Chrysler's Long Road Home

Will Chrysler take off or crash again under its new 5 year plan?With all of the attention paid to the role of Wall Street in the financial crisis or to the political difficulties surrounding the health care reform bill, it is easy to forget that last year around this time some of the nation’s largest automakers were staring bankruptcy in the beady little eyes, and in some cases submitting to its stigmatizing but forgiving ways.

Recalling 21,000+ cars isn’t unprecedented by any means and of course it is a better call than allowing dangerous cars to continue to be on the road. But it comes at a time when Americans are just beginning to move past the difficult period where the Big 3 essentially lost market share, prominence, and in Chrysler’s case, they filed for bankruptcy. Since coming out of that bankruptcy in June and embracing the management control of Fiat (with their 20% stake in the company), Chrysler has been slowly rebuilding its image and its business.

As recently as December the Sterling Heights, Michigan plant was kept from closing, though they were placed under the control of OldCarco LLC, who handles all of Chrysler’s properties and assets still in bankruptcy.

But reminding America just how tricky it is at this historical juncture to run a successful car company by debating whether to keep plants open and recalling vehicles because of safety concerns is exactly what the auto industry does not need.

With the Detroit auto show wrapping up, it should be a good time for Chrysler. Unfortunately, they didn’t have much new to show off at the auto show- so instead they talked about what they’ll be working on in the future. Of course, that’s better than talking about what plants they’ll have to be closing or more things that they have to sell, but the difficulty of seeing them talk about future plans rather than showing off new autos (like everyone else from around the world was doing) is acute.

Chrysler and Fiat SpA chief executive Sergio Marchionne said, “That we've just lived through 2009, it is one of the most painful experiences that any industry can possibly go through. We've been given a second chance. I have absolutely no intention of disappointing."

Are we really hearing a business chief executive talk about pain and second chances? Just kidding. Not really. It has been all of those things, and it’s interesting to watch as Wall Street turns in massive profits again and the car companies struggle to turn a corner to the new auto market.

While they say that they are on pace to turn an operating profit in 2010, there is no doubt that without new cars coming to the showroom floors until the end of 2010, any profit will be the work of accountants and business shuffling, not the success of their cars.

Marchionne takes the long-view, but with at least a nod to the practical. "We're trying to run this business for the long-term. At the end of the day, the question is we're going to make money doing what we do or we're not going to make money. And if the answer is that we won't, then I think we should pack up and go home."

Photo Credit: Tattooed JJ (via Flickr under CCL)