The Chrysler Five Year Plan (November 2009)

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Chrysler Unveils Five-Year Plan, to Repay TARP by 2014

Just months after exiting a government-assisted bankruptcy, Chrysler Group LLC, the smallest of the Big Three U.S. automakers, said it will break even by 2010 and will pay back its TARP loan in full by 2014.

Italian automaker Fiat S.p.A. has majority control of Chrysler, and CEO Sergio Marchionne—who led a similar turnaround at his company earlier this decade—will lead the transformation at Chrysler.

“Fundamentally, this thing needs to earn its right to survive as a competitive American carmaker,” Marchionne said at a Nov. 4 conference at Auburn Hills, Michigan, to present Chrysler’s business plan, as published on its Web site.

“That is the real target,” he continued.

For the first time since its bankruptcy, Chrysler unveiled its five-year rebuilding plan to the public. Marchionne, who has the blessing of the U.S. and Canadian governments and the United Auto Workers union, has grand plans for the company, including doubling sales by 2014.

In his presentation, Chief Financial Officer Richard Palmer projects that sales will more than double from 1.3 million vehicles sold in 2009 to more than 2.8 million vehicles sold by 2014 across all regions, according to a presentation provided by Chrysler.

The company also targets U.S. market share growth from less than 9 percent this year to more than 13 percent by 2014. Palmer said that Chrysler plans to break even operationally in 2010, and plans to spend more than $23 billion in research and development to develop new cars and automotive technologies over the next five years, including refreshing 75 percent of the company’s models.

Chrysler hopes the spending will boost its image and rapport with consumers—many of the company’s Chrysler and Jeep models need new designs. Marchionne conceded at the conference that Chrysler’s silence during the months after its bankruptcy has hurt its market share and sales—which last month were almost 40 percent below last year’s.

But not all stakeholders agree with the company’s assessment. In a recent report on TARP, the U.S. Government Accountability Office said the “Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially above what they have been in the past.” The Treasury currently holds a 9.85 percent stake in the company, and is closely monitoring Chrysler’s finances and personnel movements.

Last Updated
Nov 5, 2009

Article Link:Epoch Times - Chrysler Unveils Five-Year Plan, to Repay TARP by 2014

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Belvidere Mayor Reacts to Chrysler 5 Year Plan

Thursday, Nov 5, 2009

"It was seven hours of intense documentation" says Belvidere Mayor Fred Brereton.

Mayor Brereton is still digesting all the information from his visit to Chrysler headquarters.

That’s where the five year plan for the automaker was announced.

"If Chrysler is successful with their work plan as laid out yesterday they're going to be a very powerful company in the United States" says Brereton.

One of the components of the plan is remodeling the dodge caliber, and the jeep patriot and compass.

All three of those are made at the Belvidere plant.

"They’re going to start with improvement to existing vehicles that shows a level of importance we have here" says Mark Williams, Executive Director of Growth Dimensions.

But some of the improvements will only last a couple years because the company plans on discontinuing all three models by 2012.

"There are no guarantees on anything and even if you have a five year plan that doesn't guarantee what you'll be doing in twelve months but it does establish your objective" says Brereton.

The current three Chrysler models will be replaced with fiat products that are under development.

And unlike before, Brereton says the company will now build based on demand and have no more then a 60 day supply.

"We can only for the best hope the local economy support the automobile industry and hope the United States will support the automobile industry" says Brereton.


LINK:Belvidere Mayor Reacts to Chrysler 5 Year Plan

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Chrysler plans for 400+ hp V6


November 6th, 2009

By 2014, Chrysler could have a V6 engine pushing out over 400 horsepower, according to charts in the five year plan. A three-liter version of the Pentastar V6 with dual turbochargers is charted out in the plan at around 425 horsepower, the same as the old 426 Hemi V8 and similar to the current 6.1 liter Hemi V8. While the 6.4 liter Hemi V8 would push out more horsepower, the V6 would, even with a single turbocharger, match the 5.7 liter Hemi V8. Torque has not been discussed.

The Pentastar V6 was designed to have variable cam timing and direct injection. It will debut (without direct injection) on the Jeep Grand Cherokee around May 2010. The higher-horsepower varieties discussed in the plan would include MultiAir and would be released by or in 2014. Before then, the Pentastar would have replaced all other Chrysler V6 engines.

A turbocharged version of the World Engine with direct injection also appears on the chart putting out around 300 horsepower, more than the standard 3.3 or 3.6 liter Pentastar V6. Fiat’s 1.4 liter engines were shown at a respectable 150 horsepower with turbocharging, 100 hp without. Chrysler has already sold a turbocharged version of the World Engine, in the Caliber SRT4.



LINK: Chrysler plans for 400+ hp V6 | Allpar Chrysler, Dodge, and Jeep News

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November 6, 2009

Chrysler to overhaul lineup


AUBURN HILLS, Mich. -- Chrysler plans to overhaul its cars with technology from its new Italian partner, Fiat SpA, and says it has the cash to pay for it, helped by the U.S. government and lower costs.

CEO Sergio Marchionne, who also runs Fiat, began unveiling Chrysler's new five-year business plan on Wednesday. The plan includes new vehicles for the Chrysler, Jeep, Dodge and Ram brands, most based on Fiat's more efficient transmissions and small engines.

He said the troubled company's cash has grown by nearly $2 billion since it exited bankruptcy protection in June, and its operations broke even in September because of savings from job cuts and factory closings by the prior owner and through combining Chrysler and Fiat's operations.

But future growth hinges on offering better cars. The company's mid-sized sedans, the Dodge Avenger and Chrysler Sebring, along with many other models, have flopped. Chrysler said it will update these cars to make them more comfortable and quieter, then replace them in 2012 with Fiat designs. That could make Chrysler competitive in the largest part of the U.S. car market.

