LaSorda: Chrysler 'here to stay'

The CEO tries to comfort tense dealers with Chrysler's commitment to invest billions on new products, powertrain.

Josee Valcourt / The Detroit News

Chrysler Group CEO Tom LaSorda told U.S. and Canadian dealers riled by reports of a possible sale of the automaker that Chrysler will return to profitability and plans major investments to strengthen its product line.

In a 10-minute conference call Thursday, LaSorda acknowledged the concerns rising from DaimlerChrysler AG's announcement last week that it was considering strategic options and wouldn't rule out a sale of its struggling Auburn Hills unit.

"We have a strong future and we are determined to bring the company to profitability as soon as possible," LaSorda said. "The Dodge, Jeep and Chrysler brands are here to stay."

LaSorda has been working to soothe the anxiety of dealers and workers amid reports that General Motors Corp. or another bidder could buy Chrysler.

LaSorda's message to dealers came one day after the executive sent an e-mail addressing similar concerns to Chrysler's roughly 80,000 employees.

In that note, first reported Thursday by The Detroit News, he said information about buyouts and early retirement packages "will be communicated in the next few days" but more information about Chrysler's fate could be months away. Salaried workers are expected to learn more about buyout packages as early as today.

LaSorda reiterated to dealers the company's commitment to spend between $5.7 billion and $6 billion annually on future products, reminded them of the company's planned $3 billion powertrain investment to improve fuel efficiency, and touted 20 new and 13 refreshed products slated for the next three years.

"Do these sound like the actions of a company uncertain about its future? Obviously not," LaSorda said.

One dealer, who asked not to be identified, said LaSorda "needed to do (the conference call) but I was hoping he would say something more like 'the company's not for sale.' "

LaSorda has a huge job trying to maintain employee and dealer morale as the company executes a restructuring plan that calls for slashing 13,000 jobs and steep production. A shift will be eliminated at several factories, including the Newark, Del., plant where the Dodge Durango and Chrysler Aspen SUVs are built. The Newark plant will be closed in 2009. Chrysler, which lost $1.2 billion last year, expects the plan to restore profits by 2008.

"My job is to deliver this company back to profitability and that is 100 percent of my focus," LaSorda said. "And that's where the focus will stay."

LaSorda, whose father, grandfather and great-grandfather all worked for Chrysler, cited his own deep roots with the automaker and the company's 80-year history as representative of a legacy that still matters.

"History and heritage both in dealerships and a company mean a lot, and it's something we need to keep for the future," he told dealers.

While acknowledging that many retailers have concerns about the future, LaSorda said the automaker would continue to invest in its operations and urged them to do the same.

"The Chrysler Group will return to profitability," LaSorda said. "We need you. You are our customers. You're the only avenue that brings in revenue."

Ken Zangara, a Dodge dealer in Albuquerque, N.M., said the CEO's message was "uplifting" and "reassuring."

Since last week's announcement, some dealers -- particularly those near Chrysler's Auburn Hills headquarters or its factories -- have suffered a drop in showroom traffic.

Steven Landry, vice president of sales and field operations, said during the conference call that the automaker is "actually getting some momentum back after last week."

Chrysler, Dodge and Jeep dealers are trying to rebound from a difficult 2006, when Chrysler failed to cut production amid slumping demand and angered dealers by pushing them to take vehicles they could not sell.

For February, Edmunds.com projects Chrysler will sell 173,000 units, down 9.2 percent compared to the same month in 2006 but up 10.6 percent from January this year.

Chrysler's incentives fell in January compared to the same month last year, although the automaker still leads the pack with an average discount of $3,855 versus the industry's $2,286, reports Edmunds.com, a research Web site for car buyers.

"It's not a phenomenal start but it's a positive start," said Jesse Toprak, executive director of industry analysis for Edmunds.com.

Still, Chrysler cars and trucks sat on dealers' lots an average 108 days between Nov. 1 and Feb. 11, compared to an industry average of 66 days, according to data compiled by J.D. Power and Associates' Power Information Network, or PIN.

"They're selling vehicles that have come in last summer or fall," said Tom Libby, PIN's senior director of industry analysis. "So basically they're now working through the units that have been accumulated over this whole six or eight month period."