True story: New Chrysler’s Italian boss has promised America’s taxpayer/owners that the former bankrupt will release its “five-year plan” on November fourth. Setting aside the laughable idea that Chrysler has enough money to survive ’til 2011 (never mind 2014), one wonders whether the CEO of a multi-billion dollar automotive conglomerate could be that ignorant of history, or that good at post-modern irony. Lest we (or he) forget, the Soviet Union’s Gosudarstvennyi Komitet po Planirovaniyu (GOSPLAN) pretty much coined the phrase “five-year plan” when they tried to force the state-controlled Russian economy to do . . . whatever they told it to do. And how did that turn out? “Altogether, there were 13 five-year plans,” the Wikipedia hive mind reports. “The first one was accepted in 1928, for the five year period from 1929 to 1933, and completed one year early. The last, thirteenth Five-Year Plan was for the period from 1991 to 1995 and was not completed, as the Soviet Union was dissolved in 1991.” Not to put too fine a point on it, the USSR’s five-year plans were a monumental failure; an effort at social control that resulted in misery (e.g. starvation, forced migrations) for millions of people. Marchionne’s use of the term is about as bad as it gets without evoking Godwin’s Law. Still, can’t wait!
Five year plans are also very common in business. The Soviets didn’t have a lock on the idea of strategic planning.
The plan itself should be quite simple. Allow me to demonstrate with one of my own. In 5 years I plan to lose 40 pounds, increase my net worth by 5000 percent and get 10 years younger. See? How hard is that?
John Horner is right. I used to do five year plans when I was in the railroading business; they were usually way wrong before the five year period even started. It’s a good idea to plan and be orderly, but five years is impossible when you have technology cycles that last maybe 18 months.
As for Chrysler, let them have at it; Cereberus was obviously winging it and Daimler probably was as well near the end. The trick for Chrysler will be where to find the money, Chrysler/Daimler/Cerberus and now Fiat’s eternal search for the Holy Grail.
I predict in the next few years, Chrysler’s fortunes could experience a Great Leap Forward. But it will need a Cultural Revolution first.
You know, Fiat may do something big…. like actually spending money on Chrysler, if that doesn’t happen, then we may have a problem.
In a business with the development time and cost of the Automotive Industry, if you are not planning 5 yrs out you are not planning at all. Are the 4th and 5th years carved in stone? of course not, but they serve as targets that get better defined each year. I don’t get this article at all, no relation to the soviet union.
The link between Fiatsler and the Soviets’ 5-year plans is in terminology only.
Just so the Chrysler plan doesn’t mention the word “Sebring” after Year 1.
What’s with all the skepticism? Chrysler’s car warranties are longer than that! BTW, how did they open the rear doors on that Cirrus concept?
Fiat and Chrysler? Pee and poo. Neither brand is known for its quality or reliability.
“BTW, how did they open the rear doors on that Cirrus concept?”
The magic Chrysler remote control, of course. Chrysler is #1 in advanced technology! Also, #1 in customer satisfaction.
I think the remote control is part of the ‘TSi’ package. Lemme check…
Good business practice is to update the five year business plan annually. You have to be thinking that far out to manage an industrial business, and obviously things change along the way. It is, however, very important to have a basic blueprint for the business which everyone can derive their departmental and individual plans from. Five years is actually a fairly short time horizon for an automotive company considering the lead-times involved in major decisions.
I once worked for a famous tough guy Silicon Valley CEO who used to like to say: “The plan is the plan is the plan. It’s like your mother’s birthday. It doesn’t change, and you had bleep well better not forget it.” Of course at said company the tactical plans were updated every quarter, strategic plans every year and product development plans covered the expected product life cycle.
Good planning is really, really important. Even automotive enthusiast websites could stand to have them.
If you haven’t the mental fortitude to figure out that it’s interior to the door, and a suicide-type mechanism; you haven’t an intellect at all.
Year #1 2009/10. Do nothing at all. Collect tax payer money.
Year #2. 2010/11. Continue to do nothing. Say you need more taxpayer money. Congress, right before 2010 elections, gives it.
Year #3 2011/12. Still doing nothing, but talk to Chinese about buying Ram/Jeep.
Year #4 2012/13. Actually sell Ram/Jeep. Close everything else down.
Year #5. There is no year 5.
Chrysler needs to die immediately. They can’t compete at all.
Starvation and forced marching is exactly what Chrysler needs right now, especially the people who greenlite the Sebring.
Hey lookee, Ma! That car doesn’t which end is forward! And no matter which way it goes, it’s got suicide doors!
This company is dead. I will be thoroughly disgusted if the true 5 year plan is that they keep taking out tax money every season.
