have ever driven.
Chrysler either needs an entire product refresh, or it needs to go away, seeing as how 4 of their 5 cars are already available as a Dodge (an Avenger convertable probably wouldn't be too hard to make either for the rentals.)
Epsilon-Not 11:55AM (9/17/2009)
The Chrysler brand might have had luxury credentials once, but it's pissed any of them away a long time ago...
Reviving a defunct luxury marque is quite difficult- look at GM's efforts at Cadillac, where people STILL bring up the Cimarron at every possible opportunity... Honestly, if Fiat wants a luxury brand in the US, they'd probably be better off killing Chrysler and using Alfa Romeo.
jamie 12:00PM (9/17/2009)
The quick fix would be for Chrysler to sell Alfa Romeos (as is, and not rebadged either), and for Dodge to sell rebadged FIATs (except for the 500). Jeep would remain as Jeep.
This way Marchionne could leverage his portfolio into producing world class automobiles worldwide. This is not rocket science, but the synergies and economies of scale are already staring him in the face. So, get on with the program!
Matt 12:02PM (9/17/2009)
Oh, yeah, forget what I said about Chrysler going away.
I'd love to see Alfa's stateside, even if they are wearing a Chrysler badge.
Dane 11:33AM (9/17/2009)
If they re-badge Chrysler as FIATS I would be looking there in stead of the Ford lot.... MMMM Abarth Grand Punto..... or Chrysler Grand Punto.... White please, read interior!!!
Bravo FIAT!!!!!!!!!
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jamie 11:35AM (9/17/2009)
Uh, Autoblog...
That's 'Krugerrands' not "cougerans".
Better stick to automobiles and leave the gold and diamonds for us girls.
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Mike 12:00PM (9/17/2009)
Wow, it really does say "gold cougerans." Astounding.
RetardedSparks 12:02PM (9/17/2009)
Oh, I thought it was a currency used by hot 40 year old women.
Judy Zik 12:38PM (9/17/2009)
LOL. @ Jamie
This is pure posturing. Nobody on planet earth with any clue of what has been going on in the auto business didn't see this coming. It has been painfully obvious since Cerberus started cutting that product development at Chrysler went into hibernation. For Fiat to come back now and say they didn't know Chrysler's cupboard was bare is an insult to our intelligence. It is going to be a long cold winter a Chrysler trying to get by with their current product line while they wait for the Fiatyslers. Bring on the fleet customers and the decontented models at fire sale prices.
With Ford on a roll and a newly invigorated GM dealer body selling new products Chrysler dealers are going to have a hard time competing.
Todd 11:36AM (9/17/2009)
"absolutely clear about what we want to do with Chrysler and where the organization is going to be in five years." = 99% of all Chrysler dealerships closed, remaining 1% selling low volume Fiat brands ( Ferrari, trendy fiat convertibles, etc. ) only in larger markets.
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