Transcript Sergio Marchionne with Paul W. Smith – WJR-AM February 3, 2014

[PWS] …for the new Fiat Chrysler Automobiles. Lots going on, a whole lot going on; starting a new month after wrapping up January, finishing up a big year for Chrysler Group reporting full year 2013 net income of 2.8 billion including a 962-million-dollar non-cash tax benefit, profit was 3.2 billion up 9 percent. So lots of good news going on for Chrysler, and now the pressure that Sergio Marchionne spoke with us about, has spoken with us about a number of times but at the auto show again those commercials coming on and trying to keep up the level of excellence that they have established in that Super Bowl. We have in fact the Chairman and CEO of Chrysler Group LLC, CEO of Fiat SPA. I don’t know how many plane flights you’ll have between now and next week because you’re living on a plane as always but you’re back here today and celebrating some success in the Super Bowl I would hope.
Yeah, I think it went relatively well, but as you and I talked about before, the field is getting really crowded. Yesterday there was some really good stuff that was shown on the Super Bowl and I think we need to be cognizant of the fact that the competition is getting tougher. And I think for us it was important to close this chapter that we started in 2011 with Eminem and the Imported from Detroit story, and I think yesterday was about – we closed that chapter. It was important. But it’s an interesting reflection of where the auto industry out of Detroit has been in the last four years. The Eminem message back in 2011 was reflective of a process of reconstruction that had just started. I think yesterday was a celebration of the fact that that reconstruction is complete, and I think it’s a recognition of the work that has been done by the men and women in all the car companies that work out of Detroit, it’s not just us. But I think we have gone miles. I think we have reacquired a phenomenal amount of credibility on the world stage. And it was clearly evident when you saw at the Detroit auto show this year the reaction of the global press to what was going on here. And so I’m incredibly proud of what we’ve been able to accomplish but we’ve got to turn the page now. I think that the challenge for Chrysler, for Fiat, for the new entity is to really embrace, in a very open way, this global challenge that we’re all facing. There’s been noise about the fact that Chrysler is not really Detroit based and it’s now sort of controlled by this foreign entity. The reality is that both of these companies carry with them a phenomenal amount of history. Fiat celebrates 115 years’ worth of history this year. Chrysler is 90 years old. When you bring entities that have that history, that phenomenal baggage of experiences and know-how together, you need to be very, very careful that you don’t dent the historical roots of the houses; and you don’t end up damaging probably the most precious thing, which is the people and the brands that they represent. And so the ability for us to keep Chrysler as American as it’s always been in a global context is a real challenge. And it’s a challenge that we take seriously because the worst thing that we could do is dilute that American heritage. We can’t do it. You know, yesterday we showed another spot, which is – was for a brand that is not Chrysler. It’s the Maserati brand. That Maserati brand is as Italian as pizza, and it’s

impossible to take out the Italian-ness of that brand. We don’t want to. And the ability to preserve that while we preserve the American nature of Chrysler on the Jeep and the Dodge brands and the Ram brands, these are big issues. They truly are reflective of the complex challenge that we’re all facing in navigating through an incredibly complex world, but I think we’ve got the management team to get it done.
Well you do. And look what you did first of all at Maserati; Peter Grady, Saad Chehab, you made some brilliant moves there, and we’re reminded even though we don’t think of Maserati on a regular basis it’s 100 – they’re embarking on 100th year of their work, and you looked at two places to really increase in sales: Jeep and Maserati, around the world. And you can do that.
We can, but as we travel the world we’ve got to remember who we are. And the ability to maintain Jeep as an American brand, and the ability to maintain Maserati as Italian are the real challenges here because you can’t dilute the nature of the brands. They have – they bring with them a phenomenal amount of history and know-how and experiences and even sort of peculiar natures of the vehicles themselves. They are what they are. I mean the Maserati commercial yesterday showed the phenomenal racing capabilities of a brand like Maserati which, as you said, celebrates 100 years this year. But you’ve got to preserve them; you’ve got to look after them, and you’ve got to make sure that all the cars that we produce are true to that heritage…
Well, you know, when people were saying, “What’s a Maserati commercial doing in the midst of all this?” Well, there was also a Jaguar commercial and you can buy that Maserati, that new – that Ghibli for less than a Jaguar and I think that would surprise a lot of people. Hey Sergio, can you hold for just a moment and say with us?
Sure, yeah.
Let me do our little business here at 6:17 our WJR Right Now Traffic every 10 minutes on the 5s and Miss Dana Clark.
(Traffic/weather reports)
CEO of the company is here of the new Fiat Chrysler Automobiles, Sergio Marchionne. We’ve talked a little bit about Maserati and people a bit surprised that for 60, 70 thousand dollars which yes is a lot of money but so are a lot of cars these days and with this one you’re getting frankly a Ferrari engine.
Yep.
Isn’t that correct?
Yes it is. But the other thing that we were talking about is the breadth of coverage of brands that this FCA entity has. I mean it represents Ferrari on one end, represents Jeep here; and so I go back to what I said earlier: we’ve got to be very careful that we sort of optimize the combination of these brands reflecting their heritage. The Ferrari know-how and engine as

