Sergio Marchionne’s introductory epistle [via the Detroit Free Press] isn’t blessed with the same opportunities for self-congratulation as outgoing Chrysler CEO Bob Nardelli’s. Instead, optimism is name of the game. And as Marchionne puts it, this isn’t the first time he’s stepped into “[what many perceived as] a failing, lethargic automaker that produced low-quality cars and was stymied by endless bureaucracies.” But, “through hard work and tough choices, we have remade Fiat into a profitable company that produces some of the most popular, reliable and environmentally friendly cars in the world.” Sergio thinks the same thing can happen at Chrysler. Could it possibly get worse?
To the Men and Women of the New Chrysler:
Today marks a new beginning for Chrysler and the North American automotive industry, as Chrysler Group LLC, a new company formed in alliance with Fiat Group, has completed its acquisition of substantially all of Chrysler LLC’s assets and will begin operations immediately.
It is my great privilege to greet you as your new chief executive officer and to join all of you in building a great future for the new Chrysler. Although we have many challenges yet to overcome, there is no doubt in my mind that we will get the job done. Chrysler will be back-strong and competitive and a rewarding place to work.
You have been through a great deal of hardship and uncertainty over the recent past and I want to start by recognizing your commitment to Chrysler and acknowledge the many sacrifices you have made to help get an American icon back on its feet. Because of your commitment, and the hard work of a range of interested parties, including President Obama and his Automotive Task Force, Chrysler is now a more focused and nimble company that will benefit greatly from its new global strategic alliance with Fiat. The new company moves forward with significant strategic advantages, including a healthy balance sheet, a competitive cost structure, a leaner and more efficient dealer network, sound supplier agreements and significantly improved product quality and operational efficiency.
For those reasons, today is a day for optimism. Chrysler, Jeep and Dodge vehicles will once again roll out of our plants, into our dealers’ showrooms, and soon thereafter onto America’s roads and highways. We have much to look forward to. But we must also not forget what we have learned. The past few years have offered several painful lessons on what it will take to survive in the modern-day automotive industry. The alliance is a bold first step to implement those lessons we’ve learned, but it is only a first step. Now we must prove we can make it work. We are already moving in that direction. Over the next several months, we will begin the process of transferring Fiat’s technology, platforms and powertrains for small- and medium-sized cars into Chrysler’s manufacturing facilities. This award-winning technology will be critical to helping Chrysler round out its product line and give the company a strategic advantage in many markets around the world. Work is already underway to develop new environmentally friendly, fuel-efficient, high-quality vehicles, including Chrysler’s electric-vehicle program. In the meantime, we will begin working together to find the most effective ways to combine our R&D and distribution networks so that we can begin to reap the many benefits this alliance will provide.
On the leadership side, we are very fortunate that Bob Kidder has agreed to serve as our board chairman. Bob is an experienced executive with a great track record of helping grow companies, and I’m looking forward to working with him. Several other Board seats will be filled in the coming weeks. We will keep you updated as appropriate.
As you know, Chrysler is now majority owned by the Voluntary Employee Beneficiary Association (VEBA). Fiat will initially hold a 20 percent ownership stake in Chrysler, with the ability to increase its ownership stake an additional 15 percent over time by delivering on its commitments to the company. The U.S. and Canadian governments own the rest.
Combined, Chrysler and Fiat today rank as the world’s sixth largest automaker, giving us the scale to compete and win in nearly every market in the world. But while this scale is critical, events have proven that only size managed well will be effective. I ask each one of you to take on a leadership role and work with me to restore Chrysler to being a fully competitive and profitable company once again. Numbers are important in assessing performance, but more important in my mind is how we lead people and lead change..
Five years ago, I stepped into a very similar situation at Fiat. It was perceived by many as a failing, lethargic automaker that produced low-quality cars and was stymied by endless bureaucracies. But most of the people capable of remaking Fiat had been there all the time. Through hard work and tough choices, we have remade Fiat into a profitable company that produces some of the most popular, reliable and environmentally friendly cars in the world. We created a far more efficient company while investing heavily in our technologies and platforms. And, importantly, we created a culture where everyone is expected to lead.
We can and will accomplish the same results here. The people who will lead that charge are for the most part already at Chrysler. We plan to bring that same drive and commitment to innovation to Chrysler as we look to make it one of the driving forces again in our industry.
