Thank you, Keith - I appreciate that introduction.
But, I wish you had mentioned that since this is my first appearance as a dinner speaker at the Automotive News World Congress, I should perhaps be spared your traditional interrogation after my talk.
Especially since I gave you a break last week by letting you practice your skills behind the bar of the Chrysler firehouse pub, just in case your day job wasn't interesting enough.
However, with one look at your face, I'm certain I am not going to get a break from you tonight! Particularly since you told me the questions you're going to ask don't really have very much to do with the questions from the audience.
At any rate, I'm honored tonight to be able to speak to you - about Chrysler, about the automobile business in general - and about the "Connected World."
"Meeting the Challenge of a Connected World" is certainly an interesting and somewhat ironic topic for this year's conference.
It's ironic in the sense that the consensus among most experts was that a world where more people were connected to one another would be one that was more predictable.
In other words, greater communication, more information sharing, and more knowledge, would lead to more certainty.
Following that logic, and watching the magic of Alan Greenspan, it wasn't too long ago that many of us were beginning to believe that recessions were a thing of the past.
The new economy would consistently drive productivity gains to unreached levels and, therefore, the "boom and bust" economic cycles of the past would become history.
This was great! For our industry, that meant all we had to do was launch our new products at regular intervals, schedule production, and watch our companies grow.
What the hell happened?
Well, faster than an Enron audit, the dream blew up and reality is back. Only this time reality has sharper teeth and a bad attitude.
Instead of a growth economy, we're faced with something much gloomier and unglamorous, complete with a very "old school" name - and it's called a recession.
We are plagued by overcapacity, rising costs, declining revenues, cutbacks and deficits. All of that certainly was accentuated by the tragic events of 9-11, but to some extent, foreseeable even before.
In the automotive industry, where "business as usual" hasn't been "business as usual" for a long, long time, the only thing that's certain now is uncertainty.
Just look at the sales forecasts for this calendar year. I've heard predictions of sales rates as low as less than 14 million… to as high as more than 17 million. That's a spread of three million vehicles!
If you were to nail me down to a range, I'd estimate this year's industry will come in between 15 million and 16 million units.
Granted, predicting sales has never been an exact science; nobody predicted 17.1 million for 2001, either, but I see more uncertainty now than I have in many years.
The undeniable fact is that as we enter 2002, the environment is unforgiving and the basic requirements of our industry will differentiate the strong ones from the weak ones.
It is not a time for the faint of heart - if there was ever a time for that in this business!
As you well know, at Chrysler we've had the "Turnaround Plan" for our recovery in effect for a year now. And I'm happy to say we're on target and committed to sticking with it.
Quite simply, it's our goal, and we will not waver from it.
For us, turning this company around is a "given" - not an option.
Through the talented people at work in every corner of our company, we've seen measurable improvements in every facet of our business.
We not only worked diligently on reducing our plant, material and fixed costs in 2001, but, in fact, we overachieved on this objective to the point where we're better off this year … right off the bat.
On a sideline, let me add one personal note referring to 2001.
Obviously it was my first year here in Detroit. What a great experience.
Everybody: the media, the suppliers, the dealers, the union, the community leaders - perhaps even the competition - accepted me from day one and did everything to make me feel welcome.
The same thing can be said for Wolfgang Bernhard, and even more important, for my family.
We feel at home.
I want to thank all of you, wholeheartedly, for this unusually warm reception.
Back to business.
For 2002, we will continue to focus our efforts on reducing material costs through parts commonization, reverse engineering, close cooperation with our suppliers, and by sharpening our engineering focus to continue to build value.
We will reduce our plant costs by accelerating productivity improvements, reducing our launch costs - particularly on our 2002 Heavy-Duty Dodge Ram trucks - and through the depreciation of re-utilized assets.
As for our fixed costs, we will have continued workforce reductions through early retirements; but, since we'll be doing more within our Turnaround Plan on overall cost reductions, there are no plans for additional layoffs.
As for our suppliers, the good news is that the price cuts are behind us, and now our efforts are focused on working together to get costs down. And we can do that based on strong and healthy relations with our suppliers, as the most recent survey has shown.
In fact, an independent survey released last November ranked DCX as one of the best automakers to work with in cost-cutting processes, ranked only behind Toyota.
Because of our determined efforts in all these areas, we are confident that we can continue to meet our break-even projections for the Chrysler Group in 2002.
Of course, trimming costs will remain a constant in our business as long as a manufacturer is determined to stay competitive. It is a mandatory part of the equation.
But there is another side of this equation - and that is to generate more revenue.
We will continue to help improve the effectiveness of our dealers, while maintaining competitive pricing positions in every segment in which we compete.
Most significantly, we will enhance our product focus - but more about that in a minute.
We're already seeing signs of our turnaround plan's effectiveness paying off in the marketplace.
Although we only report overall sales, if you exclude fleet sales and look just at our retail sales, our share of that part of the market increased by over one percentage point throughout last year.
In fact, since last August, our overall market share has increased every month.
And within the same time, we have changed our position in incentive levels from the highest to the lowest, at least in this town.
One important reason is the restored good relationship we entertain with our dealers, as shown in the last survey from NADA.
While we're on the subject of the retail sales market, I would like to take this opportunity to say a few words about this over-dependency on "incentives" that has spread like wildfire through our business.
I won't sugarcoat this: I view the incentive game as a kind of a drug. Short term, it may make you feel good. But, it will have long-term negative consequences for our industry.
When we as the manufacturers artificially prop up sales, we're playing a dangerous game.
This might have been a different situation right after 9-11, as an attempt to re-ignite some confidence by strong vehicle sales. And, I agree with that.
But, on an ongoing basis, it's as if we're sending the message that all of the design work … all of the painstaking research and development … and all of the efforts by everyone in the company from every discipline to get quality, competitive products to market are, in the end, inconsequential.
