Chrysler’s Master Plan

Yesterday was D-Day for Chrysler and Fiat’s CEO, Sergio Marchionne, to present his five-year plan for Chrysler. Reportedly, for more than six hours, Marchionne and his lieutenants PowerPointed their way to the future. There was much live-blogging and tweeting of this event, which sounds as though it was astonishingly dull and intensely granular, if utterly necessary given the relative lack of information that’s emerged from Fiat-controlled Chrysler since the company emerged from bankruptcy.

The New York Times provides a breakdown. What’s most important is that Chrysler isn’t currently burning through as much money as some have speculated; it still has almost $6 billion cash on hand. It also figures it will be making $5 billion a year in profit by 2014 and raise its market share from a current 8 percent to 14 percent (just for perspective, General Motors' market share is currently about 20 percent).

The strategy for achieving what some might call patently ridiculous goals is as follows: Fiats will be sold as Dodges, Fiats will be sold as Chryslers; Fiats will be sold as Jeeps; Ram has been re-styled as a stand-alone truck brand; and $3 billion in savings will be achieved through combined Fiat-Chrysler purchasing. The IPO won’t come until 2011

If you were to accuse Fiat of setting Chrysler up to function, essentially, as a Fiat re-badging and distribution channel in North America, no one would say you were too far off the mark.

The Fiats that are coming, and that will be sold as Chryslers, Dodges, and Jeeps, are going to be strange machines, Italo-American hybrids, Chrysleriats. What they may very well have going for them is a certain design flair and more fuel-efficient engines, which will matter by 2014, when the EPA’s new CAFE standard of 35.5 mpg across vehicles fleets will come on line. What they won’t necessarily have going for them is enough brand identity to yield a wildly ambitious 14 percent market share. Consider that at the moment, there is exactly one Fiat vehicle that’s generating excitement in the United States: the BMW Mini-killing 500, scheduled to arrive late next year.

But we’ll see. Marchionne has already proven himself to be an adventurous global manufacturing executive. Now he’s shown that he can also lay out a very detailed battle plan. He’s sort of like Eisenhower and Montgomery, rolled into one appealing rumpled, be-sweatered and chain-smoking package. Now we’ll see whether he can also do Patton and take his plan to the field.

As an aside, there’s something kind of amusingly out-of-sync with Marchionne and the way this first big media statement of Chysler’s recovery was staged. It consumed nearly an entire working day and constituted a marathon press conference. Something like that doesn’t really fit with the Twitter-fied ways that these events are now covered. And yet, Twitter they did. But Chrysleriat rolled out so much detail it was impossible to live-blog or Twitter any kind of theme or theory. For this kind of big-B Business presentation, even old-school journalism struggles to lay it all out in a coherent way. Chrysler’s plan is actually the type of thing that cries out for lengthy study, so that the key elements can be focused on.

This could be a signal of the way that Marchionne intends to do business with the media—not briskly, but in accountant-level detail. You could see this as a kind of CEO jujitsu, creating a condition of semi-permanent confusion in auto- and business media that just want to know, know, know. It’s clever, it’s serious, and it’s new. But in terms of seeing the auto industry as a form of entertainment, it’s a thorny new challenge.