Sergio Marchionne: Resurrecting Chrysler

Like most of Detroit's automakers, Chrysler was saddled with a stifling bureaucracy, which Marchionne quickly culled. To change the management structure, he combed through the company and found 26 young leaders who would report directly to him.

Steve Kroft: Were they on the management fast track?

Sergio Marchionne: No. Some of these people were buried inside an incredibly hierarchical organization that, you know, all pointed to the top. This place was run by a chairman's office.

Sergio Marchionne: That's the Tower, right?

Steve Kroft: Uh-huh (affirm).

Sergio Marchionne: And the chairman's office is the top floor. It's empty now. We use it as a tourist trap. We bring people up there.

Steve Kroft: Why did you leave?

Sergio Marchionne: Because nothing happens there. I'm on the floor here with all the engineers.

Steve Kroft: With the engineers?

Sergio Marchionne: Yeah. I can build a car with all the guys on this floor. That's all I care about.

Steve Kroft: How do they feel about you having--

Sergio Marchionne: They love it.

Steve Kroft: --on the floor?

Sergio Marchionne: The official view is that they love it.

Whether they like it or not, everyone on the floor seems to have gotten used to his presence.

[Steve Kroft: Sorry to barge in on you like this, but does he walk in all the time?]

42-year-old Ralph Gilles is in charge of product design at Chrysler and one of the rare holdovers from the old regime. The Chrysler 300 and the Dodge Dart are his babies. He says the company has always had good talent, but a lack of resources and execution produced cheap interiors and poor fit and finish.

Ralph Gilles: Everyone knew what was wrong with the cars. You asked any employee in the company, they could list 10 things that they would do better. And when you're given the chance to do those 10 things better, you end up with a product that exceeds the sum of its parts.

The company has also made strides in reshaping its image. Chrysler's dramatic "Imported from Detroit Campaign" with Eminem was hugely successful. And this year's two-minute, $8 million Super Bowl ad with Clint Eastwood, extolling the resiliency of America and its automobile industry caused a major stir and briefly became part of the presidential campaign.

Steve Kroft: Republicans said that this was a campaign commercial for President Obama. A payback. Did you anticipate that criticism?

Sergio Marchionne: Just to rectify the record here, I paid back the loans and 19.7 percent interest. I don't think that I committed to do a commercial on top of that. I thought that the Republicans' reactions to this was unnecessary and out of place.

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[vchain60]

Well, it's wonderful for Chrysler that Mr. Marchionne saved this company. But, for my mother that purchased a LHS Chrysler it's a nightmare! On a fixed income and 4 mechanics the car still isn't repaired. No one can find the problem. Not even my mechanic and he is one of the best around. The Chrysler dealership in town aren't very helpful. They did offer to help her with a new car,one that she can't afford. She is in distress and carless!!!!! But hey, Chrysler is doing great!! Good for you Mr. Marchionne, you get to drive an awesome car, but the elderly are stuck with one of your worst vehicles.

[Jinsoon777]

Here is the evidence that many of you requested. Go to FactCheck.org and look up general motors debt and you will see what happened. http://factcheck.org/2010/05/general-motors-debt/index.html

[Ponemeister]

The math doesn't add up.

How do you make 183 million in 2011, yet pay off a loan of 6 Billion in two years??

Steve Kroft touted that number as the best year in Chrysler's history since 2009, when they were in disarray.

So where did the money come from? Certainly not from sales of cars!

You'll notice that Steve Kroft says that:

"Chrysler turned a $183 million profit and would have made a lot more if it hadn't decided to repay its $6 billion federal bailout, six years ahead of schedule".

Why not say exactly how much more they would have made? Because it wouldn't have added up and he couldn't outright lie. This way, he buries the fuzzy math under the term "alot more".

Steve Kroft: Be ashamed of yourself as a journalist!

[Jinsoon777]

Chrysler paid off the $6b by using taxpayer money called TARP.

[nelsonew60]

If there is any question about the Clint Eastwood commercial at the Superbowl being a campaign commercial for Obama there is no doubt aboutthis 60 Minute piece. Why doesn't 60 Minutes do a piece on Chevrolet? Tell us about the billions in bailouts that will not be repaid to the American taxpayers. Ask the investors who were just written off how it worked for them. Ask the former employees of Delphi how it worked out for them. This wasn't an auto industry bailout. This was a union workers benefit bailout. Mitt Romney didn't want these industries to fail, he wanted them to be able to go forward in a viable environment. Have the airlines who took out bankruptcy failed? No, there doing better. Get a clue.

[nelsonew60]

nolalou2 I was thinking about a couple of airlines a little more recently - Delta '05 & United '02. Doesn't appear to me that passagers have been leaving them "droves". They seem to be doing quite well. By the way, how are the unions helping those states in the rust belt. What's the reason that new car and airplane manufacturing are fleeing those states and locating in right-to-work states.

