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Case: Sergio Marchionne’s Challenge at Chrysler

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Case: Sergio Marchionne’s Challenge at Chrysler
Case: Sergio Marchionne’s Challenge at Chrysler

1. Background Information
Fiat CEO Sergio Marchionne took over Chrysler operations in June 2009. Former CEO Robert Nardelli used buyouts and layoffs to cut departments which halted the company to only make Jeep Grand Cherokees and Chrysler 300 Sedan’s.

1.1 People / Key Players
Sergio Marchionne – CEO of Fiat
Robert Nardelli – Former CEO of Chrysler
Cerberus – Capital Management Firm

1.2 Chronology of Key Relevant Events
Fiat CEO Sergio Marchionne took over Chrysler operations in June 2009. Fiat acquired Chrysler after two years of private-equity ownership under Cerberus Capital Management. Former Chrysler CEO Robert Nardelli used buyouts and layoffs to cut departments. This caused capital spending to be slashed and the only new cars coming off the lines were Jeep Grand Cherokee and Chrysler 300 Sedan’s. Cerberus forgave $2 billion in loans. Chrysler will replace 33% of it s sales volume before 2013, less than half the industry’s average.

1.3 Key Facts
Chrysler is operated by Fiat. Chrysler has only two models coming into the current market. Chrysler is only producing one-third the rate of Ford, Honda and the Korean automakers and less than half the industry.

1.4 Concepts
The car industry is struggling. Fiat CEO took over a mess that will take years to overcome. Chrysler must push forward to get revenue rolling into the company.

1.5 Assumptions
If former CEO Robert Nardelli would have not cut spending so drastically, the company would have goon bankrupt before the government could step in and /or file Chapter 11. CEO Sergio Marchionne must find ways to bring in revenue.

1.6 Point of View
This case is shown from the view point of the automobile industry.

2. Problem Statement
CEO Sergio Marchionne took over operations in June 2009 only to find a mess. The company is currently only producing 33% of its sales volume; less than half the industry’s average. Within the 33% there are
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