Chrysler is willing to let market share slide in the short term to further its longer restructuring goals, the company's chief executive said in a presentation of his business plan to members of Congress on Tuesday.
Sergio Marchionne, who heads the Fiat-led Chrysler venture, also indicated at a meeting with lawmakers that Chrysler's Sterling Heights, Michigan, assembly plant would remain open into 2011, said Representative Candice Miller.
Chrysler had said the plant, where the Sebring and Dodge Avenger roll off the line, would close as part of its North American restructuring.
Miller, whose district includes Sterling Heights, said Marchionne indicated the Sebring would be a big part of Chrysler's business plan for the revamped mid-sized sedan segment even though it may wind up being produced somewhere other than Sterling Heights in the long run.
As part of the overhaul, Marchionne plans to streamline Chrysler's vehicle lineup and focus the Dodge brand on cars and minivans. Producing more fuel efficient engines is a cornerstone of the turnaround plan. Some vehicles would be re-engineered to work on a Fiat platform.
Near-term production would continue at Sterling Heights after which Chrysler would evaluate where to build future products. Marchionne indicated the Sebring still would be built in the United States and Miller said Sterling Heights was prepared to compete for the permanent work.
Marchionne did not make any specific requests of Congress during a presentation of his business plan, members who attended the meeting said.
His preference is to come back to talk to us and bring us a check, Miller said.
The government extended $14 billion in aid to Chrysler before and after its bankruptcy. About $5 billion has been written off while another $7 billion in loans are due to be repaid over the next several years.
Accounting for the rest of its investment, the U.S. Treasury holds a nearly 10 percent equity stake that will be sold at some point.
Chrysler has said it hopes to repay its loans by 2014.
Another source with knowledge of the meeting but who did not speak for attribution said Marchionne is very focused and is willing to let market share slide in the short-term in order to improve brand integrity and make the company profitable.
Chrysler U.S. sales were off 25 percent in November compared with the year-ago period. By comparison, Ford Motor Co
We are not planning miracles at Chrysler, Marchionne told policymakers in a speech on Monday in Washington.
But Marchionne's financial objectives for the company are ambitious. Chrysler hopes to break even on an operating profit basis by 2010 and break even on a net profit basis by 2011, according to its turnaround plan unveiled in November.
With Chrysler smaller than GM and in worse financial shape ahead of bankruptcy, the Obama administration debated fiercely about whether to save Chrysler, according to Steven Rattner, the former head of the government task force that oversaw the restructuring.
Representative Gary Peters, who represents the district where Chrysler headquarters is located in Michigan, said that Marchionne laid out a compelling strategy in the meeting that will allow Chrysler to quickly return to profitability and gain market share.
(Editing by Steve Orlofsky; Editing by Phil Berlowitz)