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.