Sergio Marchionne apparently told Fiat Chrysler dealers this week: “Never mind.” All of the Chicken Little-ism that he demonstrated a few weeks ago — controversially conducting an open campaign to find a merger partner — should be relegated to yesterday like the K-Car, he indicated.
After trying to hector General Motors GM +1.68% CEO Mary Barra and others into acknowledging that a merger with Fiat Chrysler would be the best way for both companies to cope with the intense capital demands and low financial returns in their industry, Marchionne this week reportedly told his company’s 7,000 dealers at a meeting in Las Vegas that Fiat Chrysler actually could stand on its own just fine.
He said he “isn’t under pressure to merge with another car company, and … the company can finance a competent product portfolio on its own,” the Wall Street Journal reported.
Specifically, Automotive News reported, Marchionne insisted that his high-profile lobbying to sell a Fiat Chrysler merger to GM was “not a slash-and-burn strategy” and that any potential merger, anyway, “will not have an impact on dealers.”
No doubt such talk also could reassure many of the Fiat Chrysler employees who were made nervous this summer by their boss’s very open search to merge with a more powerful partner, which not only implied his assessment of long-term weakness in his own company but also marked perhaps thousands of his current charges as superfluous to the company’s long-term future.
To underscore his point about the viability of Fiat Chrysler, at the dealer meeting Marcionne showed off a number of redesigned or entirely new models, including three Jeeps and a plug-in hybrid minivan. He also reportedly updated the company’s ambitious new-product plan for the next few years.
Actually, Marchionne set the ongoing drama in motion in the spring of 2014 when he used the unveiling of a bold five-year, detailed product and brand-evolution plan to parry the skeptical view of outsiders that Fiat Chrysler didn’t currently have enough vehicles that met the industry standard and that its cupboard was too bare of high-impact future models to survive. He sketched a plan that, among other things, envisioned the burgeoning of Jeep’s product line and of its brand presence globally, the evolution of Chrysler into a mainstream car marque with a more extensive portfolio, and the slimming of Dodge into a lower-volume, performance-focused brand.
To a significant degree, Marchionne already has succeeded in activating parts of that plan. Jeep, for example, is becoming a more global brand, with production of its new Renegade compact model in Italy for sale in the United States and elsewhere. And in its home market, Jeep has set a new sales record in every month dating back to November, 2013, and has seen sales increase by 21 percent this year over 2014.
Meanwhile, 2015 sales of Chrysler’s first new model meant to expand the brand, the all-new version of the 200 sedan, were 128 percent ahead of the previous Chrysler 200 model through July.
And Marchionne and his lieutenants are following the new playbook for Dodge as well. They got rid of Avenger, one of Dodge’s performance nameplates, which has helped depress sales so far this year. But sales of the models to which Dodge has been paying most attention, to underscore its performance chops — Charger and Challenger — are up this year.
Fiat Chrysler executives also gave Dodge dealers at the Las Vegas meeting more to get excited about in the rapid sharpening of Dodge’s brand identity, promising a parade of new products including a Dodge Barracuda convertible and a next-generation Dodge Charger.