Can CEO Sergio Marchionne pull off another successful turnaround ala Fiat? That is the question being debated this morning in automotive circles.
Chrysler Group reported total U.S. sales for October of 65,803 units, an increase of 6% compared with September, but a decrease of 30% compared with the same period in 2008.
After years of financial engineering by corporate raiders at Daimler and Cerberus that stripped it of assets by loading it with debt, and also left it short of design and engineering talent, as well as purchasing and manufacturing expertise, crunch time has come.
Chrysler today has a quality-dreadful, gas guzzling truck-ridden lineup that is distinctly out of touch with the times. So it’s either the official public beginning of the end or start of another, yet another, comeback. That’s the debate.
In Auburn Hills against this backdrop, the embattled CEO of the New Chrysler Group came out swinging at the media who opine that the company is in dire financial condition and will not survive. It is necessary, of course, that Chrysler retain existing buyers and attract new ones if it is going to exist. So projecting confidence is the communications strategy of this day and for many more days — years –to come.
On cue in his opening remarks, Marchionne claimed that Chrysler Group now has $5.7 billion in cash on hand, up $1.7 billion from $4 billion in June when it emerged from bankruptcy. Chrysler ran break even in September, Marchionne said, and actually made a profit of $200 million in the third quarter – all assertions impossible to access since the privately held company is not filing statements that meet generally accepted accounting participles.
As a side observation, this puts the other North American taxpayer-propped automaker, General Motors, under extreme pressure to make similar claims when it releases its first post bankruptcy statement later this month. But this was sideshow to the three ring circus that was now well underway at Chrysler headquarters.