Mad Chrysler Men

Nearly seven hours and 314 PowerPoint slides later, CEO Sergio Marchionne's long-awaited plan for reviving the seriously ailing Chrysler is out. In a marathon presentation (and in sometimes mind-numbing technical detail), Chrysler managers Wednesday confirmed they are adopting elements of Marchionne's successful strategy in turning around Fiat on nearly every front, from restyled cars to freshly painted factory floors and newly buffed showrooms.

As expected, executives led by Marchionne are broadly betting on leveraging the scale of the newly combined company and using models from Europe to plug holes in Chrysler's lagging product lineup. Executives unveiled new branding, logos, and market positioning for Chrysler, Dodge, Jeep, and Ram brands. One after the other, each brand's new chief trotted out breathless, Mad Men-esque marketing creedos. (At Chrysler, "Let's design cars people want to have their picture taken with" and, at Ram, the macho "My tank is full.") Ambitious goals include significantly refreshing the design and technical underpinnings of current models over the next 12 months, much faster than many industry observers had previously suspected.

The company’s meticulously detailed plans call for it to sell as many as 2.8 million vehicles globally, or about double today’s figure, with about 58 percent of those sales in the all-important U.S. market by 2014. Executives said the company would break even next year and begin generating profits in 2011. They forecast the new company will generate about $5 billion in profit on $70 billion in revenue and have paid back the U.S. taxpayer in full by 2014. Chrysler had $5.7 billion in cash on hand at the end of September, up from the $4 billion it had in June.

Marchionne’s advantage is a transparency foreign to Detroit, where companies habitually hold their cards close to the vest. The company said it would begin reporting its financial results as of the fourth quarter of 2009 and promised to pour $23 billion of investment into the effort, something Chrysler’s past partners, first Daimler-Benz and later private equity firm Cerberus Capital Management, had been unwilling to do. Where they hoped for one or two hit models to revitalize the American manufacturer, Marchionne is banking on a raft of new models presented today. Concrete plans will help avoid the major pitfalls of the alliance with Daimler which, despite a decade of cohabitation produced only one all-new model, the maligned Crossfire sportscar.

But questions remain about the company’s ability to recalibrate itself in every area of the business. Will managers be able to stay as focused over the next few years as they have been in the past five months coming up with today’s plans? Only time will tell. Meanwhile, doubts about whether or not the plucky Italian executive can pull off his grand plans to create a global car giant are likely to continue circulating until the company begins posting real gains with consumers.

The presentation was no doubt intended to counter pervasive negative chatter among dealers, suppliers, consumers, and the press about the precarious financial situation at Chrysler. Chrysler's numbers since it emerged from bankruptcy in June haven't done much to counter those perceptions. U.S. sales are down 40 percent over the past year; market share has slipped from 11 percent to 9 percent. Worse yet, research firm CNW Marketing Research reports that some 55 percent of Chrysler's sales are going to corporate and rental fleets—typically a troublesome sign of an auto company's health.

Overall, the presentation showed Chrysler executives pulling pages from the playbooks of not only Fiat but other successful auto firms. Much like Toyota with its Toyota, Lexus, and Scion brands, Chrysler is smartly attempting to streamline the number of platforms and engines it produces, improving profit margins on each vehicle. Executives said by 2014, the company would offer 21 models but they would be built on four fewer platforms than are currently used. That could result in millions in efficiencies. In engineering, manufacturing, and quality control, Chrysler's plans center on so-called cross-functional teams, groups of employees pulled from various departments to reduce the time it takes to fix technical issues. Similar management schemes at automakers such as Hyundai have yielded impressive gains in quality.

Other brands—notably cross-town rivals Ford and General Motors—have had similarly grand objectives in their recent histories. Chrysler itself has had similar dreams in the past, as part of the so-called “merger of equals” with Daimler-Benz more than a decade ago. But, unlike past attempts to gain share by bulking up by acquiring brands, Chrysler's plans are now well articulated and—for better or for worse—the company has laid down benchmarks for itself. “We have left no stone unturned. We are now publicly accountable for the delivery,” Marchionne said in his closing statements.

Highlights from the plan for each of Chrysler’s current brands include:

Chrysler

• Pair Chrysler with Fiat's European Lancia brand of luxury vehicles.
• Tweaking current nameplates for January's
• Improving collateral of website and collateral
• Increase global sales to 500,000 units.

Dodge

• A new logo and branding to emphasize sporty, youthful inexpensive cars.
• New entry-level models will be available in different "flavors" - or equipped differently rather than more expensively.
• Slow-selling models such as the Caliber will be refreshed with new engines and higher-quality interiors this year.
• The once popular Caravan minivan will be redesigned inside and out.
• A model from Fiat will replace the current Avenger which has received middling reviews.
• Dodge's popular but long-in-the-tooth Viper sports car will be retired next summer but could come back in 2012.

Ram

• Formerly a division of Dodge, the Ram truck brand will be broken off into a separate unit.
• Dodge dealerships will continuing selling Ram trunks.
• A new small truck to replace the aging Dakota is forthcoming.
• Ram will expand to offer commercial trucks as well including 18 wheelers.
• Executives are hoping to sell 415,000 Ram trucks by 2014, 50 percent growth in volume from today.

Jeep

• Executives have green lighted the biggest marketing budget for the brand in four years.
• Despite expanding the Jeep line-up to car-based crossovers, executives committed to maintaining the rough and tumble underpinnings of the popular Wrangler off-road model.
• Showrooms will be remodeled to reflect the brand's off-road heritage.
• In a move reminiscent of BMW's Mini brand, Jeep's managers will become more active with owner groups by attending or sponsoring events.