Marchionne Q&A: CEO discusses Alfa, aluminum and UAW wages

Marchionne on aluminum: "We're going to watch with some intensity the launch of the [Ford] F-150. We internally have reservations about whether aluminum is the way to go on the truck side."

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DETROIT -- Fiat Chrysler CEO Sergio Marchionne has faith in Alfa Romeo and doubts about aluminum-bodied pickup trucks while continuing to oppose the long-term viability of two-tier UAW wages.

These comments came in response to questions from analysts following the presentation of his company’s five-year business plan Tuesday:

On planned growth in North America:

Growth in NAFTA “does assume a near perfect expansion of the brands. We’re still going up a million cars from 2014-18. It’s a big number. If there’s one thing we should have been able to deliver on the presentations is the clarity of the brands. We now have brands in the marketplace that are not butting heads.”

On UAW labor agreements:

“I’ve always been of the view that the two-tier wage structures are unsustainable in the long term. We need to freeze the tier ones and make them a dying class. I don’t mean that literally. I object violently to the notion of entitlement in the wage structure. That’s something that is incredibly unwise.”

On a broader use of aluminum in pickups:

“We’re going to watch with some intensity the launch of the [Ford] F-150. We internally have reservations about whether aluminum is the way to go on the truck side. I think the use of aluminum in our world is better used on other products other than the pickup.”

“We can make aluminum in 2017.”

On pricing in North America:

“I’m not concerned about capacity chasing demand. The pain of the bankruptcies for both ourselves and GM are both too close. We all know what happens when you start those kinds of kamikaze gains, when there is no winner."

On pickup incentives:

“Other people may be having additional problems justifying their investment in their pickup truck. If you ask me why I didn’t follow GM around that pricing curve, it’s because I didn’t have to.”

On expanding the Chrysler brand and reducing Dodge:

“Co-mingling Dodge and Chrysler would have cost us a lot of share. A mass market brand which is universal in application, that combination doesn’t work in our view.”

On the potential sale of Ferrari:

“The rightful owners of [Ferrari] are the shareholders of Fiat. All of them. They’ve waited long enough, haven’t they?”

On a mid-sized pickup for North America:

“We’ve gone through this issue now for five years, and we can’t flip the frame right.”

On the potential for a Jeep branded pickup:

“You might get that, too, if you press real hard. That was a different animal. It was a Jeep. Jeep can do a lot of things that other brands cannot do.”

On the size of the investment to re-establish the Alfa Romeo brand:

“I would invest in a greenfield to revive Alfa. It’s a great project. Those brands that are between a mass market and a premium brand don’t have the legs. You need the Alfa DNA.”

On recalls:

“I think you’re going to see a heightened level of sensitivity on this issue. There will be cases where people will go the extra yard,” because of heightened sensitivity to recalls.

On whether there was a better use of aluminum in Chrysler’s portfolio than on the next generation Jeep Wrangler:

“No.”

You can reach Larry P. Vellequette at lvellequette@crain.com.


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