Fiat CEO: Chrysler worse than we thought
Executives will present a revised business plan in November detailing steps to recovery.
NEW YORK (CNNMoney.com) -- The situation at recently rescued Chrysler Group is even more dire than first thought, the CEO of Italy's Fiat -- which came to the aid of the U.S. automaker -- said Wednesday.
"We were surprised by how little had been done in the past 24 months," Sergio Marchionne told reporters in Frankfurt, Germany.
Chrysler will present a revised business plan in November, Marchionne told reporters.
"We have to be absolutely clear about what we want to do with Chrysler and, as a management team, where the organization is going to be in five years," Marchionne said, according to the industry newspaper Automotive News.
Unlike General Motors, which has continued to roll out new and redesigned products even as it entered and exited bankruptcy, Chrysler has had little to tout. Its most recent new market entries are the Dodge Challenger muscle car -- essentially a re-bodied Dodge Charger sedan -- and the Ram pick-up.
The only new product Chrysler has entering the market this year is an industrial-duty version of the Ram truck. After that, a new version of the Jeep Grand Cherokee mid-sized SUV isn't expected until the middle of next year.
Even if the Grand Cherokee is a terrific product, its timing is unfortunate, said Michelle Krebs, senior analyst with Edmunds.com.
"The 2011 Grand Cherokee is an SUV being launched into a market that doesn't favor SUVs," she said.
In terms of smaller cars and more fuel-efficient crossover SUVs, nothing is expected from Chrysler in the near future.
Industry analyst Todd Turner of Car Concepts Automotive Research, speaking from the floor of the Frankfurt Motor Show, found it difficult to believe Marchionne's assertion that he didn't know how little work had been going on at Chrysler.
"I'm a little surprised that he was surprised," he said.
More likely, Turner said, Marchionne is laying the groundwork for drastic actions that will be announced in November but may have been planned all along.
"That is that Chrysler is over, basically," he said of Chrysler's flagship car brand. "Within five years, you're going to see nothing."
Chrysler also makes Dodge and Jeep vehicles.
Even if the Chrysler name survives, Turner predicted, the vehicles marketed under that name will be Fiat products.
On the other hand, Marchionne may simply be enjoying his freedom to be more honest now that the Chrysler deal is completed and laying the groundwork to make himself and Fiat seem all the more like saviors. suggested James Bell, market analyst for the auto Web site KBB.com.
"If they didn't come in as the proverbial white knight, Chrysler would be going through liquidation right now," he said.
Chrysler had no comment about Marchionne's statement to the press.
In its deal to rescue Chrysler, Fiat took a 20% stake in the struggling automaker in exchange for partnering with Chrysler on new products, especially small and mid-sized cars . Fiat did not invest any cash into Chrysler and, Marchionne told reporters, does not plan to do so now.
He said he hopes no outside investment will be needed as part of the new restructuring, according to Automotive News.
Marchionne said he expects U.S. auto sales, industrywide, to total about 11 million vehicles next year. If demand doesn't go up to that level, from the current level of roughly 10 million units, Chrysler may have to close more factories, he said, according to the newspaper.