Profits are still elusive.
Chrysler CEO Sergio Marchionne sent an e-mail today to surviving employees on the anniversary of its emerging from a “quick rinse” bankruptcy one year ago.
The company is still losing money and is struggling with an aging product line, poor quality and numerous recalls.
However, Marchionne takes a cautiously optimistic tone in a communication that would obviously find its way into the media.
Below is the memo:
Dear Colleagues,
Today marks the first day of our second year as a new company. Chrysler Group LLC in fact began operations on June 10, 2009, and when I met with you on that day, I expressed confidence that Chrysler would once again be a strong and competitive car maker.
Crisis can bring out the best in a company and its people. Rather than yield to pessimism, our organization has moved forward with a renewed sense of purpose to succeed. Through hard work and tough choices, we made significant progress during the past 365 days.
Among the highlights:
- Last November we publicly revealed an ambitious but achievable five-year plan for rebuilding our portfolio of products and achieving sustainable profitability
- Our alliance with Fiat is taking root, making us part of a strong global team with the critical mass needed to achieve significant economies of scale, fully exploit the related synergies and expand our geographic presence.
- We ended the first quarter of 2010 with an operating profit of $143 million, with major factors being price discipline, the launch of the all-new Ram Heavy Duty pickup (Motor Trend’s “Truck of the Year”) and overall reduced costs.
- We are generating the cash needed to build our brands and invest in products, such as the 16 all-new or refreshed vehicles that will be introduced by the end of this year, representing 75% of our product line.
- Our sales are building momentum, with substantial year-over-year increases in the past two months.
- Our powertrain initiatives are intensifying. The Trenton South Engine Plant has begun building the all-new, state-of-the-art Pentastar V6 engine. In the fourth quarter, the GEMA Plant in Dundee will start producing the 1.4-liter Fully Integrated Robotized Engine (FIRE), which includes Fiat’s innovative advanced technologies to improve fuel economy.
- In May, we began production of the all-new 2011 Jeep Grand Cherokee at the Jefferson North Assembly Plant. We are adding a second production shift to meet expected strong demand for this new vehicle, which has already earned “Top Safety Pick” status from the Insurance Institute for Highway Safety. The launch also highlights the enterprise-wide rollout of the World Class Manufacturing system, which represents a step change in our commitment to quality.
There is still a very long road ahead in our drive to rebuild our business and to deliver on our promises to repay the American and Canadian taxpayers who gave us a second chance. And we do this in recognition of the commitment made by the UAW and CAW.
This one-year anniversary represents a significant milestone.
I want to express my sincere appreciation for all your efforts in the past 12 months. We have all done a lot, and a lot more needs to get done.
Let’s continue to stay focused and move forward on the path we have set.
Thank you. Sergio Marchionne