Q&A: Chrysler boss Dieter Zetsche on his first three years and the future

Detroit. Since he took over the post as Chrysler's president three years ago, Dieter Zetsche has been working on a new positioning for the traditional brand and on returning the company to profit. In an interview with Automobilwoche he took stock of his tenure.

Q: Did Chrysler make a profit in 2003?

A: I am not authorized to talk about our results until February. However, I can tell you that we reached all our goals in regard to saving costs and in many cases even surpassed our expectations. We made more progress than many of our competitors. That is why now we measure ourselves against the best. For example in regard to productivity we want to be on a level with Nissan by 2007. We used to have the slowest assembly time per vehicle. We are moving upwards fast. In 2002 we increased our productivity by 8.3 percent, in 2003 by more than 7 percent. We are therefore definitely on course.

Q: According to an agreement with the U.S. auto trade unions you are allowed to make a further 17,700 redundancies.

A: We are aiming for improved productivity but also for growing volume. We also plan to sell further component plants. In total the number of employees will therefore continue to fall. If necessary we will do what the contract allows us to do.

Q: How much did the discount battles in 2003 cost you?

A: When adding up the figures -- 4,000 dollars per vehicle -- the result seems astronomical. However, list price adjustments have also been made. In fact net prices have dropped -- along with our competitors' -- but not on the scale that the incentives may indicate. But we are talking about billions.

Q: Are there any signs of improvement?

A: Growth might slow down. However, incentives are part of life here (in the U.S. market). It is not very realistic to think that we can make up for the drop in new car prices. Still it would be good news if prices remained at the current level.

Q: Will there be a joint venture for passenger cars with Mitsubishi, similar to the one you have for pickups?

A: There is no reason why not. However, such joint projects should never be an end in itself but should only be considered if there is a benefit. For example if one partner believes that there is additional demand for a product, but hasn't got the capacity and the other partner has a plant that still has free capacity. One could therefore definitely imagine having joint passenger car production with Mitsubishi.

Q: Diesel vehicles are a hot subject in the USA.

A: In the fall we will introduce the diesel version of the Liberty. If that works well then it will not be our only diesel-powered model. We will use the diesel products we already have in Europe, of course. Diesel has a lot of potential in the USA -- for the country itself, for the market and for customers.

Q: Are there also plans for hybrid vehicles?

A: Of course. We will launch a hybrid pickup in a year's time. In two to three years passenger cars will follow. I believe that diesel and hybrid vehicles can exist alongside each other.

Q: Both your customers and your dealers seem to have a problem with the new 300 series with rear-wheel drive.

A: The rear-wheel drive has many advantages and the group has decades of experience. It seems that during the past 15 years the Big Three were a bit too successful in communicating that U.S. customers do not need rear wheel drive. We have to put that right.

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