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Phil LeBeau: Marchionne's Chrysler Surprise: A Weaker than Expected Company

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Posted By:Phil LeBeau
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Chrysler CEO Sergio Marchionne candidly admits the troubled American auto maker was far weaker than expected when he finally took over as CEO. I caught up with him at the Frankfurt Auto Show, and he pulled no punches in assessing what he found at Chrysler when he became CEO.    more-bullet.gif Read More


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Chrysler CEO Sergio Marchionne candidly admits the troubled American auto maker was far weaker than expected when he finally took over as CEO. I caught up with him at the Frankfurt Auto Show, and he pulled no punches in assessing what he found at Chrysler when he became CEO.

"There is a whole pile of stuff that we saw when we came in that we were not expecting. Probably the single largest surprise to us that happened in the last 24 months (was what was needed) to get this machine competitive," said Marchionne.

In other words, Chrysler was a shell of company. Sure it had 9 % of the U.S. market with a strong, untapped brand in Jeep, but otherwise it was a company withering on the vine. Marchionne told me, "I think it (Chrysler) was distracted by a variety of issues, the prices in 2008, and I think to reconstitute the organization to try to fight again has been more difficult than I thought."

That said, Marchionne has wasted no time stripping out the bureaucracy at Chrysler and pressing Chrysler and Fiat to have more clarity about future plans. And while Chrysler may have been a mess when Marchionne took over in June, he's confident the folks in Auburn Hills can fix the auto company. He said, "We are sitting here 90 days after the start and I feel a lot better now. I think that the team is in place most of it is right so lets keep on flying."

Fixing Chrysler will take time. Marchionne knows that. But he's not wasting time. In November he'll outline the joint product strategy of Fiat and Chrysler. While all indications are we won't see any new Chrysler models for a coupe years at the soonest, Marchionne is being coy. When I asked him about Chrysler not having any brand new models in the pipeline, he smiled, and said to me, "Who says? We'll see in November."

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Just something I was wondering: Is Chrysler's current compact and midsize FWD platforms complete rubbish or are they potentially salvageable platforms that were undermined by cost cutting measures and bad decision making? If they are salvageable, would it speed up product development if Fiat/Chrysler would simply use significantly improved/upgraded versions of these platforms to underpin the next generation of FWD compact/midsize products for Chrysler's brands? I find it hard to believe that some suspension tuning/handling tweaks, modern engine/transmission combos, sound deadening efforts, and significantly improved interior designs/treatments can't fix the major issues of these platforms (along with some badly needed desirable exterior designs). The current Sebring and Avenger were crowned IIHS Top Safety Picks recently, so it seems that the platform should be a solid starting point (at least from a safety viewpoint) to create new midsize products. Maybe this is the direction that should be taken for the immediate future in an effort to get new products to market as soon as possible. The alignment and integration of Fiat and Chrysler platforms and technology could then be an ongoing process that can be completed on a long term basis. Chrysler's brands (Chrysler, Dodge, and Jeep) need new and competitive products as soon as possible; if this would be an efficient and effective method that allows new and competitive products to emerge sooner, then I would definitely take this route. Of course, this all depends on whether the basic components of the platforms are solid enough starting points on which to build products that would be on par with future products from the company's competitors.

Edited by cire
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Just something I was wondering: Is Chrysler's current compact and midsize FWD platforms complete rubbish or are they potentially salvageable platforms that were undermined by cost cutting measures and bad decision making? If they are salvageable, would it speed up product development if Fiat/Chrysler would simply use significantly improved/upgraded versions of these platforms to underpin the next generation of FWD compact/midsize products for Chrysler's brands? I find it hard to believe that some suspension tuning/handling tweaks, modern engine/transmission combos, sound deadening efforts, and significantly improved interior designs/treatments can't fix the major issues of these platforms (along with some badly needed desirable exterior designs). The current Sebring and Avenger were crowned IIHS Top Safety Picks recently, so it seems that the platform should be a solid starting point (at least from a safety viewpoint) to create new midsize products. Maybe this is the direction that should be taken for the immediate future in an effort to get new products to market as soon as possible. The alignment and integration of Fiat and Chrysler platforms and technology could then be an ongoing process that can be completed on a long term basis. Chrysler's brands (Chrysler, Dodge, and Jeep) need new and competitive products as soon as possible; if this would be an efficient and effective method that allows new and competitive products to emerge sooner, then I would definitely take this route. Of course, this all depends on whether the basic components of the platforms are solid enough starting points on which to build products that would be on par with future products from the company's competitors.

Perhaps... Chrysler's existing new platforms might even be better than Fiat's from a safety perspective.

The Patriot/Compass, Caliber, Sebring/Avenger, and Journey all have "good" structures in the IIHS side test, a rarity among car makers. But some of those vehicles test poorly without the optional torso airbags.

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