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Why Chrysler’s Makeover Is Far From Finished

Thursday, 15 Nov 2012 | 4:58 PM ET
Chrysler CEO Sergio Marchionne
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Chrysler CEO Sergio Marchionne

In the world of auto plant openings, platitudes from union leaders, government officials and other dignitaries is part of the routine script.

So when Chrysler announced its latest investment (and plan to hire 1,250 workers) in Detroit Thursday the comments from UAW leader General Holiefield struck me as out of the ordinary.

Holiefield lauded Chrysler CEO Sergio Marchionne for the turnaround he has overseen with the smallest of the Big 3. But Holiefied went beyond the usual congratulations. He praised Marchionne as the type of auto executive who follows through on his word and wants a genuine partnership with the United Auto Workers.

Having covered Holiefield and the Chrysler wing of the UAW through the bumpy years under Daimler-Benz and the truly forgettable years under Cerberus Capital, his respect for Marchionne was striking. (Read more: 1.7 Billion Cars on the Road by 2035)

Funny what a difference three years can make. Chrysler is in the midst of a renaissance. "By any measure this is an incredible turnaround for a company whose very survival was once in question," Marchionne said at Chrysler's Mack Engine Plant.

Ramping up Ram

Marchionne was at the Mack plant to announce the latest expansion at Chrysler: 1) a $238 million investment 2) upgrade three Michigan plants 3) add about 1,250 jobs.

The investment and plant upgrades will focus on helping grow the Ram pickup truck line. With sales up 20 percent this year, Ram is riding two waves: an improving economy and greater demand for capable, fuel-efficient pickups.

Ram has long been considered an also-ran of sorts to the dominance enjoyed by Ford (F-Series) and GM (Chevy Silverado and GMC Sienna). Those days are fading. Ram has grown pickup sales faster than Ford and GM this year. More importantly, Marchionne is bound and determined to push Ram further.

Chrysler's Next Big Step

For Marchionne, the focus in 2013 is steering Chrysler toward an eventual merger with its parent Fiat. He has called the move inevitable.

As that happens, watch Chrysler this year as Marchionne guides it towards its next big step: steadily growing the Chrysler and Jeep brands outside the U.S. Most of the attention will be on China (understandable since it's the world's largest auto market), but Chrysler and Jeep also have incredible potential in other parts of the world like Eastern Europe.

Chrysler is no longer in critical condition, on the verge of expiring. Now Marchionne wants to take it to a new level. "It is time to turn the page and start a new chapter for Chrysler," said Marchionne.

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___________________________ Questions? Comments? BehindTheWheel@cnbc.com and Follow me on Twitter @LeBeauCarNews

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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