Chrysler to Repay Loans, Chairman Pledges

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Chrysler's Next Chapter

AUBURN HILLS, MI – Chairman C. Robert Kidder kicks off Chrysler Group LLC’s rollout of its long-term business strategy here promising to make the auto maker “a great public company again and repay loans from the U.S. and Canadian governments with all deliberate speed.”

Kidder: Chrysler will prove good investment for shareholders.

Kidder says the board of directors’ confidence Chrysler will reemerge as a viable competitor “is considerably stronger now” than it was several months ago when the new management took control of the auto maker as it exited bankruptcy.

The No.1 task now, he says, is to “create compelling brands and products” via its tie-up with Fiat Automobiles SpA.

But he also says the auto maker will do a better job managing production to ensure vehicle supply no longer outruns market demand. Chrysler has been notorious for flooding holding lots with unsold cars and trucks, then offering costly consumer incentives and strong-arming dealers to move the metal.

“We will manage the supply chain to (better balance supply and demand),” Kidder says. “That’s a considerable departure from past practice.”

Chrysler also will focus on growing Mopar parts operations, “and we’ll continue to deliver attractive profitability at Mopar,” Kidder says in singling out the division.

CEO Sergio Marchionne has instituted a “no business as usual” mentality and brought “considerable energy for change,” he adds.

Ralph V. Gilles, president and CEO of the Dodge brand and Chrysler’s top designer, concurs with Kidder’s view of Marchionne.

“Sergio has breathed life into our company,” he says. “I have never before seen a more functional leadership team and…more functional workforce. The lights never go off around here.”

For his part, Marchionne slams reports of Chrysler’s weak financials as “misconceptions” in his brief opening remarks.

The auto maker ended the third quarter with $5.7 billion in cash and achieved a break-even performance in September, Marchionne says, promising greater fixed-cost reductions. “The new Chrysler is being incredibly parsimonious, i.e. cheap,” he says.

Kidder sums up: “We have plans for a financial performance that will allow us to recapitalize and provide a return on investment for our current shareholders.”

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