The Detroit News - The latest Italian phrase for "industrial wingman" is spelled Chrysler Group LLC.
Nearly five years after Daimler AG dumped the Auburn Hills automaker because it was a middle American mediocrity single-handedly destroying the august German automaker's financials, the purported loser is now the profit engine driving Sergio Marchionne's transnational experiment.
Literally. How much of the profit booked by Fiat SpA, which owns 58.5 percent of Chrysler, is attributable to the American arm of Italy's industrial icon, an analyst asked the CEO of both companies Wednesday. "All of it," Marchionne replied crisply.
In yet another turn of the automotive circle, Chrysler is on track again to be the global auto industry's surprise darling with its growing top line, expanding profits, increasing production, improving quality and a marketing moxie tied to Detroit's roots. All of it is hard to ignore.
Add the political dimension of Chrysler's federal bailout-enabled reversal — touted incessantly by Team Obama on the campaign trail — and the early repayment of Treasury loans, and the smallest of this town's three automakers officially can be declared back from the dead.
A year ago, Chrysler predicted adjusted net income for 2011 would be as much as $500 million; it delivered $734 million. It said free cash flow would be slightly more than $1 billion; it delivered $1.95 billion. Chrysler shipped 2 million cars and trucks last year; it expects to ship 2.4 million this year, to boost revenue by $10 billion to roughly $65 billion, to increase what it calls "modified operating profit" by 50 percent to $3 billion.
That sound you should hear, but won't thanks to liberal use of the sound deadeners favored by Mercedes-Benz, are collective jaws hitting the ground in Stuttgart and the trading floors of Frankfurt. Yes, Gretel, American designers, engineers and autoworkers really can build cars and trucks that people want to buy, that deliver profits and boost market share.
They just couldn't do it under the ownership of Germans or the private-equity brainiacs of Cerberus Capital Management LP, the No. 3 automaker's sequential owners who give new meaning to the term know-it-alls. They didn't, as Chrysler the Comeback Kid is demonstrating.
It took the leadership of a hard-driving Italian reared in Canada whose studied humility, spiked with bracingly frank assessments of challenges ahead, is striking in its antipathy for the perceived Teutonic arrogance in Chrysler's former owner or the market predations of Volkswagen AG or both.
Marchionne is realistic about business assumptions, confident enough to detail goals achieved (financials and market share), humble enough to concede mistakes (the underwhelming launch of the Fiat brand in the United States) and impatient enough to publicly warn the Italian side of his "house" that Chrysler alone contributing to Fiat profits is "the ingredients of an unhappy marriage."
Yes, it is, as old Chrysler hands can testify. To the extent they bothered to listen, they heard German shareholders take to the microphone at annual meetings in Berlin to denounce Chrysler. They saw the media reports, witnessed the haughty demeanor of erstwhile colleagues, realized that Chrysler never would become a partner in the German-American firm.
Now Chrysler finds itself on the upside of the equation. Here, purified by bankruptcy, restructuring and cold-eyed management, is a smaller automaker with defensible labor agreements, a rationalized manufacturing network and a reconfigured product plan winning market share. There, in Italy, is the controlling parent struggling to discipline itself.
The sovereign debt crisis rolling across Europe is claiming heads of state, driving calls for government austerity and dampening consumer demand and confidence. The uncertainty imperils such mass-market automakers as Fiat and increases pressure to radically restructure or risk losing production and jobs to eastern Europe, Turkey or even Chrysler plants in North America.
It's that simple. And, for a refreshing change, Chrysler is on the right side of the pond.
