Fiat’s grand plan for Chrysler leaks out
BY TERRY MARTIN | 2nd Nov 2009
Details of the plan were leaked to the Wall Street Journal ahead of this week’s six-hour presentation at Chrysler headquarters in Auburn Hills, Michigan, where Mr Marchionne – who is also chief executive of Fiat – is expected to confirm that Chrysler will sell a version of the Fiat 500 small car in the US from 2011 and that a medium-sized sedan shared between the two marques will be released in 2012.
According to the report, which cites people briefed on the plans, Chrysler will phase out several models including at least four Dodge passenger vehicles – the Caliber compact, Nitro SUV, Avenger sedan and Grand Caravan people-mover – and several Jeep models, including the Commander, Compass and Patriot.
The Challenger muscle-car and the Charger large sedan are scheduled to remain, leaving Dodge as a performance brand, while slow-selling models in the mainstream Chrysler range – the PT Cruiser, which recently won a stay of execution, and the Sebring medium-sized sedan – will reportedly exit the market by 2012.
The report said the Fiat 500 would be built in Mexico and introduced to the US market during 2011, while Alfa Romeo also remains on track to return to the US in 2012 after pulling out in the mid-1990s.
It is anticipated that Alfa will launch with the MiTo compact and expand the range in 2013 with the 147-replacing Milano small car and a still-to-be-named medium-sized sedan. All three vehicles are expected to be built in North America.
According to the report, Chrysler plans to introduce a compact car and its version of the all-new mid-size sedan in 2012 – the latter is understood to be a premium model that will compete with the likes of Audi and Infiniti – as well as a compact Jeep a year or two later. All three reportedly will be based on Fiat underpinnings.
This week’s announcement comes four months after the Chrysler Group exited Chapter 11 bankruptcy. Fiat currently holds a 20 per cent stake in the company and, as the plan shows, is leveraging its own technology where possible rather than channelling funds into current ageing model range.
The US government has provided Chrysler with $US9 billion ($A10 billion) in loans and the company is aiming to return to profitability within two years.
Chrysler has undergone a massive management restructure since June and is downsizing its workforce, with another 23,000 factory workers offered buyouts or early retirement last Friday as the company continues to cut costs and meet the terms of its loan agreement with the US treasury.
According the WSJ, Mr Marchionne has staked his reputation on the turnaround and appears to be creating a line-up that “stays true to Chrysler’s strengths in blue-collar muscle cars and pick-up trucks while adding European-styled vehicles to attract a new, more white-collar customer”.
It said the challenge was to keep Chrysler afloat until 2012, when the bulk of the new offerings will arrive. Until then, Chrysler will rely on current models and minor upgrades, such as a facelifted Jeep Grand Cherokee and Chrysler 300C sedan due out in 2010.
