Party’s Over: A New Tone for Chrysler

Bill Vlasic and Nick Bunkley|The New York Times

The old Chrysler was famous for its aggressive marketing and auto-show stunts, like running a cattle drive down the streets of Detroit to publicize a new pickup.

But for its coming-out party on Wednesday, the new Chrysler stuck to a far more serious and subdued script.

Sergio Marchionne
Getty Images

For more than six hours, Sergio Marchionne, Chrysler’s new chief executive, and his top lieutenants marched through details of the company’s five-year plan in front of an audience of about 300 industry analysts and reporters.

Until now, Chrysler has been relatively quiet since it emerged from bankruptcy this summer, with the help of $12.5 billion in aid from the United States government and a new partnership with Fiat, the Italian automaker.

Fiat, which owns 20 percent of the company, is now firmly in control and is being guided by a new board partly selected by President Obama’s auto task force.

A parade of executives laid out in methodical fashion how Chrysler planned to increase its United States market share from its current level of 8 percent, and achieve $3 billion in purchasing savings with Fiat by 2014.

They said it would increase annual revenue to $67 billion by 2014, from $42 billion next year. It also predicted it would start earning a profit in 2011 and would be earning $5 billion a year by 2014.

The outstanding government loans will be repaid as well by then, Chrysler’s new chairman, C. Robert Kidder, said.

Richard Palmer, the chief financial officer, said Chrysler did not expect to issue a public stock offering until 2011 at the earliest.

The earnest message delivered by executive after executive was that Chrysler’s passion for products would be enhanced by Fiat’s expertise in engines, design and technology over all.

The company plans to reinvigorate its core Jeep, Chrysler and Dodge brands with broad makeovers.

Three Fiat-based cars are to be sold under Chrysler’s Dodge brand, and two of them will replace the slow-selling Caliber and Avenger. In 2010, Chrysler also intends to add a large Dodge crossover vehicle.

The Chrysler brand, the company’s smallest, will expand to six models, including the 500 and a Fiat-based crossover, from four models today.

At Jeep, Chrysler plans to discontinue after 2012 the Patriot and the Compass. Jeep will gain three Fiat-based models in 2013, including a new version of the Liberty.

Many in the audience remarked on the decided lack of sizzle from an automaker that once sponsored a “Lingerie Bowl” of women playing football in underwear.

“They were the ones who mixed the drinks, wore turtlenecks and told all the best jokes,” said Sean McAlinden of the Center for Automotive Research, referring to the previous Chrysler managers. “They let the G.M. and Ford guys wear the gray suits, but I guess things have changed.”

Chrysler executives said the understated tone of Wednesday’s gathering was appropriate, given that the company’s survival was financed partly by American taxpayers.

“I think people recognize that the management is trying to make Chrysler a successful American car company again,” said Mr. Palmer, the chief financial officer. “And it hasn’t been successful for quite a few years.”

Mr. Marchionne set the tone early by providing a glimpse of Chrysler’s postbankruptcy finances. He said the company had $5.7 billion in cash reserves, despite its slumping sales. “Some of you have been surmising that we’re losing money and we’re bleeding through the cash we received,” he said. “Not true.”

He also said Chrysler had been “incredibly parsimonious” in spending taxpayer dollars. The company predicted that it could build its American market share to nearly 14 percent by 2014. That would mean increasing sales to two million, from about 950,000 in the United States this year — a huge leap given how Chrysler’s market share has shrunk in recent months.

There are not many new products coming next year, although Fiat will begin selling its tiny 500 minicar at selected Chrysler dealerships. “It looks to be a couple of tough years ahead,” said Mr. McAlinden.

Though the focus of the presentations was the future, many of the speakers also acknowledged Chrysler’s near-death experience in the spring.

“I am humbled to be a part of this today,” said Ralph Gilles, the head of the Dodge brand. “It is huge. It is a responsibility I take very seriously.”

Mr. Marchionne wrapped up the event by recounting the “painful and difficult” efforts made to assess Chrysler’s people, product and brands. “No stone has been left unturned,” he said.

He also referred to Chrysler’s 30 percent plunge in October sales, reported on Tuesday, by far the worst performance by any major automaker.

“Yesterday, we were provided with another solemn reminder of our starting point,” he said. “Today is the first day of the new Chrysler.”