Marriage can be an iffy thing. Especially if you’re an auto company that can’t seem to exist without being coupled, sometimes with a parasite. That’s what the entity commonly just called Chrysler seems to be.
Full disclosure—I worked at the company for 11 years through three of its marriages. One ended in divorce, another as a result of bankruptcy and a third where Chrysler just became the second of its combined name.
I retired in 2016, five years before the company was sucked into another relationship and lost its identity altogether, as part of a blob of corporate Play-doh called Stellantis.
Keep in mind the last three letters in Stellantis are also the final three letters in the suffix “it is” which is a medical term for some sort of inflammation. Appropriate, since the CEO just flamed out and flew the coop with a nice multi-million dollar nest egg.
So this seems like a good time to examine Chrysler’s marriages from both my inside perspective and a more macro view to better understand how this corporate Sadie Hawkins should go about chasing its next partner—or should it?
Merger of Un-equals to Daimler
In 1998 the all-American Chrysler Corp. was joined in a shotgun marriage to the German automaker Daimler AG. It was billed as a “merger of equals.” There should have been a pre-nup. There was nothing equal about the marriage. The Germans were clearly in charge.
I joined the DaimlerChrysler in 2005 as a contractor—hired to ghost write and manage the company’s first corporate communications blog. A year later, having been a broadcast and print journalist since 1973 and covering autos since 1989, a new digital communications team was created around me. I was hired on staff to run it.
My boss at the time sent me to attend the annual “communicators conference” at DCX headquarters in Stuttgart, Germany. To get there I was granted a seat on the company’s plush jet.
Somewhere over the Atlantic I received some valuable insight as to how the Chrysler side of the marriage was regarded. I overheard a couple of engineers complaining that “they want us to build Chrysler vehicles with Mercedes quality on a Chrysler budget—impossible!” Yes, it was.
During the actual meeting, a German executive declared any quality issues should be blamed on Chrysler—and welcome to Stuttgart. Ach!
Some marriage. Even the late Dr. Ruth Westheimer couldn’t fix that relationship.
Zetsche announces impending divorce
On Valentines Day 2007 the Germans decided to ditch their American spouse with little warning. At the “annual news conference,” held for the first time at Chrysler headquarters in Auburn Hills, Michigan, CEO Dieter Zetsche spilled that all options were open with regard to the future of the tenuous tie-up.
Cerberus takes over
By summer the divorce was final and Chrysler found itself in a new abusive relationship—this time with capital management company Cerberus—yes, the three-headed dog guarding the gates of hell.
The upside was the company went back to being just Chrysler. The downside was everything else. Cerberus had hoped to buy and flip Chrysler at a profit and the new CEO, Robert Nardelli, known for being passed up as successor to General Electric boss, Jack Welch and for being fired from Home Depot after its stock tanked as a result of his bad decisions.
Cerberus had no experience running an auto company and it showed. Its main strategy was simply firing people. I watched as dozens of my immediate co-workers and hundreds more were suddenly told to grab a box, fill it with their stuff and take a hike.
There was a guy installed in one of the little glass offices on our floor who spent his days hovering over a computer and transferring figures to a white board with the mission of plotting where, and whom, to cut.
At one point, to show the world the company was thinking of the future, the automotive media was invited to a big news conference, along with CNBC’s auto reporter, to anchor live coverage from our headquarters of the unveiling of a line of “production intent” electric and extended-range vehicles under the acronym, ENVI..the first letters of the word, “environment.”
There were three ENVI vehicles—a coupe based on a Lotus that went by the name Dodge Circuit, and two others based on a Jeep Wrangler and Chrysler Town and Country minivan. Coverage was massive.
In fact, the CNBC reporter called me a few weeks later to say if I could get the Dodge Circuit to New York City by that Thursday, he could get it on the Today show along with the Chevrolet Volt.
No problem. I flew out to NYC for the show and was both heartened and horrified when Today host Matt Lauer said to the CNBC reporter off-air he liked the Volt but if given the choice, he’d go for the Dodge.
Here’s part of the segment. Apologies for the rough quality.
Cerberus said the ENVI vehicles would go into production by 2010 but they never did.
Fiat and Marchionne to the rescue
Greatly summarizing here, the combination of the recession and the company going into bankruptcy, along with General Motors Co., buoyed by federal government bailouts, led to Cerberus exiting and Fiat S.p.A. at first taking a partial stake in Chrysler with Fiat CEO Sergio Marchionne leading both automakers.