[inletbeach]

Fiat's nickname is "FIx it again, Tony." They built junk cars for many years. Not many Americans would park a Fiat in their driveway. The Fiat 500 is cute, but no match for the BMW Mini Cooper. Let's see what Alfa Romeo comes up with. That is a brand with some status in the US. The Dodge Dart is a huge gamble.
Its namesake was a tin can with a motor in it. Chrysler products were built to last five years and then fall apart. I had a Town and Country minivan. After five years, the air conditioner failed, the power windows failed, the body fell apart and the cost of maintenance went through the roof. Never again.

[venusvegasvada]

Sergio Marchionne is an old school car guy and has something very few of our modern "captains" of industry still have.

Heart.

He actually cares about the company and the people that are working there. He wants the whole thing to succeed. So much, in fact, he's willing to put in those horrendous hours to make it happen. That's his experience and we are all very fortunate that he came along. I for one am very happy to see Chrysler coming back as I've always loved their products. They have had great engineering and in my opinion, bad dealerships. But that's another story.

I contrast that with Mitt Romney and his seemingly "easy way out" attitude of not wanting to help them and bail them out. He simply wanted to head for the exit door and liquidation. Mitt's experience told him there is a huge profit to be made with Chrysler all right, it just wasn't by the employees or Chrysler, it was going to be buy the people that got to carve up what was left of Chrysler and pull a Bain on it.

That's scary. If Romney had been President when this went down Chrysler would be toast, Bain like companies would have gutted Chrysler's assets and made a ton on it and the only blue collar jobs that would have been saved would have been the temp guys loading up all the old equipment and shipping it to China. THAT'S Romney's leadership decision? Based on his "business experience"? "Let them fold?"

Mitt Romney isn't a Sergio Marchionne. He's not a fix that company and turn it around guy. That's the hard road. Sergio said it himself, of all the other guys, nobody wanted to touch it with a 10 foot pole. So much for the quality of our current "Captains" of industry. Thank you Sergio and Chrysler employees for turning it around. It just goes to show what happens when you remove all the morons and deadweight parasites (like Wall Street Greed mongers and the Mitt Romney off-shorers) from the picture. Americans can still build great things. They just have to be given the chance.

[Ponemeister]

Go ahead and talk about Obama as a CEO. Oops, never mind.

[Jinsoon777]

60 Minute, you lied to the American taxpayer and you are a disgrace. Chrysler used taxpayer money (TARP) to pay off 6 billion in taxpayer stimulus. Both 60 minutes and Chrysler told the American people that they are square with the American people. Chrysler still owes the taxpayer $25 billion and the news I hear is they will need more stimulus. How dare you lie to us.

[bbglow]

... source please.

[thechooch1]

rOCKYI941 TARP was a program passed by the last failed administration and had nothing to do with your President.

[nonpolitico]

Jinsoon777: Glad someone has their eye on the fiscal ball!!
Since approx 2000 the government, (Doesn`t matter WHO the President was), has seen virtue in laying off Americans to please the Chinese,and to placate the Unions whose heads get richer as their ex "comrades" draw welfare and food stamps!
We need to lower taxes, burn all the red tape and empty out all those plush `crat offices of those well fed Federal post holder paper pushers who write all the BS rules to regulate what Americans have been doing without effort for 100 years.
Also we need the "folks on the Hill" to take a big gulp of the medicine they have been voting for for their constituents for years.
Oh! and while I`m at it, how about NOT ALLOWING the White House to be filled with a non businessman `Crat who has never worked apart from passing out papercrap from one of the Govt Departments responsible for the mess the USA is in?
Keep Government OUT of business, remove Subsidies from all the places it has found a home. Hell! You could rehouse all the homeless in the converted-to-homes office space you release!!!!

[Jinsoon777]

Go to factcheck.org and look up general motors debt. http://factcheck.org/2010/05/general-motors-debt/index.html

[bbglow]

Reality Check: In order to win an election political parties in America must provide for inclusion. To ignore this fact is a move towards irrelevance. The destruction of middle America does not favor the greedy.

[bbglow]

Imported from America ... :).

[bbglow]

Motown rules ...!

[tomlarryjr]

I'm very grateful to Sergio Marchionne for his imagination and management skills. He saved over 50,000 American Jobs. On another level, this story makes me so very mad. I am one of the 10 million people that lost there home. I asked the bank for a 1% decrease in an interest rate that 3% above market and I could not get it. I hire a loan modification company and a lawyer and filled out every government program form that came down the pike. Almost two years of begging. The problem start when a bank sold the home next to me for 35 cents on the dollar. It was the lowest sale in our complex by more than 30% and it locked all of us out of refinancing our homes. Overnight my credit card went from 6% to 29%. If Chrysler had to pay 29%, Sergio would have walked away as many of us home owners did. Years later I am nowhere near recovering. A restructure at the company I worked for left me looking for work. I was an accountant but an account with bad credit is a very hard sell even in a good economy. Thus at 50, I had to rethink my direction. I now have a Masters degree and I am studying to complete the PMP Exam. I have cashed in some of my retirement. Even with the Masters and the License, I simply cannot compete with a Canadian who has better education, better health care, and better retirement programs than I have. They can simply direct their energy and creative talent more effectively than I.