I am confident that we can get there together.
Thank you again for your commitment to Chrysler. I look forward to meeting and working with all of you in the months and years ahead.
Sincerely,
Sergio Marchionne
we have remade Fiat into a profitable company that produces some of the most………reliable……..cars
Thanks for the laugh.
today is a day for optimism.
… and apparently it’s stand up comedy hour at Chrysler. I know Sergio’s got to say some outlandish things (that whole ‘fire up the troop’ thing), but at least maybe his words could have some connection to reality. No? Okay, carry on.
“Chrysler, Jeep and Dodge vehicles will once again roll out of our plants, into our dealers’ showrooms, and soon thereafter onto America’s roads and highways.”
Sergio’s translator left out how this magic trick (excreting the cars from the showrooms) will be performed.
meh…….just meh.
You know, I really want to be optimistic and support this company, but being union owned really keeps me from giving a shit. How is this company going to be profitable when it’s got to prop up UAW benefits?
“You survived the Germans … now we’re here”
Doesn’t anyone care about Jim Press hanging on?
If the Italians have to show America how to produce cars than we are at a all-time low.
Anybody got a copy of the speech that Chrysler got from Daimler when they took over? I’m curious how close the two speeches were.
I’d also be interested in seeing what they said and see where they fell short, based on what Daimler said they would accomplish.
Come on, RF, you must know where a copy can be found.
Its hard to knock Marchionne. He is a good CEO that knows what he is doing, and reading about how he handled Fiat gives me a lot of confidence in him. Sergio is known for cutting out the bureaucrats at Fiat and letting the talent down at R/D shine. Hopefully the same will be done at Chrysler.
“If the Italians have to show America how to produce cars than we are at a all-time low.”
hmmmm….maybe it’s time to blame Canada. Henceforth I shall refer to Chysler as a Canadian company.
On the plus side, if it sticks maybe we’ll get some of that soft white fur for the headliner in the next Grand Cherokee. I’d dig it, and I know you dirty bastards have got some extra up there…I’ve seen the videos. :P
He can keep his speech. Looks like a cliff notes version all CEOs can use. I could have written that. I write more sincere stuff when I’m trying to get laid.
Maybe you guys should give the guy a chance to succeed or fail, before roasting him.
@jason….well said……….Italian he may well be but I believe he was raised and educated in Canada.
@tedward I’ve got a lifetime supply of the white fur stuff and I’m not sharing.So there!
@Jason: Agreed. especially because Marchionne has more than proven himself as a capable leader. He is no Rick Wagoner.
I don’t know whether Marchionne will be successful or not. What I do know is that Fiat has been profitable since he turned it around, so he has a track record of turning failed auto companies into successful ones.
As the CEO of Fiat, he is also effectively the CEO of Ferrari. Y’all do like Ferraris, don’t you?
jolo said:
“Anybody got a copy of the speech that Chrysler got from Daimler when they took over? I’m curious how close the two speeches were.
I’d also be interested in seeing what they said and see where they fell short, based on what Daimler said they would accomplish.”
Let’s be clear about one thing: Daimler’s only intent was to raid the piggy bank at Chrysler, squeeze the lemon dry and throw away the rind when they were done. They were the ones who ultimately approved the vehicles everyone here likes to heap disdain upon – German decision making occurs at the top…underlings are there merely to execute the orders of top managment, not share their opinions.
If I see the phrase “environmentally friendly automobile” even one more time I think I’m gonna puke. The only automobile that fits that description is one that never makes it off the drawing board.
I like cars, I’ve owned lots, but I’m under no illusions about them being one of the most – if not THE most environmentally damaging gadget the human race has ever come up with.
akear:
I would say Ferrari, Maserati, and Alfa Romeo do know a thing or two about building passion and excitement into their cars.
With the exception of maybe the Viper and the Challenger, passion and excitement are notably missing from the majority of Chrysler’s products. Maybe the Italians are just what Chrysler’s product lines need to become interesting again.
