Marchionne Is a Believer in City of Detroit

4A WWW.FREEP.COM SUNDAY, JAN. 8, 2012 ◆ COVER STORY◆CHRYSLER'S FEARLESS GENERAL Marchionnex is a believer in city of Detroit x

ere’s what Italian-born, banner of Detroit. HCanadian-educated Sergio “We’re the scruffy guys, Marchionne, the CEO of Chrys- right?” he said. “We’re the ler and Fiat, thinks of Detroit: guys that have got sort of this “This town has got nothing mutt DNA because of the fact to apologize about. The quality that we ended up being here of life here is underestimated, TOM WALSH TALKS WITH and a lot of people thought that and the quality of the work that CHRYSLER CEO ABOUT we shouldn’t be here, right? I goes on here … is underesti- mean we were sort of usurping mated,” he told the Free Press HELPING THE MOTOR CITY somebody else’s right to live. in a wide-ranging interview. “We found ourselves totally Last week, Marchionne compared with the massive legitimate in sort of defending backed up that talk with action, out-migration of Chrysler’s this town because a lot of the announcing a third shift and corporate campus from High- people are incredibly skeptical 1,100 new jobs at Chrysler’s land Park to exurban Auburn of the ability of this town to Jefferson North assembly Hills two decades ago under really make a comeback. plant in Detroit, plus 150 jobs to then-CEO Lee Iacocca. “It’ll never be what it was,” reopen the nearby Conner And Marchionne is defi- he said of Detroit. “I mean, Avenue plant and build the nitely not leaving the gleaming don’t go back and try and relive 2013 SRT Viper. 504-acre Chrysler Headquar- history. It won’t happen. But Oh, and he signed on to ters and Technology Center in preserve what’s preservable chair the 2012 fund-raising aquixotic crusade to rescue and build on it. campaign for the United Way Detroit’s distressed core. “Our people have always for Southeastern Michigan. “We’re looking for ways in believed,” Marchionne said, Next move: Look soon for which we can make a contribu- “and we need to make an effort Chrysler to occupy office tion,” he said, when I asked him because I think we can help. 2009 PHOTO BY JOE WILSSENS space in downtown Detroit and how Chrysler — now majority- It’s a worthwhile cause.” Chrysler CEO Sergio Marchionne addresses employees at the Auburn Hills headquarters. Chrysler has move 50-70 people there, most- owned by Italy’s Fiat — came embraced Detroit with its “Imported from Detroit” ads and will soon move some workers downtown. ly sales staff to work with its to embrace the “Imported from Stick your face in it dealer network in the Great Detroit” theme in its celebrat- Marchionne, a classical was wowed by the quality of not care about Detroit. I think know what, I’m going to go Lakes region. Chrysler is in ed marketing campaign. music buff, said he attended a the orchestra, the venue’s that is very wrong.” down and do something in “the final stages” of concluding Post-bailout Chrysler, he Detroit Symphony Orchestra acoustics and a choir that was He noted that suburbanites downtown Detroit.’ ” adeal for that space, said suggested, has the ideal un- performance of Handel’s “Mes- as good “as any European choir didn’t seem to worry as long as Easy to say, perhaps, for a spokesman Gualberto Ranieri. derdog culture for carrying the siah” in mid-December and I’ve heard — any.” things were OK in Oakland globe-trotting executive who He declined to name the loca- Interestingly, Marchionne County. spends much of his time on tion because the contract has isn’t the only European auto “Unfortunately,” Mar- airplanes. not been signed. “IT WOULD BE GREAT IF, FROM A executive perplexed by the chionne told the Free Press, But to anyone who doubts CORPORATE STANDPOINT, A LOT OF long-term exodus of people and “there are a number of people Marchionne’s intent or ability Preserve and build investment from Detroit. that have made a lifestyle to make an impact in Detroit, Marchionne isn’t trying to PEOPLE … SAID, ‘YOU KNOW WHAT, I’M Dieter Zetsche, Chrysler choice to live on the fringes of just remember, there are le- tout himself as some sort of CEO from 2000-2005, when the the problem and not in the gions of people who thought savior for a downtrodden city. GOING TO GO DOWN AND DO SOMETHING company was under German problem. I think it would be both Fiat and Chrysler would He knows that a few dozen IN DOWNTOWN DETROIT.’ ” control, told me in 2003: “I’m great if, from a corporate be corporate corpses by now. office jobs in downtown De- always surprised that people standpoint, a lot of people stuck ❚ CONTACT TOM WALSH: 313-223-4430 OR troit are a drop in the bucket SERGIO MARCHIONNE, Chrysler and Fiat CEO don’t understand and just do their face in it and said, ‘You [email protected] MARCHIONNE: CEO is auto exec of the year Sergio FROM PAGE 1A Marchionne The man is juggling more titles than most people could remember: CEO of unplugged Chrysler, CEO of Fiat and chief operat- ing officer of the NAFTA region. He al- Fiat and Chrysler CEO Sergio so is chairman of Fiat Industrial and Marchionne took time in early chairman of CNH Global, an affiliate of December to talk to the Free Fiat Industrial. Press about Chrysler’s comeback Marchionne is a lawyer and accoun- and other issues. Here are some tant by training who took the reins at highlights. Fiat in 2004 as it languished near death. He had run a Swiss-based pharmaceu- Question: Did you get more tical company, Lonza Group, and engi- involved in the planning of neered the sale of Algroup to Alcan the Dodge Dart than you nor- when he was CEO of the Swiss alumi- mally would for most vehi- num manufacturer. But he had no prior cles? automotive management experience. Answer: Yes, because it was the He had been on the Fiat board of direc- first rollout of the Fiat endow- tors since 2003, where he impressed ment of architectures, and so the John Elkann, the heir of Fiat’s founding execution of that transfer of tech- Agnelli family. nology was crucial. It has been nearly eight months since Chrysler repaid $7.6 billion in Q: As positive a story as it’s loans from the U.S. and Canadian gov- been here on the U.S. side, ernments. you’re facing a crisis in Eu- Now, Marchionne is shooting for rope. Talk a little bit about combined annual sales of nearly 6 mil- MAY 2011 PHOTO BY JARRAD HENDERSON/DETROIT FREE PRESS how that’s going to affect you lion cars and trucks for Fiat and Chrys- Chrysler CEO Sergio Marchionne is leading the automaker’s rise from its 2009 bankruptcy, with soaring sales and the early and Fiat. ler by 2014. If he achieves his goal, Mar- repayment of government loans. He’s on the way to saving two automakers in less than a decade, having already saved Fiat. A: What Europe does going for- chionne will have saved two automak- ward remains probably the single ers in less than a decade. Marchionne Politecnico de Milano in Italy. largest issue that I and the man- “Without Sergio Marchionne, Amer- talks to then- agement team need to deal with. ica’s No. 3 automaker would almost Gov. Jennifer Chrysler roars back surely not exist today,” Steven Rattner, Granholm at Aside from the Fiat 500 stumble, Q: How does that affect the former head of President Barack Oba- the 2010 De- Chrysler is hitting most of the targets corporate convergence of Fiat ma’s automotive task force, wrote in a troit auto set in November 2009, when hundreds and Chrysler? 2011 profile of Marchionne in Time. show. Mar- of analysts, dealers and journalists A: As a general comment, it Marchionne has a tremendous ca- chionne is the gathered in Auburn Hills to hear Mar- speeds it up. pacity to devour new ideas and data, Free Press’ auto chionne’s team’s grand five-year plan. said Ralph Gilles, Chrysler’s design executive of Chrysler should finish the year with Q: What are your thoughts on chief and CEO of Chrysler’s newly the year in the about $55 billion in total sales, hitting apossible initial public of- formed SRT brand. inaugural Auto- the upper end of the forecasted range. fering and the timing of it at “He’s got some kind of a mega Penti- motive Leader- Chrysler is on track to sell 2 million this point? um processor in his brain,” Gilles said. ship Awards. cars and trucks this year, about 200,000 A: Still late 2012 or early ’13. TONY DING/ASSOCIATED PRESS shy of the 2009 plan. The Battlefield The plan calls for Chrysler’s global Q: Are you any closer now to Marchionne talked to the Free Press condly, one that will survive me.” Power of a Dynasty,” a book by Jenni- sales to increase from 1.3 million to reaching agreement with the about his management style, Chrys- Marchionne is known for taking fer Clark. 