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Fiat: Jeep may be hot export

Saturday, June 20, 2009

One of Fiat’s first objectives now that it has control of Chrysler Group LLC is to make the company more export-oriented, as it emerges from bankruptcy and gets back to building vehicles.

“They think there is a lot of opportunity overseas for the Jeep brand,” said one senior Chrysler official, who asked not to be identified. The possibilities are especially strong in regions such a South America, where Fiat already has a well-developed sales network.

Even the new small-car platforms that Chrysler will now borrow from Fiat could easily fit into future plans. “We might not necessarily sell an A-car here, but we might sell it some where else,” said another Chrysler official.

Jerry York — former Chrysler chief financial officer, who later worked closely with Kirk Kerkorian — told The Oakland Press recently that DaimlerChrysler had neglected the export business during the decade it ran Chrysler.

Exports of Jeep-brand vehicles actually peaked the year before the merger with Daimler-Benz, according to another former Chrysler executive.

In addition, American car manufacturers have rarely made exports a priority over the past 30 years. The bankruptcy of both Chrysler and General Motor Corp. has forced both companies to rethink their business models.

“The past few years have offered several painful lessons on what it will take to survive in the modern-day automotive industry.

“The alliance is a bold first step to implement those lessons we’ve learned, but it is only a first step. Now we must prove we can make it work,” Fiat Chief Executive Sergio Marchionne said.

Marchionne has been deeply involved in the re-organization of the company, a Chrysler insider said.

“It’s much different than Daimler, it’s much less formal,” said another Chrysler official, noting that Chrysler will still operate as a standalone company.

However, exports are clearly part of his plan to rebuild the company’s revenue base, insiders said.

Fiat also will give Chrysler access to up-to-date small engines, Jim Hall said. Hall works for 2953 Analytics in Birmingham, which keeps tabs on technical developments in the automotive business.

“The new technology offered by Fiat is very promising,” Hall said, adding that it could even include an experimental two-cylinder engine of less 1-liter displacement that has more than enough horsepower to drive a small car.

Suppliers also are hoping that Fiat will transfer some of its well-honed diesel technology to Chrysler.

Diesel engines offer major fuel-economy advantages, and Chrysler needs a new diesel engine for export markets in Latin America and the Middle East.

Having just escaped the economic guillotine, Chrysler’s 38,000 employees, only a third of its 2001 workforce, seem glad that someone stepped forward to give the company one more chance.

“It feels good,” said one senior official who watched as first Daimler and then Cerberus Capital Management tried to run the company back twice from the brink of ruin.

“To have the company go through Chapter 11 showed we definitely had some problems,” they said.

Article Link: Fiat: Jeep may be hot export - The Oakland Press Business: The best place for news in and around Oakland County
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