The US government, which seems anxious to give Mr Marchionne a chance to
rescue the nation’s perennial also-ran automaker, approved the latest move,
from 25 to 30 per cent ownership. Another non-cash jump, to a 35 per cent
stake, should come later this year, once Fiat has produced a highly energy
efficient vehicle for Chrysler.
The subsequent stages of Mr Marchionne’s ambitious financial plan for Chrysler
look more challenging, even if it succeeds in holding a 2011 initial public
offering. The debt burden remains a big drag. Interest expense on the gross
debt of $13.1bn at the end of 2010 was the main reason the year’s $763m
operating profit became a $652m after-tax loss.
For substantial financial progress, much more profitable operations are
required. Chrysler’s 1.8 per cent operating margin in 2010 was less than a
third of Ford’s. Even Fiat managed 3.1 per cent, even though it is thought
to lose money in its Italian assembly plants. Nor can Chrysler simply
emulate Fiat; it has nothing comparable to its highly profitable luxury
business (Ferrari and Maserati) or its leading position in the fast-growing
Brazilian market – 7.3 per cent annual growth in cars produced over the past
five years.
Mr Marchionne has plausible plans (new products, lower costs) to turn round
both companies. But the travails of Carlos Ghosn offer a cautionary lesson.
Not only has the hyper-ambitious Lebanese-French chief executive of Renault
and Nissan struggled to run both companies well, but Renault’s chief
operating officer has just been forced out – in a scandal that hinges on
excessive corporate self-confidence.
Dit artikel is oorspronkelijk verschenen op z24.nl