While Ford has been dominating the auto world's headlines of late with news of its surprise $997 operating profit last quarter and the strength of its sales where it scored a 3.2 percent increase in sales last year, just behind GM's 3.7 percent hike, Chrysler has also been making its own waves.
Most notable was Sergio Marchionne's press conference yesterday where he described some aggressive plans to bring the struggling automaker back to profitability after its government-induced bankruptcy where it received an infusion of federal money to help it out of bankruptcy quickly. At the same time, Italy's Fiat purchased a 20 percent stake of the automaker to help in the bailout and is driving its turnaround. Marchionne is president and chief executive officer of Fiat.
Marchionne, speaking to the financial press yesterday, unveiled a five-year turnaround plan where he predicted that:
Sales would climb from 1.3 million to 2.9 million by 2014
Sales in the United States would rise from the current 950,000 to 2 million; internationally, sales would rise from 150,000 to 500,000
The market will rise from the current 10.5 million to 14.5 million in 2014
Chrysler's operating income would break-even in 2010 with an operating profit of $14 billion by 2014
Chrysler's net income would break-even in 2011 with a positive cashflow in 2011
All aid infusions from the United States and Canada would be repaid by 2014
Debt would fall form the current $13 billion to $8 billion by 2014
The plan certainly puts Fiat's fingerprints all over Chrysler's products, following the launch of a new Jeep Grand Cherokee in 2010. Here's an outline of Fiat's plan to turn Chrysler's product line around, starting with Jeep:
The new Grand Cherokee
All-new vehicles, based on Fiat platforms, will be available by 2013
A new, unnamed small SUV
Replacements for the Compass and Patriot
A new version of the Liberty
Meantime, at Chrysler, planning calls for:
A new 300/300C in 2010
Four new vehicles, to be engineered on Fiat platforms, including a new compact sedan, would be available in 2012
A new replacement for the Sebring by 2013
A new small car by 2013
Meantime, at Dodge planning calls for:
A new Charger in 2010
A new full-size crossover vehicle in 2010
All-new vehicles, built on Fiat platforms for 2012 and 2013, to include a new compact sedan
A replacement for the Caliber hatchback in 2011
A replacement for the Avenger in 2013 and an all-new small car.
A replacement for the Ram truck brand with two new commercial vans to be built on Fiat platforms in 2012
The phaseout of the Dakota pickup in 2011. Chrysler is considering a new car-based truck to take its place
Marchionne also noted that Chrysler will save another $2.9 billion by 2014 by sharing parts, including gearshifts, doors, mirrors engines with Fiat.
Meanwhile, today, Reuters reported that Fiat and Chrysler's European stocks are up 2.6 and .3 percent respectively.
The financial news service, from which much of the information for this story was gleaned, noted that an unnamed Milan trader called the plan well above consensus forecasts, in terms of volumes and sales, but while clearly ambitious, the market is betting on Marchionne to deliver.
Morgan Stanley was less enthusiastic in its analysis of the Chrysler plans which call for the $67.5 billion in earnings by 2014 and $5 billion in profit. It noted that Chrysler's plan was more positive than its own estimates.