Marchionne Discusses Flexibility, UAW Wages and Aluminum Pickups

On whether there’s flexibility in the investment plan should markets fail to reach expectations: “The only real live additions to capacity are the Brazilian expansion (to build Jeeps) and expansion into China. So everything else is discretionary: tooling of cars and R&D. So if markets determine otherwise, we would put a grinding halt to the capital-investment plan.”

On next year’s contract talks with the UAW: “I always have been of the view that the 2-tier wage structure is unviable long term. We have to replace it with something that reflects the sharing of the economics of the enterprise. Tier 2s should be able to make more than Tier 1s today, but only if the company does well.”

 On the upcoming all-aluminum Ford F-150 pickup: “We will watch with some intensity the launch of the F-150. We have reservations about whether aluminum is the answer. The mileage of the 3L EcoDiesel in the Ram today is better than what Ford will have with the aluminum F-150. We understand the cost of making aluminum bodies. We understand the technology. I think the usage of aluminum in our portfolio is better suited to things other than a pickup truck.”

 On the future pricing environment in the U.S.: “No doubt post 2008-2009 we’ve seen unparalleled stability in pricing. That’s because nobody has capacity. We can tone the machine down with relative ease, by taking shifts out. Everybody’s in the same box. I am not concerned about capacity chasing demand. And as long as those conditions remain in place, I think we’ll see benign pricing in the U.S.”

 On whether FCA now has too many brands: “The answer is yes. (But) there’s not much else I can take out of the system.” Marchionne says he would rather sell Alfa Romeo than co-mingle it with another brand, and Ram, Jeep, Maserati and Ferrari are untouchable stand-alone marques.

 On whether a planned midsize pickup for Latin America could be sold in the U.S.: “That’s a tough question. We’ve been (looking at that) for five years, and we just can’t flip the coin. Unibodies have severe limitations, but they may have a space. (But) we’ve taken it to clinics, and the response at best has been lukewarm.”

On potential for a partner: “We have the resources to achieve (a 7 million-unit annual sales target) without merging with any competitors.” He says he expects FCA to rise one rung higher in the sales ranking of global automakers.