Marchionne celebrates Chrysler, warns on Europe
Exec: Debt crisis poses the biggest threat to global auto industry
 | Sergio Marchionne, Chrysler-Fiat CEO: "Political instability is disruptive to an economy, and it discourages investment." Photo credit: GLENN TRIEST |
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DETROIT -- Sergio Marchionne told industry executives to be wary of the crisis in Europe, even as he celebrated Chrysler Group's historic comeback in 2011.
Speaking at the Automotive News World Congress, Marchionne, 59, CEO of Chrysler-Fiat, praised his workers and managers who had struggled to restore the company.
He also dropped a few hints about what's on the agenda for 2012 and beyond:
-- Chrysler will "start exploring diesel" engines in its larger vehicles, beginning in 2013. But he said it is "highly unlikely" that Chrysler will put diesel engines in its smaller cars.
-- Chrysler is preparing a Super Bowl ad this year, but it will be more traditional -- not the swing-for-the-fences, 2-minute "Born of Fire" blockbuster that was the star of the automotive ad world in 2011.
-- Chrysler and Fiat are still seeking a third global partner, but "any type of collaborations in Europe would be gutsy."
Europe, inequality threaten
"The real problem we face right now on a global scale is Europe," Marchionne said.
One risk: that nations bail out of the euro, leading Germany to revert to the Deutsche mark.
"There are enough German people in this room who should be spooked by the re-creation of the Deutsche mark," he said. "It would make Germany the most uncompetitive European country on the face of the earth, regardless of the quality of the work force, which is undisputedly good."
He also said the protests that have rocked nations and roiled markets are rooted in inequality that weakens societies and is bad for business.
"Political instability is disruptive to an economy, and it discourages investment," Marchionne said. While some income inequality is natural, too much leads to an unsustainable society, he added.
"These issues call into focus the moral responsibility of our actions," he said.
He said the European sovereign debt crisis had turned the tables within his own combined company: where a Eurocentric Fiat had helped save Chrysler in 2009, Chrysler's profits and those of Fiat in Latin America are now propping up Fiat.
"In less than three years, the tables have turned as far as regional economies go. But the underlying rationale for the partnership remains the same: to create the mass and the efficiencies demanded by global competition," he said.
Marchionne said Chrysler's workers and managers had worked tirelessly to restore the smallest of the Detroit automakers and would continue to do so in the years ahead.
"All of our people, represented and nonrepresented, have worked together with unwavering dedication to bring Chrysler back from the brink," Marchionne said. He recalled touring the Jefferson North Assembly plant in Detroit prior to Fiat S.p.A.'s taking control of Chrysler in 2009 and finding it in a state of "industrial neglect."
Rejuvenated plant
But while the plant was shut down, he said, workers there rejuvenated the plant -- painting, taking out tons of scrap and eliminating 308 unsafe conditions.
The plant makes the Jeep Grand Cherokee and Dodge Durango and will also make a new SUV for Maserati. Last week Chrysler said that it would add 1,100 jobs there in early 2013 to expand production.
"This is a story of revitalization in a company that was regarded as irrelevant, set in a city that has been disparaged as a failure," Marchionne said.
He recalled Chrysler's award-winning "Born of Fire" ad which, he said, "celebrated the resilience of the people who make up our group, people who have been to hell and back and yet aspire to create a better future."
Marchionne also discussed the North American auto industry's "transformational change" during 2008-09 and said European automakers, labor unions and governments must take the same bitter medicine to ensure the survival of European automotive manufacturing.
He had a warning for some Italian industrial unions' efforts to block what he said are needed labor reforms in the country: "If they keep on blocking the process, then Fiat would have no choice but to continue to reduce its exposure" there.
Company: Chrysler-Fiat
Main point: Automakers shouldn't underestimate European crisis.
Quote: "The real problem we face right now on a global scale is Europe."
You can reach Larry P. Vellequette at lvellequette@crain.com.
