Fiat CEO Insists Rapid Chrysler Turnaround is Do-able

(MoneyWatch)  Fiat (FIATY.PK) and Chrysler CEO Sergio Marchionne said in a speech yesterday his plan to fix Chrysler doesn't require "miracles."

Baloney. Miracles are exactly what Chrysler needs. Consider that in the last four years, Chrysler has had, "a 60 percent contraction in sales volume, three different owners, four CEOs, and five heads of marketing." That's how The New York Times today quoted the head of Chrysler's former ad agency, BBDO, in an article about Chrysler's marketing plans.

Years from now, rest assured that if Marchionne is successful, he'll take credit for a miracle - deservedly so -- even though he says today that fixing Chrysler doesn't require one.

In his speech, Marchionne defended his plan to double Chrysler sales, introduce 21 new models, and cut debt in half, all by 2014.

"We are not planning miracles. We are simply committing to the execution of a few strong and precise choices that will trigger rapid change," he said.

There was a lot to like in Marchionne's speech, especially where he noted that overcapacity - the global auto industry's capacity to build far more vehicles than it can sell - is a root cause behind a lot of the industry's profitability problems, and those problems are not going away until the industry closes a lot more factories.

However, I'm still deeply skeptical that anybody can turn Chrysler around at all, let alone as fast as Marchionne says he's going to do it.

Marchionne had a simple message for us skeptics, in his speech to the Council for the United States and Italy in Washington: Trust me, I've done this before.

Marchionne previously left it largely up to others to deliver this message, but yesterday he said himself that he turned around Fiat when no one thought he could, and he insists he can turn around Chrysler, too.

"I actually like the idea that we are the underdogs, and that we will have a chance to prove them wrong. But I also understand the naysayers. I have been here before," Marchionne said.

Photo: Chrysler