Tue May 6, 2014
Fiat Chrysler To Outline 5-Year Strategic Plan
Originally published on Tue May 6, 2014 9:34 am
STEVE INSKEEP, HOST:
It's a big day for Fiat Chrysler. The Italian-American automaker will outline a strategic plan for the next five years.
The marriage between two once troubled companies, Chrysler and Fiat, has surprised many in the auto industry by thriving - not just surviving. Now, the company is looking to build on its strengths, as Michigan Radio's Tracy Samilton reports.
TRACY SAMILTON, BYLINE: Five years ago, Fiat agreed to a kind of corporate shotgun marriage with a fresh-out-of-bankruptcy Chrysler. A lot of people thought Fiat's CEO Sergio Marchionne was crazy to do it.
Dave Sullivan is an analyst with AutoPacific. He also had his doubts.
DAVE SULLIVAN: It looked at the time like Chrysler was beyond any and all repair. I mean think about it. The Dodge Nitro? The Jeep Compass? There were some pretty sad products.
SAMILTON: But Sullivan says Marchionne apparently saw something others didn't. He first focused on transforming the biggest potential moneymakers - the Jeep and the Ram truck brands. It worked.
Today, the Ram pickup is gaining ground on the GMC Sierra. And Jeep brand is an automotive rock star, at least in the U.S. Sullivan says there's a lot of consumer demand for the Jeep Grand Cherokee and the Wrangler.
SULLIVAN: They can't make enough Jeep Wranglers. That plant is running full tilt in Toledo.
SAMILTON: Marchionne also threw more money into advertising to try to get people who had written Chrysler off to give it another look. And the ads were good and created some buzz. Lots of people remember this one with rapper Eminem that ran during the 2011 Super Bowl.
(SOUNDBITE OF MUSIC)
EMINEM: (Singing) This is the Motor City and this is what we do.
SAMILTON: Somehow, Chrysler's new CEO, a guy who was born in Italy, and grew up in Canada, knew the company could make Ram pickups quintessentially American, and that the slogan Imported from Detroit could be a good thing. Chrysler sold nearly 750,000 Jeeps last year, but most of them were in the U.S. Marchionne says the brand needs to enter new markets.
SERGIO MARCHIONNE: We need to take that number across the world and really find out how far we could take Jeep. It is an incredible brand. I think it has an incredible unexploited international potential and we need to take it there.
SAMILTON: So, two brands down, two brands to go. There's a lot more work ahead if Chrysler and Dodge are going to win back customers the way Ram and Jeep are doing. And the Italian side of the company has its challenges, too.
Richard Hilgert is an analyst with Morningstar and says Europe's recession hit Fiat's sales there hard.
RICHARD HILGERT: Marchionne had to turn around Chrysler and then had a similar crisis develop in Italy.
SAMILTON: So, to the surprise of people who thought Chrysler was nearly dead; it was Chrysler that ended up paying the bills, while Fiat's sales plunged 40 percent. Now, it appears sales are on the upswing in Europe.
Richard Hilgert thinks it's time for Fiat to focus a bit on some other potential moneymakers.
HILGERT: Alfa Romeo and Maserati have a lot of global brand recognition that this company has not capitalized on.
SAMILTON: But there's something else Dave Sullivan of AutoPacific would like to know about Fiat Chrysler - that is, who will take over from Sergio Marchionne in five years?
Marchionne is a kind of super-CEO. He's known to carry six separate BlackBerries to manage his workload. He runs a company with two headquarters, separated by an ocean, and does most of his sleeping on planes.
MARCHIONNE: We haven't really seen anybody kind of bubble up internally that could fill those shoes.
SAMILTON: But for now, five years in, the corporate marriage between two struggling carmakers appears to be beating the odds.
For NPR News, I'm Tracy Samilton. Transcript provided by NPR, Copyright NPR.