CHRYSLER’S QUARTER: HOW DO YOU SAY “POOR MOUTH” IN ITALIAN?

5/1/13

Chrysler announced on Monday that its first quarter profits dropped 65% on a year over year basis.   Chrysler, and Fiat, CEO Sergio Marchionne attributed the quarter’s troubles to the extensive down time and retooling costs necessary to revitalize the Chrysler product line.   (See my 1/31/13 post, CHRYSLER’S PROBLEM:  IT’S (MOST OF) THE PRODUCT, STUPID!)

More instructive for those of us who have been following Fiat’s desire to buy the 41.5% of Chrysler it doesn’t already own from the UAW Retiree Health Care Trust (“Trust”) (See my 4/25/13 post,  IMPORTED FROM DETROIT:   MARCHIONNE BETTER BE AS FAST AS A CHRYSLER 300 SRT8) is the spin Mr. Marchionne put on the quarter and on the heavy burden that upgrading Chrysler’s not ready for prime time product line has placed on the company.  Note some of his comments on the quarter:

--“not so glorious”

--“It wasn’t painless.   It should not have caused the disruption that it did, but it has.”

--“We need to get everything right between now and (year end, if Chrysler is to hit its full year profit target of $2.2 billion.)  There is not a guy in this house that thinks this is going to be a walk in the park.”

--“The amount of investment we’ve made in some of this industrial infrastructure is unusual for any car maker.   We’re redoing body shops and paint shops all over the place.”

This could simply be a case of Mr. Marchionne displaying some of his characteristic  candor.   However, given that he is trying to buy from the Trust the 41.5% of Chrysler that Fiat doesn’t own, and that he would like to do so, naturally, as cheaply as possible (Again, see my very instructive, nearly instantly seminal 4/25 piece.), it sounds like Mr. Marchionne is talking his position; i.e., short 41.5% of Chrysler.

On another, only ancillarily related note, I recently requested and received the brochure for the Chrysler 300, the car that yours truly has long lusted after but will probably never own due to its lack of a manual transmission.   The brochure is possibly the coolest car brochure I have ever seen and, believe me, I have seen plenty of such brochures over the years.   The faint, unlabelled map of Detroit on one cover and New York on the other, the great shots of the cities of Detroit and New York inside, and the car itself made reading the piece a genuine treat.   You might want to check it out.  

This brochure goes hand in hand with Chrysler’s, for the most part, terrific advertising and marketing campaigns for most of its products; see my 2/7/11 post on the Insightful Pontificator entitled “THIS ISN’T NEW YORK CITY, OR THE SECOND CITY, OR SIN CITY, AND WE’RE CERTAINLY NO ONE’S EMERALD CITY”.   Further, if every Chrysler product were as competitive (terrific, really) as the Chrysler 300, Mr. Marchionne’s only problem would be the astronomical price he would have to pay the Trust for the piece of the Chrysler action Fiat doesn’t already own.