Chrysler CEO sees continued success for automakers

Durable goods purchases (think cars and appliances) were up in December, stoking the speculation of a recovery.

Sergio Marchionne.

Kai Ryssdal: It's called the North American International Auto Show, the big carmaking gathering that kicked off this morning in Detroit. It is -- as most auto shows are -- an event where manufacturers show off their new machines.

The Dodge Dart is Chrysler's big entry this year in what looks to be a fairly promising year for the Big Three. Sergio Marchionne is the CEO of Chrysler and the Italian automaker Fiat, which owns almost 60 percent of Chrysler. He's in Detroit at the show. Good to have you with us.

Sergio Marchionne: Good to be here.

Ryssdal: So it's been quite a week for the American automobile industry: great sales figures last week, big auto show this week. Are you ready to say that Detroit is back?

Marchionne: Yeah, I made a comment this morning, I was speaking to some of the journalists on the stand -- when you walk around, you get the distinct feeling that the Detroit Auto Show hasn't been like this since the '90s. So whatever it is that we lived through in terms of purgatory and hell for the last five years, I think we've paid our penance and life moves on from here. But the prospects are quite good.

Ryssdal: Tell me a little bit more about that -- what is Fiat and Chrysler going to do to build on that momentum that you clearly think you have?

Marchionne: Look, there's a lot more work that's underway. Most of the products will be visible in 2013, and we'll see over 13.5 million cars as the sales number for this year, and that number should be at or around 14 million or slightly above that number for 2013.

Ryssdal: You know, you keep saying 2013 -- are you taking 2012 off? I mean, you've got 12 months before you get to the big year for you.

Marchionne: No it is, but I think we're seeing some sense being restored to the marketplace. We've taken out all the excess capacity that the system needed to take out. We're rebuilding the car business now a piece at a time. But I think the base on which we're doing this is a lot stronger.

Ryssdal: Let me ask you about that: You spent $2 billion, plus or minus, a couple of years ago to buy Chrysler, and it sounds certainly like you feel like you got your money's worth. Did the American taxpayer and the bailout of the auto industry -- did they get their money's worth?

Marchionne: Look, what I know is that we walked into an entity been cleansed through a Chapter 11 process and that received over $7 billion of financing from the U.S. and Canadian taxpayers. All that money was paid back on May 24, with interest. We paid 19.7 percent interest to the United States Treasury on those advances. I think the U.S. taxpayers got their money's worth, certainly in terms of the funding that was provided to Chrysler coming out of bankruptcy. The number of jobs that have been created by the resurrection of Chrysler and the benefit to the underlying economy is far outweighs any other financing that may have been put in place for these entities at the time.

Ryssdal: I read this morning as I was getting ready for this interview that Chrysler accounts for two-thirds of your profit. First of all, is that right? And second of all, I think it's kind of interesting that Chrysler gets two-thirds of Fiat-Chrysler's profit.

Marchionne: Yeah, I'm not sure it's that high, but certainly it's about 60 percent in today's market, given the fact that Europe today is in the condition that it's in.

Ryssdal: It's an interesting point, the condition that it's in. How worried are you about Europe for the Fiat part of your company?

Marchionne: I'm worried about Europe in general. I think there are a number of very difficult decisions that Europeans need to make going forward. I'm hopeful that Europe will get its act together; if it does, then I think consumers will come back in and restore some type of sensible demand. But today, the markets are not in good shape.

Ryssdal: Are you going to fully merge Fiat and Chrysler at some point, a la the Daimler-Chrysler arrangement of a number of years ago?

Marchionne: Yep.

Ryssdal: You are?

Marchionne: By the way, the parallel with Daimler-Chrysler, I find a bit disturbing.

Ryssdal: Well it's a little tricky because it didn't work out so well.

Marchionne: That's exactly why I find it disturbing. But I think that the merger of the two companies is inevitable. We're now running it as one entity anyway. So we need to bring the governance structures together.

Ryssdal: And then finally, are you going to take it to the market? Are you going to bring Chrysler public again?

Marchionne: It has to in some fashion.

Ryssdal: When?

Marchionne: No earlier than '13. And no later than '15.

Ryssdal: 2013 is a magic year for you, I guess.

Marchionne: It's a magic year. We'll talk again then.

Ryssdal: All right, I'll give you a call. Sergio Marchionne, the CEO of Fiat and Chrysler. Thank you very much for your time.

Marchionne: Thanks.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

Sergio Marchionne.

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