Staggering a year ago, Chrysler tests a new swagger
Tuesday, January 11, 2011
DETROIT - A new portfolio of Chrysler cars and trucks was rolled out here Monday with music by Eminem reverberating and images of ebullient executives broadcast onto mega-screens flanking the stage, a remarkable display for a company that just a year ago had been nearly left for dead.
Last year, no amount of glitz and leggy women could cover up the emptiness in the Chrysler lineup at the North American International Auto Show. Its product had been depleted by years of financial turmoil, and the company's feeble marketing efforts here, rather than piquing interest, cast a funereal pall.
But Chrysler, still infused with $5.8 billion in U.S. loans and led by Sergio Marchionne of Fiat, has shown signs of life - 16 new or revamped cars and an operating profit - and this year, company executives trumpeted a return and held forth with a swagger that seemed inconceivable a year ago.
"There's not a guy in the auto industry who thought we could do this," Marchionne, the normally subdued chief of the company's revived product lineup, said in an interview. "If I can't sell these cars, I can't sell anything."
Still, the U.S. rescue of Chrysler remains a gamble, and it is far too early to judge the success of the Obama administration's decision in 2009 to invest in the company and to force it into a corporate marriage with Fiat.
Chrysler was in key ways far worse off than its bailed-out rival General Motors, and it remains so. GM pulled off a triumphant return to public stock markets in November and is well on its way to repaying its federal rescue after achieving a profitable 2010.
By contrast, Chrysler is expected to report a net loss for the year, when accounting for its interest payments to the government. Its entire $5.8 billion federal rescue remains outstanding. The company is supposed to pay back the first $2.1 billion by the end of the year.
It also is unclear whether consumers will take to its new portfolio of vehicles, which includes revamped stalwarts such as the Town & Country and Grand Caravan minivans, as well as its "flagship" sedan, the Chrysler 300, which company officials said they hope will revamp Chrysler's image.
Perhaps as important is whether the company can successfully build and sell a fleet of smaller, more fuel-efficient cars. Fiat announced Monday that it had been able to raise its stake in Chrysler to 25 percent from 20 percent after beginning production of a four-cylinder engine for a new small car called the Fiat 500. Building the engine had been one of the milestones set by the U.S. government as Chrysler emerged from bankruptcy in 2009.
That leaves the United Auto Workers' health-care trust with 63.5 percent of the company, the U.S Treasury with 9.2 percent and a group of Canadian governments with 2.3 percent.
Marchionne's plan for this year is bold enough, especially for an executive who has chastised the industry for building too many cars. Chrysler sold 1.6 million vehicles last year, and his goal for 2011 is a 25 percent jump to 2 million.
So far, company executives say they see signs of the company's new vitality. Counted among recent successes are the Jeep Grand Cherokee, sales of which were up 68 percent over last year, the Dodge Durango and the Dodge Charger.