Bloom More "Encouraged" By Chrysler Plans Than Most
“U.S. encouraged by Fiat plan for Chrysler,” runs Reuters‘ headline, attributed to car czarlet Ron Bloom. After commenting extensively about GM, in which Bloom controls a 60 percent taxpayer stake, he had only this to say about the eight percent government owned Chrysler and its recent plans:
We see management with a huge sense of urgency. We see a huge dedication and commitment, working extremely hard. It’s an ambitious plan.
But did Bloom see the 7 hours of Powerpoint presentations? “Encouraged” wasn’t exactly the description being flung around at the line for porta-potties. Hell, even Detroit’s cheerleader-in-chief and Automotive News [sub] publisher Keith Crain beats Bloom’s take hollow with his headline “This Year The Math Adds Up To 110%.”
Crain opines:
We wish Chrysler and Fiat well with their forecasts. But to say that they might be a tad optimistic would be an understatement. Unless they plan on a miracle sometime soon, they shouldn’t base their production schedules on their forecasts… Every year about this time we hear from the various brands and manufacturers about how great the next calendar year will be for them. Each manufacturer has grand plans for the New Year and can tell you why its sales will show dramatic increases over the next 12 months. Every company has the most exciting lineup in its history with sales forecasts to match. When we get through punching in the numbers, there is always a long pause before we realize that the total adds up to a lot more than 100 percent of what would be reasonable. Chrysler seems to have fallen into that trap.
But even Bloom can’t hide what he really thinks about Chrysler. When asked about possible plans for a Chrysler IPO, Bloom tells Reuters:
Sergio Marchionne has said he thought it was a 2011 event but I think in fairness Sergio would tell you there’s a fair amount of uncertainty in that. We’re not going to push them into the market when the market isn’t ready for them. I think Sergio was clear…that they’ve got a lot of work to do.
That doesn’t begin to cover it. Chrysler will be lucky to limp through the next 12 months with no product changes short of a few Chrysler “special editions.” When you make Keith Crain sound like Robert Farago on the future chances of a Detroit automaker, you know it’s time to dial back the optimism a bit.
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I find it hard to believe that a tough businessman like Marchionne believes in the sales and market-share forecasts that appeared in the Chrysler presentation. Those numbers looked to me like the traditional chest-thumping that goes on at corporate events to convince employees (and perhaps shareholders) that management is hungry for growth and success. That market share bar-and-line graph showed a U-shaped curve, as if the current decline in sales is due to temporary factors that will go away once the new cars arrived--as if there is some physical process that will return Chrysler sales to their "natural" level. Marchionne certainly knows this is nonsense. (Well, I hope he does.) It is true that a couple big hits could do a lot to lift Chrysler's position, as the K-car and minivans did in the 1980s, but since the company is not releasing any specifics about upcoming products there is no reason to think that there is some similar breakout product in the wings. And of course the market is even tougher now than it was back then.