Chrysler rolls out a new five-year plan

Now managed by and partly owned by Fiat, the Italian automaker, Chrysler desperately needs new cars to build its laggard sales, according to a number of analysts. So far this year, its sales are down nearly 40 percent.

“The top priority is to invest to create a compelling brand and product offering,” C. Robert Kidder, Chrysler's board chairman, said in remarks prepared for a six-hour presentation to industry analysts and reporters. During the presentation, company executives were unveiling their plans for Chrysler's Jeep, Dodge and Ram brands. The U.S. government has pumped US$12.5 billion into Chrysler over the last year and now owns 10 percent of the company. A United Auto Workers health trust owns 55 percent of Chrysler, and Fiat owns a 20 percent stake, which could grow to 35 percent if management reaches performance objectives.

The United States has also won a promise that at least some of Chrysler's success, if it happens, would benefit U.S. workers. Under the financing agreement, Chrysler must either manufacture 40 percent of its U.S. sales volume in the United States, or its domestic production must be at least 90 percent of its 2008 U.S. production volume.

The new Fiat management faces daunting challenges to its hopes of reviving Chrysler. Chrysler's business situation over the last year has been dire.

After General Motors and Chrysler pleaded for government aid, the Obama administration earlier this year quickly decided to help General Motors. According to Steven Rattner, the former head of the president's auto industry task force, the administration “could not imagine this country without an automaker of the scale and scope of General Motors.”

But the decision to aid Chrysler was more difficult because the company's prospects were so dim.

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