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Chrysler And Marchionne: What We Can Expect

Sergio Marchionne
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Sergio Marchionne

Forty days. In the world of corporate bankruptcies, I guess you could call that a quick rinse. Now that Chrysler's balance sheet has been cleaned up (thanks in large part to billions in Federal financing), the auto maker is primed for life with Fiat.

So long Bob Nardelli, hello Sergio Marchionne:

What can we expect from Marchionne and Fiat? A rapid move to differentiate the Chrysler line-up, an end to Chrysler's broken system for managing brands, and a lot of change very quickly. Each of these is important and will take time to bear fruit, but at this point, they are the only option for saving Chrysler.

Line-up differentiation:

This is critical for Chrysler, Jeep, and Dodge. Yes, each has a distinctive model or two (Jeep Wrangler is one example), but overall, the product portfolios are have become blurred over time. Fiat needs to straighten that out and unleash Chryslers talented design staff. The auto makers pipeline is dry after two years of neglect by Cerberus Capital and being left with little before the guys from Daimler pulled out. It will take time to get those distinctive models out to market, but Marchionne won't waste time cranking up the design staff.

Better managing Chrysler brands:

For years, Chrysler has managed "platforms" and not brands. The result: drifting brands. Think about it. What do Chrysler, Jeep and Dodge stand for? Don't tell me a slogan like, "Grab life by the horns." In an increasingly fragmented auto industry, it is crucial for Chrysler to have three distinctive brands.

Change, fast change:

This is where Marchionne and his executives will make their most immediate impression. He won't wait to make changes at Chrysler. This is an auto company that withered away under Cerberus Capital. Ask people inside Chrysler about life under Cerberus and they'll tell you how the company never evolved, moved forward with any sense of urgency- until it was facing collapse.

So with $6 Billion in exit financing, Chrysler is about to start a new chapter in its long, storied, and sometimes stormy, history. Good luck Mr. Marchionne.

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