Let's carry out the five year plan in 4 years! Picture courtesy nhikmetran at flickr.com
Today is the day. Today, Sergio Marchionne will present his 5 year plan for Fiat. 5 year plans are usually reserved for a reunion of unreformed communist party elders. But Fiat respects traditional values.
In his opening remarks, Marchionne took a shot at the mongers of gloom and doom. He had two words for analyst reports that dissed Chrysler’s operating profits: “Boulevard press.” This is Euro-slang for tabloids, or the business section of the National Enquirer.
“As we all know,” said Sergio, “in business it is ultimately only facts that prevail.”
Then, the facts were presented.
Fiat Group, which controls Chrysler, posted an unexpected first-quarter loss of €25m ($34m), reports USA Today from Turin. What’s worse, Sergio Marchionne’s crystal ball says that auto demand in Europe will drop 15 percent this year as governments phase out the cash-for-clunker programs.
Fiat generates about half of its worldwide sales in Europe. At home in Italy, Premier Silvio Berlusconi dropped any plans to extend Euros for jalopies, because Marchionne wasn’t interested. Marchionne fired back that he was interested. But it was too late: Basta soldi! As far as the 15 percent drop is concerned, some think Marchionne is an optimist. Germany dropped nearly 23 percent in the first quarter.
Oh, right, that. Marchionne predicted that Italy would outdo the Germans. He said, the Italian market would fall by around 30 percent in the next three quarters. Take that.
Want more prevailing facts? How about this one:
“The crisis which erupted in the latter part of 2008 swung the pendulum of the markets back to the Middle Ages,” said Marchionne, while Reuters was taking notes. Want more? “The shockwave it created hit the world so hard that only a war could have been more devastating.”
He can scold them all day long, but the boulevard press writers love Marchionne. Always good for a quote. Or two. Or three.
The 5 year plan will be presented later in the day. I yield to the Ed’s expertise on that. He sat through seven hours of PowerPoint presentations on Chrysler’s 5 year plan. He knows the 5 year plan beat best.
Before we get all huffy about five-year plans, note that many Japanese companies have 5/10/25+-year plans and do quite well. By comparison, GM at it’s worst had, maybe, a 0.25-year strategic plan.**
One trick to planning is not to put items appropriate for a short-term tactical plan into a long-term strategic one, or vice versa. Another is to distinguish between “plans” and “goals”. Goals are what you want to achieve; plans are how you’re going to do it, based on actual research and logic. Sometimes the wishful thinking of the former infects the latter.
** Admittedly, it consisted mostly of lapel pins with the number “30” on them and whatever Bob Lutz sketched on a napkin that day.
I would have thought that GM could have done theirs with a day-planner.
“5 year plans are usually reserved for a reunion of unreformed communist party elders. But Fiat respects traditional values.” Bertel, I love how you turn a phrase…
“He can scold them all day long, but the boulevard press writers love Marchionne. Always good for a quote. Or two. Or three.” And I bet they are breathing a sigh of relief, now that Marchionne has found his voice … after all, who’s going to say all the good stuff after Lutz goes into retirement and donates his quip-machine to the Smithsonian?
I wonder if the plan will include lots of neat electric cars and groovy power point presentations?