Fiat/Chrysler CEO Sergio Marchionne is an agonizing character. There can be no doubt that he’s one of the smartest execs in the business, and yet he so often comes off as the stuffy, pedantic college professor, who sputters into ad hominem at the faintest sign of criticism. His speeches often revolve around stock speaking points and a copy of Bartlett’s Familiar Quotations, and as the video above proves, his delivery is rarely inspiring. But between the Einstein quotes and plaintive self-sympathy, Marchionne can offer moments of unexpected candor. His speech to Chrysler’s dealers earlier this week offered several such moments, and though it’s too long (and, frankly, boring) to reprint in its entirety (click here for the whole thing), here are a few stunners from the mind of Marchionne.
Marchionne opened his speech by referencing Chrysler’s last big dealer meeting: a Las Vegas blowout with the previous (Cerberus Capital Management) leadership.
As I was preparing these comments yesterday, I came across our daily press clippings, and in an article in Automotive News discussing the meeting we are holding right now, I found this statement from one of the American dealers in this room.
He was quoted as saying:
“Last time we did this was at a meeting in Las Vegas — guys named Press and Nardelli, and they came off terrific. Two years later they were selling us down the road. Even if these guys come off terrific, there’s still a healing process.”
And then it dawned on me that this is no ordinary dealer convention.
We have travelled a long road since Las Vegas. A lot of that road was uncertain, uneven, unpleasant and left all of us with a deeply felt sense of discomfort. It left no clear direction as to the future.
Fred Diaz, Reid Bigland, Joe ChamaSrour, Mike Manley, Pete Grady and Pietro Gorlier have done an outstanding job to bridge us to here. But it has been a bridge and we know it.
We also know that the healing process that the American dealer referred to goes beyond the relationship between Chrysler and its dealer body. What is ultimately needed is a reconnection to the heart of the market, of the brands to their customers.
And it was on that note that Marchionne dove into the lion’s den, referencing Pulitzer Prize-winning auto journalist Dan Neil’s characterization of the Chrysler experiment
We are seeking to restore credibility and confidence in a company whose past economic and commercial failures are still too fresh and vivid in the minds of the public to be forgotten.
There was an article written by Dan Neil, a Pulitzer winning writer in the Wall Street Journal a few weekends ago, evaluating our newest product introduction, the Jeep Grand Cherokee.
I think it is the very first time that reference is made to the literary trend of New Criticism in an automotive review. Pretty snotty intellectual stuff, but it is the Wall Street Journal after all. Just bear with me for a few moments.
New Criticism emphasized a close reading of the text, excluding factors such as an author’s biographical details, historical circumstances and other so-called extra-textual materials to arrive at an interpretation.
“At that time,” Neil writes, “this was a terribly good idea since criticism had reached a point where scholars were earnestly speculating about how Shakespeare’s bad breath might have influenced ‘Hamlet’. To New Critics, all that mattered was the text. And that brings us to the 2011 Jeep Grand Cherokee.”
And then the article begins a series of questions about the extra-textual aspects of our company: “Do we consider the swamp out of which this vehicle emerges—last year’s bankrupting of Chrysler, the auto bailout, the ignominious handoff from Daimler to Cerberus Management and now to Fiat? Can we somehow put out of our minds Chrysler’s current kennel of mangy mutts” like some of Chrysler’s obsolete models, that if you were to buy “you’d have to be an automotive pervert, a gerontophile? Is it possible for consumers to look just at the Jeep Grand Cherokee, the text of the thing, and forget the Italian-managed goat rodeo going on in the background? Well, I don’t know,” is Neil’s response, “but if they do, I think they’ll like what they see.”
By the way, do not worry. I too had to look up the meaning of gerontophile. It is a person who is sexually attracted to an old person. I just turned 58, and I so do not think it applies to me yet. But at least there is hope for the future.
The piece closes with another question: “But will people give it a chance? Perhaps. But only if Chrysler LLC can change the conversation, and fast. Repeat after me, Chrysler: 2009 never happened. It’s all about the text.”
I wanted to read this article to you for two reasons.
First, because I do not want you to think that I am suffering about any illusions or delusions about the context within which we are collectively operating. We know that the conversation about Chrysler up to recent days has not been about the text of the thing. It is been predominantly about our past, our misses, our failures to deliver onto customer expectations, and to be fair, about some of your own failures in delivering proper customer service to an ever more demanding market place.
