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ReprintsSymbolically, Chrysler starts playing offense
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As auto industry investments go, Chrysler Group's $179 million for engine production tooling is middling. But CEO Sergio Marchionne cranked up the automaker's publicity machine to top volume today.
Michigan Gov. Jennifer Granholm, UAW Vice President General Holiefield, 20 plant workers and a couple dozen Chrysler executives filled the front of the auditorium at Chrysler headquarters in Auburn Hills., Mich.
Alas, the news was out: New line, 1.4-liter gasoline engine, Dundee engine plant, 155 new jobs. Even Marchionne called it “Detroit's worst-keep secret.” A lot of media posted short stories beforehand and skipped the event.
But Marchionne's instincts were right. For Chrysler, it's time to sound the trumpet.
After years of retreat, pain and near-death crises, today Chrysler visibly shifted from defense to playing offense.
We've had the seemingly endless string of bad news for Chrysler. All the losses. All the pleading for another chance. All the righteous grilling and posturing at which Congress excels. All the grand plans for recovery. We've hear all the what-we-did-wrongs and the what-we're-gonna-do-rights until they all start to run together.
Yes, more dreary news still lies ahead.
But today was different. Marchionne talked “doing,” not “gonna.”
Production equipment installation has already started. Job 1 is fourth quarter 2010. The new line can build 100,000 engines a year on one shift.
Today was just a first step for Chrysler. And in a car-bound state like Michigan that has lost two-thirds of its auto manufacturing jobs in a decade, 155 jobs is a very, very tiny step.
But that's how the auto industry always breaks its down cycles. By adding a few jobs here, a few there.
For Marchionne, Fiat and Chrysler, this is the first step in a lot of directions.
For starters, it's part one in the trifecta of conditions that would boost Fiat's stake in Chrysler to 35 percent from 20 percent: build an engine in the U.S., build a 40mpg car in the U.S. and boost Chrysler exports by $1.5 billion.
The engine leverages Fiat technology. Chrysler's $179 million is all tooling and “almost zero development cost,” Marchionne says, because Fiat paid that.
But perhaps key, it's good press. Chrysler still has incredible headwinds to overcome, but Marchionne says his experience in Fiat's similar long-odds turnaround convinced him it takes “at least 24 months to change consumer perception” on brands.
With a series of new Fiat-based vehicles arriving in two years, Marchionne needs to start now to woo back customers.
So Marchionne blew his trumpet to started the clock on rehabbing Chrysler's reputation. Even if his trumpet was muted, it was playing “Charge.”