2.8 million by 2014. VEBA (the UAW’s retiree ler’s future products and its progress control of small details while granting On Sept. 14, with two hours left be- health care trust) on what the since bankruptcy from the company’s his management team wide-ranging re- fore Chrysler’s four-year labor con- ‘We’re 20% done’ value is of their stake? conference room 4E, which he calls sponsibilities. tract with the UAW was to expire, Mar- But survival isn’t good enough. Mar- A: We haven’t approached the “the Battlefield.” “You get a huge amount of rope here chionne issued a letter scolding UAW chionne predicts 2012 will be the most topic at all. … We have an obliga- The U-shaped room is equipped with when you sit on the management President Bob King for missing a pre- challenging year because the Dodge tion to try and deal with them by flat-screen computer monitors and team,” Marchionne said. “The rope scheduled meeting. Dart is the only major new product the beginning of ’13 in terms of movable microphones for each execu- comes back incredibly quickly the min- Marchionne had flown back from Chrysler will launch. approaching the capital mar- tive. An espresso machine sits off to the ute that you start falling off the tracks.” Europe only to find King tied up in ne- “We’re 20% done because I think kets. … We’ll start raising the side. Executives, or at least the CEO, gotiations with General Motors. that most of the industrial choices are topic with them at the end of ’12. are allowed to smoke here. Fiat 500 fiasco “I know that we are the smallest of behind us,” Marchionne said. On the wall above Marchionne’s Marchionne pulled that rope back in the three automakers here in Detroit, The Dart is Chrysler’s first car Q: The one area where you chair and slightly off to the side is a November when Laura Soave, head of but that does not make us less rele- based on a Fiat-engineered underbody have not performed as well as poster for Dodge that says, “Give a Fiat North America, left the company. vant,” Marchionne wrote. and aimed at the compact segment that expected is the Fiat 500 in- SHIT,” a battle cry adopted by Gilles Chrysler had hoped to sell 50,000 He and King mended fences. Chrys- has been Chrysler’s Achilles’ heel for troduction. How much will and Dodge’s advertising agency to sig- Fiat 500s in North America after the ler and the UAW hammered out an years. that hurt you going into 2012? nify the difference between the pre- brand’s 28-year absence here, but sold agreement that was ratified in October. “The big stuff is coming in ’13,” he A: It hasn’t hurt us. We launched and post-bankruptcy Chrysler. only 26,294. Marchionne has since praised King and said. the car a year early. That’s the “We kept on getting information exchanged even harsher words with Next year, Chrysler plans to launch bottom line. … There’s obviously Chrysler’s espresso culture back that the dealer network was com- some Italian unions that Fiat negotiat- eight new cars, crossovers or SUVs, another car coming, and then we In a little more than two years, Mar- ing on stream,” Marchionne said. ed with in 2011. possibly including a Chrysler 100 small need to get (dealers) ready for the chionne has drawn the best from Fiat’s Delays in licensing, building per- Last year, Marchionne pulled Fiat crossover. The company also plans to Alfa (Romeo) introduction, which technology and Chrysler’s design-driv- mits and renovations delayed the open- out of Confindustria, Italy’s powerful introduce redesigns of the Chrysler is coming. en heritage with a finesse that Daimler ing of many Fiat stores until late 2011, business lobby, and threatened to move 200, Jeep Liberty, and a Grand Chero- never approached in the decade it as well as a national ad campaign. production out of the country without a kee diesel engine, and also reintroduce Q: Where is Chrysler at now in owned Chrysler. “We launched the car a year early,” favorable labor deal. the Alfa Romeo brand to the U.S. terms of its turnaround plan? He has sped up decision making by Marchionne said. “That’s the bottom The moves have put Marchionne in It likely will take until 2013 to com- A: We’re 20% done because I introducing an organizational struc- line.” the center of Italy’s effort to reform its pletely merge Fiat and Chrysler. think that most of the industrial ture that gives executives two jobs: one labor practices. “The worst is over,” Marchionne choices are behind us. … The that is brand specific and another that Lightning rod “There are many people that think said. “Right now, execution is key be- worst is over. Right now, execu- involves an operational role. Marchionne is a lifelong poker play- that Marchionne plans to move the cause the plans are pretty well laid tion is the key because the plans “We designed an organization that er and fearless when it comes to high- headquarters — the brains — of the out.” are pretty well laid out. has two objectives,” Marchionne said. stakes negotiations, according to company outside of Italy,” said Gianlu- ❚ CONTACT BRENT SNAVELY: 313-222-6512 OR — Brent Snavely “One is to breed my successor, and se- “Mondo Agnelli: Fiat, Chrysler and the ca Spina, dean of the business school at [email protected]