you well know – on engines is phenomenal. It goes back to their racing days in Formula One. The ability to use that reservoir of knowledge to really improve the positioning, the quality of the content of the Maserati brand is crucial. We’ve got to be careful that we don’t do this too often and that we apply that knowledge to a select number of brands. Maserati is going to be the – has been and will continue to be the recipient of that knowledge. In all likelihood when Alfa Romeo comes back to the U.S. next year in some parts of its portfolio it will reflect the association with Ferrari. So that’s really the plan going forward. It will be interesting to see how the market reacts to it. But…
Absolutely, and as you’ve pointed out a number of times, Sergio Marchionne, that Jeep Wrangler, Jeep Cherokee, should always remain manufactured in the U.S. The folks in Toledo obviously happy to hear that; that’s the commitment, that’s the, as you say, not losing your way along with the way with these different, very different brands. How did January sales go?
It was a phenomenal month for us. We’re still waiting for competitive data to come out but we’ve had a very good month in January. The numbers I think are going to come out in the next few minutes, but better than we originally thought, and the market continues to hold. We’ve done particularly well across all the brands. I think the introduction of the Cherokee has helped a lot because, as you well know, we were out of that market in January of 2013. But we’re now back; Toledo is going full steam ahead. By the way, just to make sure that we’re clear, what I did say is that we would never ever move the bookends of the Jeep brand outside the U.S., and that includes our plant here in Jefferson, which is going incredibly well. So the Grand Cherokee and the Wrangler will continue to be manufactured exclusively in the United States. I think they represent the best of what the Jeep brand and American manufacturing can offer. So we can never dilute that commitment in any way shape or form.
With the America’s import of the Bob Dillon ad yesterday, it sounds to me, Sergio, you may be ready to move away from trying to have that kind of incredible pressure to knock our socks off every Super Bowl with some kind of major and expensive, spectacular commercial.
Yeah, I’m not sure we’re going to move away from trying to impress you. I think that’s our obligation. But I think the theme of the Eminem and then the rest of the commercials that we’ve played since ’11, have to come to a natural conclusion. I think we’ve asserted in unmistakable terms that the American auto industry is back, and I think we’ve taken sort of the authority away from the rest to make that statement. But I think it’s fair to say that we have that cycle completed and behind us; that we can now move in a different world, in a different set of opportunities, that this renewed strength that Detroit has found; we need to find a way to exploit that internationally to bring out the best of what we can do across the world, and I think Chrysler is doing all they can through this new FCA organization to try and get that done.
You’ve – the only other note that I remember since last we spoke, Sergio Marchionne, was the announcement that your company was going to be presenting the final tour of Motley Crue; the Dodge brand to present.

Yes. Look, the Dodge brand is a work in process. I think we’re lucky we’ve had Reid Bigland, who’s now running Ram, who was running Dodge before. We’ve now given it to Tim Kuniskis who’s shown a phenomenal amount of dexterity in trying to really position Dodge for the future. I think we have great expectations for how that brand will develop going forward. It is a complex brand because of its history. But as you know, the commercials that we’ve run recently with the Durango, which has sort of become a pretty – they’ve gathered an incredible following — which is still unclear to me as to why that’s happened, but I’m always learning as you well know. But there’s a lot more to come out of Dodge and I think we need to allow Tim and his guys to really sharpen their tools on this — great upside.
Anything else we need to know before we let you go?
No. I’m on the way to raise some money out of Boston and New York so – but it’s been great to talk to you again.
Always nice –
We’ll talk to you soon.
We’ll see you in Geneva probably next.
That’s right. You be safe.
[End of interview]