Chrysler CEO Says The U.S. Recovery is Still on Track
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TRAVERSE CITY–(WWJ) It’s not the recovery that’s in trouble, according to Chrysler CEO Sergio Marchionne, it’s the expectations.
“We’re gonna see a gradual recovery,” Marchionne told reporters at the Management Briefing Seminars in Traverse City. “I think the base is incredibly strong and solid. But, the actual reduction in employment numbers is going to take longer.”
Chrysler has not changed its predictions, and is not expecting huge economic gains to come quickly, said Marchionne. He said an economy that’s “moving out of the ditch” is not going to recover overnight. And until companies are sure there’s not going to be another downturn, they will be conservative in hiring.
“The actual reduction in unemployment numbers is going to take a long longer,” he said. “People are still very reluctant to make long term commitments to hiring and to capital, because of the uncertainty.”
The “boom and bust” cycle of the auto industry is over, Marchionne said. He doesn’t expect car sales to return to pre-recession levels—16-17 million units a year—for a long time. Even in 2015, the Chrysler CEO is assuming annual sales of less than 15 million.
Still, Marchionne says Chrysler has come a long way in two years, when there was a “competition to write the most creative obituary” for the company.
July’s sales results, which showed a 20 per cent increase from last year, are a “further confirmation of the progress we’ve made so far,” he said. Marchionne said 2012 will be better than 2011.
Just last week, automakers were in Washington DC signing off on a 54.5 mile per gallon fuel economy standard by 2025. Marchionne said Chrysler will make that target by using a variety of technologies, but mostly by improving traditional internal combustion engines.
Electric vehicles have a place, he said, but have been “overhyped” and cost too much compared to the benefits they provide.
Marchionne says automakers have “cried wolf” too many times. Now they have to concentrate on getting to the goal. He said companies that say “I cant get there” 14 years before the target “ought not to be in business.”
“I think we have the capability to get this done,” he said. “I think it’s going to be an incredible stimulus for the auto industry.”