Fiat’s Plan For Chrysler Recovery Revealed In Six-Hour Presentation

HAVING PLACED ITS FUTURE in the hands of new partner Fiat, Chrysler has a new 'five year plan' recovery plan, revealed in a six-hour presentation today.

The plan, led by new CEO Sergio Marchionne, forecasts sales figures doubling by 2014, and more than a dozen new models built on Fiat-developed platforms.

Marchionne said that while achieving the plan's goals will not be easy, his experience with Fiat and its own turnaround five years ago stood as an example of what can be achieved.

"Some of you are going to walk out of here skeptical, and some of you are going to be downright incredulous," Marchionne said during the presentation, surrounded by Chrysler's 24 top managers.

"We have been here before."

With 2009 sales down nearly 40 percent, Chrysler's board chairman C. Robert Kidder said "the top priority is to invest to create a compelling brand and product offering".

"There is no 'business as usual' at Chrysler. There is incredible commitment to and energy for change," Kidder said.

Looking ahead, Chrysler will use the next couple of years to initiate and refine the changes required to ensure its survival.

“There is some question on what we’re going to be able to achieve in 2010, being the first year of the revamped organization," Fiat and Chrysler CEO Sergio Marchionne said at the event.

“Obviously there’ll be a rationalization of the product portfolio.”

Platforms And Technology

Marchionne said that Chrysler will now have access to engine and fuel-saving technology it could not have developed on its own.

The new engines will include Fiat's 1.4 litre, four-cylinder Multiair units.

By 2014, half of Chrysler's product line will be built either directly on Fiat-developed platforms and technology, or on platforms developed in partnership between the two.

Likewise, Fiat will utilise some of Chrysler's existing and upcoming platforms; the next generation Chrysler 300C platform replacing its own in-development rear-wheel-drive project.

“You don’t have to reinvent the whole thing every time you do a platform. You just don’t,” Marchionne said.

“Sixty percent of an Alfa Mito is underneath a Fiat Punto. Looking at the cars, you’d never guess. We’ve gotten pretty good at this stuff.”

Around 40 percent of Chrysler's models in 2014 will be powered by Fiat engines.

Brands And Models

The new Chrysler logo, which leaked yesterday, will not replace the 'pentastar' logo as Chrysler's corporate identity.

It will, however, replace the current winged badging on Chrysler-branded vehicles.

No confirmation was offered on the question of whether Chrysler-badged models will continue to be offered outside of North America, but Marchionne said that Chrysler will be spearheaded internationally by the Jeep name.

Chrysler is aiming to grow its export figures from 144,000 this year to 500,000 in five years, with the majority of the export growth centred around the Jeep brand.

Jeep

In 2010, Jeep will launch the new Grand Cherokee and update the Patriot, Compass and Wrangler models.

Come 2013, new Fiat-based models will replace the Patriot and Compass.

Chrysler

Chrysler will be given a massive style overhaul, positioning it as a more desirable and 'sexy' brand. Marchionne said the brand is aiming for "comfort and glamour".

A redesigned Sebring and the new 300C will be unveiled late next year, and a new Fiat-based compact sedan will join the line-up in 2012.

Three more Fiat-based models will be added in 2013, including a small car - most likely a rebadged Punto - along with a Sebring replacement and a new mid-size crossover SUV.

A new Chrysler-developed Voyager will be unveiled in 2014.

Dodge

Dropping the Ram badge, Dodge is running with a new text-based logo.

Updated Journey and Avenger models will be revealed in 2010, followed by an all-new Charger sedan and a new CUV.

The Challenger muscle car will get an update in 2011.

The current generation Viper will be retired next year, with 500 special edition units to be built. An all-new sports car is in the works to replace the Viper, to be launched around 2012.

To put the Viper successor's possibilities in perspective: Fiat also owns Alfa Romeo, Ferrari and Maserati - three brands with significant pedigrees.

A new Fiat-based compact sedan will replace the Caliber after 2012.

Come 2013, two more Fiat-based cars will join the Dodge line-up: a small car and a successor to the Avenger sedan.

Ram

Dodge's Ram sub-brand will be split off into its own Ram Trucks brand, with a new mid-size pickup scheduled for 2011.

Fiat-based small and large commercial vans will join the line-up in 2012.

Financial Recovery

Thanks to strict cost controls (and the US government's US$10 billion injection) before and after Fiat's takeover, Chrysler's cash reserves have grown by US$1.7bn (to $5.7bn) in the past four months

Marchionne said that the cost-cutting had restored Chrysler to operating profit in September this year.

In a recent cost-cutting move, Chrysler offered buyouts to 23,000 workers.

Chrysler expects to completely repay its government loans by 2014, but Richard Palmer, Chrysler's Chief Financial Officer, said a public offering was "unlikely" to be announced before 2011.