(Chris McGrath/Getty Images)
Italian automaker Fiat S.p.A. has majority control of Chrysler, and CEO Sergio Marchionne—who led a similar turnaround at his company earlier this decade—will lead the transformation at Chrysler.
“Fundamentally, this thing needs to earn its right to survive as a competitive American carmaker,” Marchionne said at a Nov. 4 conference at Auburn Hills, Michigan, to present Chrysler’s business plan, as published on its Web site.
“That is the real target,” he continued.
For the first time since its bankruptcy, Chrysler unveiled its five-year rebuilding plan to the public. Marchionne, who has the blessing of the U.S. and Canadian governments and the United Auto Workers union, has grand plans for the company, including doubling sales by 2014.
In his presentation, Chief Financial Officer Richard Palmer projects that sales will more than double from 1.3 million vehicles sold in 2009 to more than 2.8 million vehicles sold by 2014 across all regions, according to a presentation provided by Chrysler.
The company also targets U.S. market share growth from less than 9 percent this year to more than 13 percent by 2014. Palmer said that Chrysler plans to break even operationally in 2010, and plans to spend more than $23 billion in research and development to develop new cars and automotive technologies over the next five years, including refreshing 75 percent of the company’s models.
Chrysler hopes the spending will boost its image and rapport with consumers—many of the company’s Chrysler and Jeep models need new designs. Marchionne conceded at the conference that Chrysler’s silence during the months after its bankruptcy has hurt its market share and sales—which last month were almost 40 percent below last year’s.
But not all stakeholders agree with the company’s assessment. In a recent report on TARP, the U.S. Government Accountability Office said the “Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially above what they have been in the past.” The Treasury currently holds a 9.85 percent stake in the company, and is closely monitoring Chrysler’s finances and personnel movements.
