Sergio Marchionne, the Chief Executive Officer of both Chrysler Group LLC and Fiat S.p.A posted an explanation of Chrysler’s status yesterday on a Chrysler blog site.
Marchionne was not made available to reporters, and Chrysler has suspended its long-standing sales result press conferences. The privately held company, in which U.S. and Canadian taxpayers hold a ten percent stake, also does not publish financial results.
In the Chrysler bailout, the U.S. Treasury has invested a combined $14.3 billion in the new and old entities, including $1.5 billion for Chrysler Financial and $280 million for the Chrysler warranty program.
Chrysler Group reported yesterday that total U.S. sales in September were 62,197 units, a decrease of 42% compared with September 2008.
Marchionne: “On the issue of Chrysler I think that one of the things you need to be absolutely careful about is that when you start looking at market share data, for any of the automotive producers in the U.S., there are a number of things that have impacted on market share, volumes in the month of September. We have just come off a substantial inducement to consumption that was associated with the Cash for Clunkers program, and that in and by itself is a disturbance that, at least from Chrysler’s standpoint, one, was unexpected and was announced at a time in which our industrial machine was just about ready to get started up and running. Effectively, most of our plants had been out for a substantial part of the spring and part of the summer; and the machines had not come back on until the end of July.
“Secondly, this is a process that we’re going through, and we have been through this on the Fiat side. When I arrived in 2004 we had to go through the same type of painful process of watching market share decline as we cleaned up our commercial practices in the field. And so a lot of the inducements that were being offered in the marketplace by American car manufacturers are beginning to disappear.
(Chrysler was averaging incentives of about $5,500 a vehicle in the months preceding its bankruptcy this spring -KZ)