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Chrysler chief exudes confidence

Chrysler CEO Sergio Marchionne talks to Michigan Gov. Jennifer Granholm at the North American International Auto Show in Detroit. Marchionne is confident he can restore the troubled automaker to solid financial ground.

DETROIT — Can Chrysler be saved?

If you ask the steadily confident Sergio Marchionne, the answer is "yes." After all he did it before — bringing Italian carmaker Fiat back from financial disaster. Now the Fiat chief executive, who also heads Chrysler, needs to convince North American consumers that the brand is here to stay and that it makes cars and trucks they want to buy.

"We aren't going to bank the future of this house on one truck or one vehicle. You can't. We tried that before, and one car won't save the house," he said.

Dressed informally in a navy blue sweater and blue shirt, a marked contrast to the gray-and black-suited auto executives circulating through the North American International Auto Show Monday, Marchionne outlined a vision of a Chrysler reinvigorated through swapping technology, engineering and vehicles with Fiat.

He described his work as a "tedious rebuilding of a mosaic" of customer service, the market's negative perception of the quality of Chrysler vehicles and the way the brands are marketed.

One cheerleader is U.S. Transportation Secretary Ray LaHood.

"I consider Sergio Marchionne as the Lee Iacocca of his generation," LaHood said in an interview with the Los Angeles Times. He was referring to the former Chrysler chief executive who helped resurrect the company in the early 1980s.

LaHood said he recently spent an afternoon with Marchionne and believes he has the "vision" to create a global partnership between Chrysler and Fiat that will "bring the American automaker into the 21st

The auto industry is more skeptical.

"Chrysler has an uphill battle. It's hard to see how they will make it through the next 12 to 18 months with the product selection they have," said Jessica Caldwell, an industry analyst with Edmunds, the car information company.

But if someone is going to save Chrysler, it's likely to be Marchionne, said Rebecca Lindland, director of the autos group for IHS Global Insight, an economic forecasting firm in Lexington, Mass.

"He has done a remarkable job with Fiat, which also once was in a very bad state. He turned the company around even though people had a lot of doubts," she said.

The son of Italians who moved to Canada when he was 14, Marchionne worked as a lawyer and accountant there before moving to Europe to run a couple of Swiss companies. A growing reputation as a restructuring expert landed him a seat on the board of sputtering Fiat.

A year later, in 2004, he was chief executive. Marchionne quickly shook up the management ranks, sacking dozens of entrenched executives. He overhauled production, revamped the lineup and boosted morale of a beaten-down workforce.

Marchionne became chief executive of Chrysler after Fiat took over management of the Auburn Hills, Mich., carmaker when it emerged from bankruptcy in June. Fiat took a 20 percent stake in Chrysler as payment for operating the company and that can grow to 35 percent if it achieves certain goals, such as building new engines and vehicles in the U.S.

Plagued by quality problems, Fiat exited the U.S. auto market in 1983.

At Chrysler, Marchionne's challenge is that the automaker has few new vehicles in the product pipeline and it will be years before he's able to leverage Fiat's design and engineer skills to sell cars in the U.S.

He's going to start with the Fiat 500, or Cinquecento in Italian — a tiny car smaller than even BMW's Mini Cooper brand.

The fuel-sipping model has been incredibly popular in the narrow streets of Europe but industry analysts doubt it's the type of vehicle that will gain acceptance with the traditional Chrysler customer — drivers of Hemi-engine powered pickups in America's heartland. It's expected to go on sale in 2011.

And Marchionne said he's under no illusion that the small car will have an outsized effect on Chrysler sales. At best, he said, it will sell 100,000 units in the U.S., less than half its European volume.

The first larger Fiat-based Chryslers will hit showrooms sometime in 2012. Just a couple years later, Marchionne expects that more than half of Chrysler's models will be based on Fiat platforms.

There's not much in the near term. The company will launch production of a new generation Jeep Grand Cherokee SUV, Chrysler 300, Dodge Charger and a Dodge utility vehicle later this year. And it will start making a version of the Fiat 500 in Mexico for the North American market.

The dearth of products was evident on the floor of the Chrysler pavilion at the show. People flocked around Lancia Delta — built by the Fiat division but badged as a Chrysler — as well as gas-powered and electric versions of the Fiat 500. They paid little attention to the Chrysler products that were actually for sale domestically.

Marchionne said enough will be done to keep the company going as it works to overhaul its line-up and image.

"Let's not confuse the process of repackaging existing material with the work going on here to drastically change the product portfolio," he said.

Chrysler will have more than 20 new or redesigned vehicles in dealerships by 2014, and many will be far more fuel efficient than the products they are replacing, he said.

Chrysler's sales fell to 931,402 vehicles in 2009, its lowest level since 1962.

But Marchionne noted that autos have a longer lifespan in the marketplace than most people realize and that with smart marketing and targeted improvements, especially on what he and other company executives described as the lagging interiors of their vehicles, the company can survive until the new offerings roll into showrooms.

"We know this year will be difficult," he said, but the company has planned for the drought and is not burning up its cash.

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