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Chrysler’s 5-year plan

The road ahead

It took Chrysler Group CEO Sergio Marchionne and his team eight hours to detail how they plan to turn around Chrysler over the next five years. Big plans mean a big presentation, but we’ll give you a condensed overview of the plan.

Assorted Chrysler top executives await their turns to speak as CEO Sergio Marchionne presents the five-year plan on November 6. 

The plan includes changes to Chrysler’s design, manufacturing, parts supply operations and brands. Many top executives have already been replaced during the bankruptcy procedure.

REVENUE

The goal of the plan is to increase annual revenue to $67.5 billion by 2014. Marchionne says that Chrysler will break even in 2010 and will have positive cash flow by 2011. The company expects to pay off U.S. and Canadian government loans totaling $7.3 billion by 2014.

Total debt for the company is projected to fall from $13 billion at the end of 2009 to $8 billion by the end of 2014.

“Efforts to shave manufacturing, material and administrative costs will continue,” said Chrysler board Chairman Robert Kidder. The company will leverage its alliance with Fiat, which now owns 20 percent of Chrysler Group LLC, to economize on production costs. Chrysler estimates to save $2.9 billion by 2014 by sharing parts (including gearshifts, door, mirrors and engines) with Fiat.

SALES

Chrysler projects total global sales to rise from 2009’s 1.3 million vehicles to 2.8 million in five years with U.S. sales increasing from 950,000 to 2 million. Chrysler says it will build its brands to account for 14 percent of the American market by 2014.

Kidder said the automaker’s top priority is to invest in creating “compelling brand and product offerings,” adding that Chrysler will also match its production to actual demand, which is “a significant departure from past practice.”

By the end of 2011 there will be no more Chrysler-only dealerships. All dealerships will offer the three main brands of Chrysler, Dodge and Jeep, and some will carry the Ram and Fiat brands.

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