Larry P. Vellequette
Larry P. Vellequette
Chrysler Group reporter

Will Marchionne's profits grab come up empty?

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Chrysler Group CEO Sergio Marchionne today seemed like a grizzly bear standing amid a stream of happily swimming salmon.

In comments to analysts, the enigmatic Chrysler boss said he was "envious" of the profit margins of his suppliers, and vowed to seek a share of their newfound wealth.

Have no doubt: Profitable suppliers are the salmon in this scenario, and Marchionne is the grizzly bear in a hungry and foul mood.

Suppliers have been here before, of course. And they have learned strategies over the years to protect their profits from the powerful clutches of their primary customers.

Suppliers now realize, for example, that automakers can’t live without the sustenance that suppliers provide -- a constant stream of new technology and productivity enhancements.

Suppliers also recognize that the power balance in their relationships with automakers has turned in their favor. They have the ability to say “no” -- and make it count.

Marchionne’s comments come as he and Chrysler’s top management are under intense pressure to raise the company’s lagging profit margins.

But unfortunately for this hungry bear, he’s probably fishing in the wrong stream.

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

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