At this point Chrysler employees were at about their lowest point after so many co-workers and friends being shown the door, the company barely hanging on and the future, just an empty concept.
But that all changed on June 10, 2009 when Marchionne spoke to employees in the well of the company’s town square, the four-story common area of its Technical Center called Tech Plaza.
His optimistic message, quoting Bruce Springsteen and tossing in some words in Swahili, had an immediate positive impact. Over the course of less than an hour hope was actually an option and a real possibility.
Morale was rebounding, future vehicle development resumed and even the food in the cafeterias was better. Our corporate communications office was across the hall from the executive cafeteria, from which the wonderful fragrance of garlic and simmering sauces bled into the concourse.
Even the coffee was better. Suddenly the old coffee pots in the common areas brewing Folgers were either replaced or joined by espresso machines. In our suite our wonderful Italian boss installed a device that resembled an elaborate Keurig with more than a dozen choices of brewed beverages at our disposal.
Damn..maybe this marriage was working.
But alas, all wasn’t perfect. The return of the Fiat brand to the U.S. was botched by a flawed rollout, angering dealers who spent millions building dedicated showrooms but had little to no vehicles to display or sell right away.
Plus, the little Fiat 500 just didn’t connect with the American public which had eyes only for big SUVs and pickup trucks.
In 2014 Chrysler’s identity took another hit as Fiat became a majority owner of the company and the new Fiat Chrysler Automobiles, or FCA, was formed—its shares listed on the New York Stock Exchange.
Not only was the Chrysler name relegated to second billing again, but the company could no longer use its iconic Pentastar logo—an impossible mandate since the giant window on the top floor of the Chrysler headquarters building is in the shape of the Pentastar, meaning it will live as long as the building is erect.
While things seemed to be going well, Marchionne had other ideas.
In May, 2015, during a conference call related to the company’s latest financial results, he rocked the automotive world with a presentation titled “Confessions of a Capital Junkie.”
In a series of Power Point slides, Marchionne made the argument that automakers are wasting money through their addiction to capital spending, duplicating each other’s efforts, with insufficient return.
He contended the cure was consolidation through mergers and joint-ventures which would avoid this expensive duplication.
Not one to blow smoke, Marchionne sought a partnership with General Motors which CEO Mary Barra repeatedly rebuffed.
Tragically, Marchionne died unexpectedly in July, 2018, two years after my retirement from the company. He passed away without managing to find another company that wanted to get married.
For three years FCA continued, as the Chrysler brand’s portfolio dwindled to just the Pacifica minivan, Dodge was limited to the Charger and Challenger, Fiat’s U.S. sales were negligible, with only Ram Trucks and Jeep doing any appreciable business.
Tavares and PSA take over
In 2011 the company finally found a suitor and its well-regarded CEO to swoop in and put things on solid ground.
The French company that made Peugeot and Citroen vehicles and had taken over GM’s European brands was led Carlos Tavares.
He had a great reputation as a leader and cost-cutter and he promised to give Chrysler’s brands time to find themselves and rebound.
The companies married under the new name Stellantis which immediately drew comparisons to pharmaceuticals used to treat anything from rashes to worse.
Again, Chrysler’s identity took a backseat and its brands in no better shape. Inexplicably, at a time when vehicle affordability became a major roadblock for many consumers, with the exception of the light-selling Fiat brand, the company had no entry-level vehicles and actually took Jeep further upmarket with the Grand Wagoneer which, with options, can top $100,000 and is languishing on dealer lots.
The company under Tavares was also slow to enter the electric and hybrid electric markets.
Employees were unhappy, dealers were unhappy, along with the United Autoworkers union, and finally, the company’s board of directors.
Tavares’s planned retirement in a year couldn’t wait. He had to go now.
After Tavares
What will happen to what’s left of Chrysler now?
The Stellantis board is looking for a new CEO who may seek to re-grow the Chrysler and Dodge brands, or eliminate them, properly balance the Jeep product line, support Ram’s push in the competitive pickup market, energize the company’s electrified vehicle programs—or the corporation based in The Netherlands may simply send the American off to find another means of support in another corporate marriage.
Perhaps it’s time to admit it may be time to leave the married life behind, strip down to Jeep and Ram, nurturing the successful branches of the family and giving up the mansion for the cottage, living more simply, but happily.
As the late, wonderful humorist Erma Bombeck once said, “Marriage has no guarantees. If that’s what you’re looking for, go live with a car battery.”
Author’s note: I worked for Fiat Chrysler and its predecessors from 2005-2016 in its corporate communications department as head of digital communications.
