UAW VP: Chrysler Plan Invigorating

Auburn Hills (WWJ)  -- The United Auto Workers union is reacting very positively to the turnaround plans laid out by Chrysler. 

Invigorating is how UAW Vice President General Holiefield described the overall plan, which has the Auburn Hills-based automaker spending $23 billion to overhaul or replace all its Chrysler, Dodge, Jeep and Ram models by 2014. 

Holiefield says the plan shows Chrysler has a bright future.  In addition, Holiefield says he’s had many discussions with new Chrysler CEO Sergio Marchionne.

"We’re naturally going to rally behind him, and help bring Chrysler back to being a standard of being a premier auto company and hopefully it will help stimulate the employment and opportunities for the workers across America," Holiefield said

Holiefield describes discussions about the future of the Sterling Heights Assembly Plant, set to close next year, as a work in progress.  Chrysler says it doesn’t know about the plants future.

Holiefield's comments came after a daylong presentation of the automaker's five-year plan to save the ailing 84-year-old Chrysler.  Much of the overhaul includes cost savings from combining purchasing and engineering with Fiat, and using Fiat's smaller, more fuel-efficient designs to replace aging Chrysler vehicles.

Marchionne's Fiat, which now owns 20 percent of Chrysler with an opportunity for more, was put in charge of rescuing the automaker by the U.S. government.  Chrysler emerged from bankruptcy protection in June.

Listen to more from WWJ's Jeff Gilbert.  
  
Some industry analysts say the automaker's goal of selling 2.8 million vehicles globally in 2014 is overly ambitious because of increasing competition. The company must also fight public perception of noisy, poor-performing vehicles, especially in mid-size sedans, the biggest segment of the U.S. car market.
  
Sedans like the Dodge Avenger and Chrysler Sebring, along with many other models, have flopped. Chrysler said it will update these cars to make them more comfortable and quieter, then replace them in 2012 with Fiat designs.
  
Marchionne says the U.S. market will expand over the next five years, pushing up the company's sales. Chrysler also will have to regain some market share, he said.
  
Rebecca Lindland, an auto industry analyst for the consulting firm IHS Global Insight, said the sales figures may be rosy assumptions.
  
"Everything needs to go perfectly'' for the plan to work, she said. Her company's expectations for Chrysler's U.S. market share is nowhere near the automaker's forecast of 13 percent by 2014, up from the current 9 percent.
  
The plan depends on the U.S. market recovering from this year's sales of 10.5 million cars and light trucks to 14.5 million in 2014.

The U.S. government has so far has provided roughly $15 billion in aid. Chrysler still has around $9 billion of that available, and Marchionne said it will not return for more money.

"If we screw this up, it's over,'' he said.