Reminds me of my favorite Jennifer Granholm line ever, “In five years….you’re gonna be blown away”
The difference was the Soviet Union couldn’t plan because it didn’t know much to produce, who to produce it for or how to get it somewhere to be used.
What company / department / team doesn’t have a five year plan? Seems very normal to me.
FIAT was the Soviet Union’s favorite western company. They built a plant in the the old USSR to turn out Russianized sedans.
What company / department / team doesn’t have a five year plan?
Chrysler.
I’m thinking the Five Year Plan will center around strategies to get suppliers to give them parts:
2009-2010 – Sue suppliers to keep supplying parts under contract for current vehicles
2011 – Shop suppliers to see who’ll supply parts for upcoming vehicles.
September 2012 – Since no one will supply parts to Chrysler, about two months before the presidential election threaten to permanently shut down Chrysler.
October 1, 2012 – The PTFOAS (Presidential Task Force on Auto Suppliers) will force Chrysler’s suppliers to take a $1M gov’t loan; the gov’t will take a 60% stake in each supplier.
October 2, 2012 – Chrysler gets parts!
December 20, 2012 – Chrysler introduces the stunning Chrysler 200 concept as the Lancia Vulva to resounding accolades.
December 21, 2012 – The end of the world according to the Mayan Calendar.
Year 1 – (2010) Chrysler finally fades into extinction.
Years 2 through 5 – Automotive mags pay tribute to Chrysler in a segment called “The Rise and Fall Of Chrysler”.
Apple uses ten year business plans, the last one started with the introduction of the ipod (making apple the ecosystem), think that worked out ok for them.
Yes all businesses do it, you update every year, it’s just a matter of whether you start with realistic goals and assumptions and the same when you update. The soviets…we will increase steal production 1000% with 100% efficiency and will only produce enough iron ore for this and all distibutions will be based on this. So if they only increased 500% at 80% eff. someone on down the line (usually the consumer portion of thier economy) went without.
John Horner is right. Planning is very important to any enterprise. Even personal ones.
What worries me is:
1) Will Chrysler have the time/money to execute it?
2) How will their lineup look if they do so.
WetWilly: your “plan” is a laugh riot!
Lorenzo: Since it’s a concept, the rear doors likely don’t open. Or they’re solenoid actuated like hot rods with shaved handles. Or suicide clamshells. Or since the whole concept was a riff off a previous Chrysler concept (from when Chrysler “owned” Lamborghini) they worked like this
Planning and five year plans are very important in any business. Some will say that shorter term plans are better, I say you need them all. Heck I have even participated in some 15-20 year planning.
I continue to believe that Chrysler has a better chance at survival than GM. I believe that for two reasons. 1)Chrysler is a lot smaller which makes it much easier to implement changes. 2)Fiat, no matter what you think of them, at least they are an outside influence.
Planning is the great American shibboleth. We tend to greatly overrate its utility. A five year plan for, say, sewer system maintenance can be practical. A five year plan for an automobile company, especially one as beset with grave challenges as Chrysler, is almost entirely speculative. And being speculative, it will certainly be optimistic. (Who on the inside ever dared to forecast a company’s bankruptcy?)
How many five year plans allowed for shifts in customer preference to imports? Katrina and gas price shocks? The real estate construction bust? Financial system crises? Mideast conflicts? Or, for that matter, the marketplace flops of the Five Hundred, GM minivans, Sebrings, etc.?
I have no serious interest in a wishful fantasy called Chrysler’s five year plan. Show me their five month plan for survival. The wolf’s at the door.
I was at my Jeep dealer this morning getting something minor done in their service department. While I was waiting I walked through their lot that as long as I’ve been a customer has had a lot of vehicles, but now it only had less then half what it use to. They had almost no cars, just mostly Rams, Wranglers (they had hardly any Wranglers just a few weeks ago) and then Challengers, and as well a few Liberty’s, mini-vans, a couple Nitro’s and 300s, one Dakota, and that was it.
They had no Grand Cherokees, Commanders, Patriots or Calibers. I wondered if they simply didn’t want a lot vehicles as they use to and order as they can sell them, or just couldn’t get them?
“If [discounts are] the only way I can sell them, I’d prefer not to produce them because I’m not making any money.”
— Chrysler CEO Sergio Marchionne
‘Don’t believe everything you hear about Chrysler’s sorry state, says Sergio Marchionne.”
http://www.theglobeandmail.com/report-on-business/chryslers-marchionne-gears-up-for-rebound/article1315878/
Airhen – inventory is thin because the factories were closed due to C11. Inventory levels may not go back to where they were pre-C11 if the statement above is to be believed.