It's as if we're dismissing those efforts on a whim and a "whatever."
I, for one, think this is a travesty.
It's demeaning to the employees who work so hard … it's demeaning to the dealers who are forced to exist in a sales-incentive environment that breeds contempt … and, most importantly, it's demeaning to the customer.
Because, in the end, he or she finds out that those "baked-in" incentives have reduced the resale value of their vehicle down the road - not even to speak about the effect it has on our shareholders.
I believe that an exaggerated incentive game creates an "aura of disrespect" for the product, ultimately undermining the very integrity of it.
It almost turns a motor vehicle into merely another commodity - like a furniture pitchman offering his "deal of the week."
At Chrysler, we intend to mitigate the pervasiveness of incentives from the consideration process when people contemplate buying one of our cars or trucks.
How will we do this?
By building pride in our strong existing product line and developing more truly "aspirational" and "inspirational" breakthrough products in every segment in which we choose to compete.
By building cars and trucks with design integrity, engineering thoroughness, advanced safety and, of course - more important than ever - detailed quality.
We want to pull our customers into the market with products that they will enjoy on their own merits because they offer real value, and not just push vehicles out into the marketplace - armed only with the attractive "deal of the moment."
And, we will accomplish this while using our financial resources wisely and efficiently.
To this point, our new $30 billion dollar, 5-year product spending plan - with five additional vehicles included - is obviously much less than the $42 billion dollar plan in place in the 5-year period a year ago.
You can see that our vigilant cost-containment policies are starting to pay huge dividends for us right where it counts the most - in our ability to deliver competitive, highly desirable products to market.
We have exciting new products either already at our dealers, like the Chrysler PT Cruiser, the Jeep® Liberty, the Dodge Ram pickup and many more, or in the pipeline, like the Chrysler Pacifica, our "segment-busting" sports tourer that defies traditional categorization, but impresses everyone who lays their eyes on it.
Or the Chrysler Crossfire, which is not only distinctive and seductive in its appeal, but is also a vehicle that is tangible proof for the future potential of our company, by exploiting synergies with our partners.
With 40% of its "under-the-skin" componentry coming from Mercedes-Benz, the Crossfire allows us to not only maintain Chrysler's brand character, but also to enhance it - all without compromising the integrity of the Mercedes-Benz brand.
Other projects with our partners include future Neon and Stratus/Sebring platforms - which we will develop jointly with Mitsubishi.
And, of course, we are hard at work developing high-performance spin-off models through our newly announced Performance Vehicle Operations, which will be our very own "AMG-like" division.
Exciting, best-in-class cars like the Dodge SRT4 Neon and dominating performance trucks like the Dodge Ram SRT10, which we introduced just last week.
As an engineer, I can tell you that many people at our company are extremely pumped-up about our "PVO" organization - and I think our customers will be, too.
We will also be extending our brand reach with an expanded vehicle lineup.
I will decline to be too specific here, but you can bet that the Jeep Willys2 concept, with its injection-molded body panels, and our dazzling new Jeep Compass concept will have an impact on our future product plans.
And, as we like to do now and then, we may also have some future "activity" vehicle surprises for our customers - and our competitors, too!
All in all, we're targeting a net effect of 1 million units higher annual volume in 5 to 10 years, which I think you'll agree is aggressive.
But, it's a goal that I believe is achievable, if we keep doing what we're doing.
Getting back to this week's topic of the "connected world," I have to admit that it conjures up a very specific set of images for me.
I think that clearly, the future of our business lies in how we, as a company, connect with our customers.
Besides the customers we have now, there's a whole new generation of customers getting ready to burst onto the automotive scene - the young "millennials" - and they'll bring a whole different perspective to our business.
They will have different needs, wants and desires - and we plan to be ready for them.
Last week, we debuted some concepts aimed right at these "millennials." The Jeep Compass, the Jeep Willys2, the Dodge M80 pickup and the Dodge Razor all do an excellent job of reaching out to and "connecting" with a new group of customers who will be with us for the next 50 years.
But even with this exciting new group of customers emerging, one thing won't change - the product is still the most important part of our business.
It has been that way since the very beginnings of the automobile business, and it will continue to be that way as long as it exists.
Having a great product is the "ultimate differentiator" in this, the most competitive automobile market in history.
Because, after all is said and done, beyond the importance of everything I have talked about tonight:
After all that, or anything else that's required or comes into play … when operating as a consistently successful automobile manufacturer, only one thing really matters: the emotional pull of a great product will always reign supreme.
At The Chrysler Group, we like to call it "disciplined pizzazz."
It means delivering nothing short of a breakthrough product in every segment in which we compete, and doing it with a style, verve and discipline that are second to none.
I'm very confident and excited about the future of the Chrysler Group.
After focusing on our Turnaround Plan in 2001, we have a firm grip on our costs going into 2002, and this will enable us to concentrate our resources and talent on the product.
And to help focus our energies on the product, we have a dedicated, motivated and superbly talented workforce ready to do whatever it takes to succeed - a group of people of whom I'm very proud.
We have a tremendous array of exciting and innovative products already in our showrooms, and more on the way - across a wide spectrum of segments.
Cars and trucks that are distinctively Chrysler,Dodge and Jeep in every respect.
Cars and trucks that will connect with consumers, both rationally and emotionally.
And that, at the end of the day, will differentiate between the "pull" and the "push" strategies that I referred to earlier.
Connecting with customers on both levels is the antidote to this incentive dependency.
It won't be easy. It will take time. It will take determination.
But, we are here for the long run. And, we believe it is the only way to really ensure the long-term health of our industry.
Thank you very much. Now I'll turn it over to Keith, and I'll be happy to answer your questions.