There's nothing like the blunt unvarnished comments of Chrysler CEO Sergio Marchionne to make you step back and take stock of where the world is right now.
After all, there are violent protests in the streets of Athens, the economies of several countries in Europe are a mess, the US is looking at the possibility of a double dip recession, and companies around the world are facing plenty of questions about how they will grow earnings in 2012 and 2013.
That includes Fiat, which was downgraded by Fitch on Tuesday due to three concerns:
- Chrysler and reviving Chrysler be a drain on Fiat
- The company too dependant on sales in Brazil
- The low exposure in China hurting Fiat.
When CNBC Europe caught up with Marchionne in Turin, Italy he responded to the credit downgrade by saying, "You have been seeing downgrades being distributed across all sectors, banks are being downgraded, countries are being downgraded right now. The level of uncertainty that is sitting around this place is so high that nothing should surprise anybody."
For as long as Marchionne has been running Chrysler, he's gone to great lengths to temper the expectation of those who have expected the automaker to bounce back. And for good reason. The place was left for dead (and yes, some in the White House wanted to kill it during the bailout discussions) when Fiat took control. Since then, it has made steady progress in weaning itself of the costly habit of incentives. It's also taken the first, and very important steps of fixing a product line-up that was neglected for too long.
Chrysler is once again profitable, but even Marchionne admits it has a long ways to go. The next two years will be as important as the last two. With the U.S. economy limping along, don't expect auto sales to continue growing as quickly as they have since bottoming out in 2009. And overseas, Chrysler and Fiat still need to find a way to quickly establish a foothold in China and the red-hot markets of Asia. There are some bright spots and some areas that are promising.
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