The European bailout of Greece may have prevented catastrophic results but Europe needs to take further action to resolve the region's debt crisis, Chrysler Chief Executive Sergio Marchionne said on Thursday.
Marchionne said Europe's response to the sovereign debt crisis has lacked a coordinated approach from the beginning, and said the signals so far were mixed and did not give much reason for optimism.
In addition to a 110 billion euro bailout of Greece, European nations are creating a financial safety net for indebted countries that along with support from the International Monetary Fund could total 750 billion euros.
Failure to throw a lifeline to Athens could have set off a catastrophic chain of events, Marchionne said at an event in Mackinac Island, Michigan, sponsored by the Detroit Regional Chamber of Commerce. And yet the process of agreeing a bailout package was subject to foot dragging, uncertainty and nationalism.
He also blasted the European governments for failing to intervene to restructure the region's auto industry, unlike the Obama administration which has provided more than $65 billion to finance restructurings of General Motors Co and Chrysler. That intervention forced a major structural reorganization and facilitated a courageous shift, he said.
Marchionne, who heads both Chrysler and its Italian partner Fiat SpA , said the Greek rescue and the 750 billion euro financial stability package represented a major step but Europe needed to go further in order to stabilize the economy.
But if these efforts are to achieve more than just buying time and deferring the problems, they need to go beyond merely providing aid, he said. Only a more comprehensive approach based on the political will of Europe to protect not just its currency but also its future will enable a qualitative leap forward in the nature of the Union.
Speaking a year after Chrysler emerged from a U.S. government-controlled bankruptcy, Marchionne said his five-year rescue strategy for Chrysler was on track and affirmed that the No.3. U.S. automaker would break even on an operating level this year and pay back U.S. and Canadian loans by 2014.
He said Chrysler's $143 million operating profit in the first quarter is concrete evidence that its 2010 financial targets are achievable.
Chrysler is counting on a new generation of Fiat-based small cars and fuel-efficient vehicles, starting with the 500 small car in December, to revitalize its lineup heavily reliant on big trucks and SUVs.
(Reporting by Soyoung Kim; Editing by Bernard Orr)