-ted
Forget about the Ferraris and Maseratis, I want to get this thing focused back on the Fiat X1/9
can i ask what you guys think of marchionne’s executive compensation?
i hear he gets $4 mil. for running two companies now
that in my mind is stunning value especially considering how much those two shitheels wagoner and nardelli were paid
i’d also like to know how much carlos ghosn gets paid
the reason i bring this up is that i think on the whole european executive salarys are kept under check
while in the english speaking west people get away with $30mil.+ parachutes for messing companies up royally
on that sort of money alone i suspect a lot of american companies would do well to take on board european executives at the top
“If the Italians have to show America how to produce cars than we are at a all-time low.”
America’s MBA schooled automotive executives should be hanging their heads in shame at the horrific job they have done over the past several decades … but that gang didn’t learn anything about shame or reflection in business school.
“i hear he gets $4 mil. for running two companies now”
Which is plenty of money. One thing many American executives have largely forgotten is when enough is enough. They only know MORE MORE MORE for ME!
Yeah, Fiats are bad. But so are Chryslers. A guy who can turn a profit selling bad cars is exactly what Chrysler needs. Fiat also knows plenty about running niche brands like Alfa Romeo, Lancia and Ferrari. So that should be good news for Jeep at least. Fiat also has electric cars and hybrid commercial vehicles in showrooms and on the road right now, via their partnership with Micro-Vett. In my opinion this pairing makes much more sense than the one with Germans.
The CAW are saying that the Canadian Chrysler factories will be up and producing Cars by end of June, that being said, who is buying them?
How come none of the Canadian Chrysler dealers where “sacked” like the ones in the USA?
Here we have tons of them all over the place, some like in Toronto across the Street from each other, talk about duplication eh? Does anyone have the answer?
1) Remember that the Fiat Group turned around another failing American business: Case-New Holland, now called CNH Global, makers of heavy farm and construction vehicles.
2) The Italians have been leaders in bringing automotive technology to market for more than a century. For example, Fiat developed common rail diesel technology and now with their MultiAir technology they have the first system with real-time variable valve timing AND amount of valve opening. MultiAir Direct applies this technology to direct-injection gasoline engines and will likely be the technology they give to Chrysler. It gives good fuel economy at part throttle and good performance at WOT (and what’s an Italian car without the occasional Italian tune up?)
Reliability may not be a strong suit of Italian cars but their technology is typically cutting edge even on the cheap cars. (Which may explain the reliability issue!) For better or worse, Italian car companies have traditionally allowed the engineers greater due than companies from other countries (with engineers in the USA having the least leverage.)
H. Koppinen: Yeah, Fiats are bad. But so are Chryslers. A guy who can turn a profit selling bad cars is exactly what Chrysler needs.
Fiat sells unreliable cars in Italy, where standards regarding reliability are lower than they are here. Selling them in the U.S. is quite a different matter.
“Remember that the Fiat Group turned around another failing American business: Case-New Holland, now called CNH Global, makers of heavy farm and construction vehicles.”
I work for Case-New Holland (CNH). Case was a stand alone company before the owners of New Holland (being Fiat) bought Case and merged the two. Case by itself was profitable and growing prior to the merger. Post-merger things went downhill. Sergio then became CEO and CNH has rebounded. The catch was that if your name didn’t end in “i” or “o” you would generally not be considered for management. Fiat management style is very much the “I know what’s best for you, therefore I will micro-manage” type.
With Case as the historical example, Chrysler will be Italian.
Gee wiz, so much gloom and doom.
It’ll take a while, but I’m confident Chrysler stands a chance through this deal. As does Fiat, giving it a needed entry door into the NA market, which will be enlarged if the cars prove themselves.
Anyway, as I’ve said before, great news ’cause it means different choices will be had in the market. Reading this site I sometimes feel as though some people feel we should all just drive something German or Japanese and be done w/ it. Different strokes for different folks.
And again, anyway, if it results a pipe dream I just hope this doesn’t hurt too much Fiat’s ever expanding presence in other parts of the world.
Fiat sells unreliable cars in Italy, where standards regarding reliability are lower than they are here. Selling them in the U.S. is quite a different matter.
Also, elsewhere in Europe. But you’re quite right of course, American buyers put much more emphasis on reliability than European buyers. But I do think that this partnership does have some chance of succeeding. It’s not destined to fail.
The union does not own Chrysler. The VEBA (the retiree health plan) has a whole bunch of worthless stock and a non voting seat on the board. Besides, the International union forced us to take this crap.