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Chrysler unveils five-year business plan

The automaker, saying it aspires to be 'a great public company once again,' outlines its Jeep, Dodge and Ram brands.

November 05, 2009|Peter Whoriskey | Whoriskey writes for the Washington Post.

AUBURN HILLS, MICH. — Chrysler, the U.S. automaker that has come closer to annihilation than any of its rivals, rolled out its new five-year business plan Wednesday, saying it intends to become "a great public company once again."

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%.

"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 unveiled their plans for Chrysler's Jeep, Dodge and Ram brands.

The U.S. government has pumped $12.5 billion into Chrysler over the last year and now owns 10% of the company. A United Auto Workers health trust owns 55% of Chrysler, and Fiat owns a 20% stake, which could grow to 35% 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% of its U.S. sales volume in the United States, or its domestic production must be at least 90% 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 this year quickly decided to help General Motors. Steven Rattner, the former head of the president's auto industry task force, said 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.

"Chrysler was tougher, having been larded up with debt, hollowed out by years of mismanagement and operating as just a North American player," Rattner said in a speech last month. "Chrysler, for example, did not have a single car that was recommended by Consumer Reports," a magazine that publishes reviews of automobiles and other products.

Chrysler's rollout Wednesday, which is heavy on product descriptions, is intended to answer such criticism.

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