Besides the midsize car, Chrysler will introduce four new Dodges by 2013. They include a seven-passenger crossover vehicle, a mini-car and a compact.

Ralph Gilles, the company's chief designer, said the Dodge brand will have crisp handling, be quieter, more fuel-efficient and have more luxurious interiors.

Updated lineup

The Chrysler brand also will get six new vehicles, including a Fiat small car and a new mid-size crossover in 2013. The automaker is also considering adding a mid-size pickup to its Ram truck lineup.

The company plans to lower sticker prices to boost sales and generate more cash as it fixes its struggling lineup.

Doug Betts, senior vice president of quality, said that work is under way to tackle quality problems, too.

"We get it," he said. "We're not in denial related to the public record for quality for Chrysler."

Aaron Bragman, an auto analyst with IHS Global Insight, said there were many questions remaining, including what the vehicles will look like and how Chrysler will pay for such a major turnaround. Marchionne has said Fiat wouldn't contribute any of its own money to Chrysler.

"I want to see if the vehicles they'll be producing two years from now are going to resonate," Bragman said.

It will be tough to win back car buyers, who are skeptical of Chrysler's quality. The automaker's sales are down sharply this year as buyers flee to other brands and a weak U.S. economy curbs demand for autos. Chrysler lost upward of $8 billion last year and would have run out of cash without government help.

Marchionne's Fiat, which now owns 20 percent of Chrysler with an opportunity for more, was put in charge of rescuing the 84-year-old automaker by the U.S. government, which so far has provided roughly $15 billion in aid.

Chrysler is also depending on a recovery in U.S. sales and a jump in market share. It expects auto industry sales of 10.5 million vehicles in 2010 to rise to 14.5 million in 2014, and that its share can jump from 9 percent this year to 13 percent in 2014. It also expects its global sales to more than double to 2.8 million in 2014 from 1.3 million this year.

Chief Financial Officer Richard Palmer said the company aims to pay back government loans by the end of 2014.

He also expects Chrysler to break even in 2010 and report an operating profit of $5 billion in 2014.

Chrysler's had $5.7 billion in cash at the end of September, up $1.7 billion since June. As recently as December, though, the automaker was practically out of cash.

Joe Veltri, Chrysler's product development chief, said he has a lot more funding to revamp products and create new ones. Chrysler can go to a cupboard of Fiat technology to develop new products, a vast difference from Chrysler's prior owner, Cerberus Capital Management LP, which was not a manufacturer but a private equity firm.

"We have far more tools to work with," he said.

Additional Facts
A CLOSER LOOK

# Chrysler is depending on a recovery in U.S. sales and a jump in market share.

# It expects auto industry sales of 10.5 million vehicles in 2010 to rise to 14.5 million in 2014, and that its share can jump from 9 percent this year to 13 percent in 2014. It also expects its global sales to more than double to 2.8 million in 2014 from 1.3 million this year.

# Chief Financial Officer Richard Palmer said the company aims to pay back government loans by the end of 2014 and also expects Chrysler to break even in 2010 and report an operating profit of $5 billion in 2014.

# Chrysler's had $5.7 billion in cash at the end of September, up $1.7 billion since June. As recently as December, though, the automaker was practically out of cash.

LINK:Chrysler to overhaul lineup | rgj.com | The Reno Gazette-Journal

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Marchionne Interview Reveals Product Bonanza For Chrysler, Fiat, Dodge And Alfa. Lancia Is SOL.
May 23, 2012



An interview in July’s Automobile magazine has Sergio Marchionne putting to rest a number of future product plans for Chrysler, among them, the definitive fate of the minivan.

Speculation has been brewing over which of the current minivan twins will live on, and which will be come a crossover. Sergio himself claims that “the owner of the minivan is Dodge”, and that the new Grand Caravan will be a more exciting vehicle, despite retaining the classic minivan features. The Town & Country will become a Mercedes R-Class type vehicle that will be more European luxury than updated Chrysler Pacifica. A range of 4-cylinder and V6 engines as well as front and all-wheel drive will be available for both vehicles when they launch around 2015.

The next Chrysler 200 will be based on the same architecture as the Dodge Dart (i.e. the Alfa Giulietta platform) and be sized roughly in line with the Audi A4. A sedan, coupe and convertible will all be available, with 4 and 6-cylinder options. Chrysler will continue to provide vehicles for Lancia, but the brand’s future seems dim, with Marchionne expressing little interest in investing resources into Lancia. The Chrysler 100 hatch will take a while to appear – Automobile cites a launch date of 2016, which seems like far too long.

Jeep is considered by Marchionne to be one of the two “global brands” (along with Alfa Romeo), and Marchionne says that all future products will have a Trail Rated version. The new Liberty, based on the Giulietta architecture, will launch in Detroit next year, with a host of other products to follow. Among them are a new “Jeepster” (a subcompact with an Alfa version), a new Compass and a full-size SUV dubbed the “Grand Wagoneer”.

Dodge will lose the Durango, Avenger and Caliber as Marchionne seeks to trim the brand lineups to around 5 vehicles each, while Fiat will continue along with a 500-based lineup, including a 500 Zagato, 500L, 500XL (presumably the 7-seat version) and the 500X crossover, similar to the Mini Countryman. And finally, Marchionne says more is coming from SRT. The article doesn’t quote him on anything, but suggests SRT versions of the Dart, Journey and a possible SRT Barracuda that could also give way to a new Alfa sedan using the same platform. Marchionne did stress that the Dodge muscle cars need to evolve, rather than re-invent themselves. As far as accuracy goes, the article more or less confirmed the MX-5 based Alfa Spider, and was presumably written long before the announcement was made. Hopefully the rest is just as accurate.

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