But secondly, and more importantly, because all the presentations you have heard today from my colleagues have been about product, about the text of things. Forget about the music, and the lights, and the slides. The last seven hours have been about the text of things, about product.
Of course Marchionne can’t help putting down Neil’s “snotty, intellectual stuff,” but he’s also admitting that the critics are worth listening to. That’s not a position that Marchionne has embraced throughout his time at Chrysler, as he’s typically preferred the dismissive slam to the introspective reading. The tacit admission that his product lineup is a “kennel of mangy mutts” and that Auburn Hills is the site of an “Italian-managed goat rodeo” is the first time that Marchionne has confronted Chrysler’s issues on an honest level. Too often, Marchionne seems more pleased with himself for snagging Chrysler for free with a taxpayer ribbon on top than seized with the terrible reality of Chrysler’s image and products. His honesty and willingness to face the harshest critics (albeit in referencing a favorable review) is certainly heartening.
After all, who expects, candor and introspection from a dealer meeting?
If I had to guess, I would suspect that Marchionne has always understood these things. The product hitting the market right now is a huge improvement over the models being replaced. This is in significant part due to Marchionne and his management. You don’t fix problems without recognizing that the problems are there.
And right now, with a load of new or refreshed product hitting the showrooms, he can afford to be candid about the state of the outgoing product portfolio. It would have been difficult to do this a year ago without making the tough job of selling existing product even tougher.
“Heartening” is the word. Thanks for this Ed, I may be in a minority but I found it a fascinating glimpse into what’s going on inside the attempts to rebuild Chrysler.
Also since I don’t read the WSJ I’d have otherwise missed the priceless phrase “Italian-managed goat rodeo” which is just awesome!
They have done lots of things wrong, but I think Chrysler may have a brighter futre than GM. They will probably never have a much better market share than not but they should be able to make money eventually at today’s ahare. They have a lot less baggage than GM and much better management.
I have read the road tests of the new GC and it’s a pretty intriguing vehicle. If they can do as well with the rest of their lineup then who knows, it might be a real success story.
I read Dan Neil in the WSJ and while he often is a little too fond of his own writing (which comes through), overall he writes adequate “driver” reviews, while weaving in some context as well such as with this piece about Chrysler the organization, as much as about the new JGC. This car must have been in the works before Sergio was in the mix, I would think, so I think he can take credit for executing the final mile to launch but the design all pre-dates him.
It is good to see, though, that they’re not taking the “it’s a perception problem” angle like GM, and instead are saying the old perceptions were right. The first step to digging out of the hole is to admit how deep the hole is. I still don’t know if ChryCo will make it, not enough product and eventually the wolves are going to start nipping at heels, would think. And they didn’t cut enough dealers, nor have they fine tuned enough their portfolio beyond killing the real duds. But it is refreshing, at the minimum, to see a leader speak transparently to his/her troops. Not a lot of clips like that floating around on YouTube, far more are MBAspeak inspiration lite, which in the end won’t get them very far.
As I understood it, pretty much all vehicle development ground to a halt under Cerberus as things deteriorated in 2008. The GC was the farthest along of any of the projects and certainly had some solid work done on it pre-Fiat. That said, I would imagine that the final year of development was done under current management, which should be applauded. There would have been a million ways to cut costs and go cheap in the final version, but these guys (to their credit) understood that this was Chrysler’s core recent problem. These guys are willing to put some money in the vehicles where the customer can see it. Here’s hoping that now they can put more money where the customer can’t see it.
The more I read about this guy the more I like him. Imagine if Rick Wagoner was half the leader/exec that he has been so far.
+1 on the previous comment:
I can’t remember when I last read anything from an autoexec that was this candid and straightforward. Liking this guy more and more.
You have to hand it to Sergio for not focusing on last sentence in the penultimate paragraph in Neil’s WSJ review:
…the Jeep Grand Cherokee is a fine machine, a celebration, a victory. The Overland edition is an absolute steal.”
High praise, and actually supported by analysis in the preceding grafs.
I pretty much like Sergio and I think Chrysler is in good hands. But dammit I’m gonna be pissed if they tease the Jeep truck concept again and don’t put it into production. I got to see the Gladiator in person and have wanted one ever since.
Good article, Eddie. Lots of food for thought, and I, too, loved the ‘goat rodeo’ comment!