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“Ruinous” Practices Threaten Automakers, Warns FCA’s Marchionne

“Overkill” in last year’s recall crisis may have been “the only acceptable answer.”

by on Jan.13, 2015

The auto industry may be looking at increasing sales, but FCA CEO Marchionne is still worried.

The U.S. auto market may be heading into a very good year, but there’s still reason to worry, cautioned FCA Chief Executive Officer Sergio Marchionne, during a well-attended media “roundtable” at the opening of the North American International Auto Show.

Like other senior executives gathered for a two–day preview, Marchionne said 2015 is likely to bring further sales gains in the U.S. He also said automakers appear to be showing great restraint in holding back on the “ruinous” practices of the past – such as excess incentives – that nearly destroyed the industry during the depths of the Great Recession.

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Nonetheless, the outspoken Marchionne said there are still reasons to fret. He pointed to the ongoing problem with excess capacity in Europe, and the fact that the auto business is so costly to compete in that a failure of a single major project could put a company at risk of failure.


No Diesels for Small Chryslers, Says Marchionne

Fiat not interested in acquiring Opel.

by on Jan.12, 2012

While the Jeep Grand Cherokee is set to get a new diesel, Chrysler won't be using the high-mileage technology in its small cars.

Chrysler will begin building the diesel version of the Jeep Grand Cherokee at the Jefferson North assembly plant in Detroit early in 2013. But Fiat/Chrysler chief executive officer Sergio Marchionne said he doesn’t expect diesel engines to move from large trucks and SUVs into smaller passenger cars in the U.S.

The necessary emission controls make the engines too expensive, Marchionne said during an appearance at the Automotive News World Congress. The Canadian-born executive also said Chrysler won’t begin preparing the Jefferson North plant to build a new Maserati SUV — using a Ferrari engine — until 2013 and dismissed speculation Fiat could be lining up to make a bid for Opel.

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He also said the industry has a social responsibility to improve fuel economy. “The fuel efficiency challenge is one of the biggest issues facing the industry, and not just because of daunting government regulations. As an industry, we need to look beyond the narrow interests of our industry and embrace ecological responsibility because we owe it to future generations,” he said.


Fiat Sales Target Cut in Half

Marchionne may “shift resources” from Italy to Detroit.

by on Jan.09, 2012

Chrysler and Fiat were "incredibly naive" in their sales forecasts, admitted Marchionne.

Chrysler is sharply scaling back its plans for the U.S. roll-out of the Italian Fiat brand following an unexpectedly slow launch last year, but Sergio Marchionne, who serves as CEO of both sides of the trans-Atlantic Chrysler-Fiat alliance, insists that the shortfall does not mean the Italian brand has failed in its bid to return to the U.S. market after a decades-long absence.

In a roundtable session with reporters during the 2012 North American International Auto Show, Marchionne said he expects to cut by roughly half the number of cars Fiat expects to sell in the U.S. until it can better establish itself with additional products beyond the pint-sized Fiat 500 that debuted a little over a year ago — admitting the initial forecasts were “incredibly naive.”

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In a wide-ranging conversation, the Canadian-educated executive also noted that given the ongoing problems with Europe’s economy – as well as resistance to change by Italian unions — he is given serious thought to moving more of Fiat’s headquarters operations to the U.S.

The one thing Marchionne said he has “not a single doubt about,” 30 months after Fiat helped pull Chrysler out of bankruptcy, is that “Fiat needs Chrysler as much as Chrysler needs Fiat.”