Fiat-Chrysler CEO says he'll stay on until at least 2015
TRAVERSE CITY - Chrysler and Fiat CEO Sergio Marchionne says electric vehicles are "overhyped" and that "plain-vanilla" technology is the key to meeting higher fuel efficiency standards.
At the Center for Automotive Research's annual Management Briefing Seminars on Wednesday, Marchionne said he plans to stay on the job until at least 2015, and an initial public offering of Chrysler stock is unlikely before 2013 — later than has been speculated. His successor, Marchionne said, is likely to come from within the Fiat-Chrysler alliance, reported The Detroit News.
In a wide-ranging speech, and in comments to reporters afterward, Marchionne took generations of auto executives to task for opposing increases in federally mandated fuel efficiency standards, as well as other government-imposed requirements.
"This industry has got a very bad habit of crying wolf, and sooner or later somebody's going to call your marker and call your bluff," he said. Automakers, he noted, have long opposed mileage requirements, but ultimately they always complied.
Marchionne said a compromise deal between automakers and the Obama administration to boost 2017-25 fuel economy standards to 54.5 mpg — about double their current level — is "very doable."
"Anybody who surrenders 14 years before the date and says, 'I can't get there' ought not to be in business," he said.
Even though Chrysler plans to unveil an EV Fiat 500 next year, Marchionne said the focus on electric vehicles is "overhyped."
"It cannot be the only answer" to great gas mileage, he said.
The "plain-vanilla" technology of better engines and transmissions, he added, "will by themselves bring huge benefits."
Environmentalists praised Marchionne's candor.
"I welcome all truth-tellers," said Dan Becker, director of the Safe Climate Campaign.
Marchionne, 59, said he hopes the Fiat-Chrysler alliance will be one of the five or six global players in the auto industry.
"It's going to be up to the guy after me, I think — after 2015, hopefully. Maybe a year later," he said at the event. "Chrysler will be here after me."
Meeting with reporters later, Marchionne softened his comments: "I technically can go beyond 2015," and will "leave later or earlier as the case may be. … I wouldn't focus on the date. I would focus on the process."
The new Fiat-Chrysler management team announced last week has 22 executives representing of nine nationalities. "It's designed to be a proving ground," Marchionne said.
The new leadership structure, he said, is intended "to ensure speed, clarity of direction and unity of purpose. When two enterprises integrate, they share everything: industrial resources and know-how, projects and targets, challenges and ambitions."
Fiat, which owns a majority stake in Chrysler, is likely to replace some board members. "It is to be reasonably expected, without being traumatic."
Marchionne expects 12.7 million cars and trucks to be sold in the U.S. this year, which puts his estimate on the lower side of automakers' projections. "People are still very reluctant to make long-term commitments to hiring and to capital," he said.
While Marchionne believes the industry is "out of the ditch," he sees a gradual recovery in sales over the next three or four years, and doesn't expect industry-wide sales in 2014 to be close to 15 million.
China, he said, is a looming challenge to the American automakers.
"China is the largest producer of cars in the world. They produce almost entirely for the enormous domestic market, but their future plans for the export market are significant," Marchionne said.
"Even assuming China were to export only 10 percent of what it produces, the risk we face in our home markets is enormous. We cannot afford to be unprepared for the ascent of China, reassuring ourselves of our invincibility."
While Chinese automakers have been promising to arrive in the U.S. for several years, Marchionne said, "They are coming. They have a right to be here."
Fiat plans to have a plant running in China next year that can assemble 300,000 vehicles annually.
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