Zetsche not sold on selling Chrysler

March 7, 2007 | BY MARK PHELAN | FREE PRESS COLUMNIST | GENEVA, Switzerland -- Four thousand miles from Auburn Hills, DaimlerChrysler CEO Dieter Zetsche still sounded like a Chrysler guy.

Speaking in Europe, where sentiment runs strong to separate Chrysler from Daimler, he said flatly that the companies could stay togetherThat doesn't mean the German-American automaker might not sell part or all of the Chrysler Group, which it is pitching to potential buyers this week. But what Zetsche said in an interview Tuesday at the auto show in Geneva -- and the way he said it -- suggests that throwing Chrysler overboard is not the first item on his to-do list.

If the offers get sweet enough or Chrysler's situation grows worse, the division could go, but Zetsche repeatedly said that maintaining the status quo -- retaining Chrysler -- remains an option. He expressed interest in the Chrysler Group's recovery plan and added that the UAW's refusal to grant health care concessions last year was a factor in DCX's decision to put Chrysler on the sale block.

The lanky German was less ambiguous the first time he pledged allegiance to Chrysler in December 2000, days after he took over the company.

He had just replaced longtime Chrysler executive Jim Holden, arriving secretly on a plane from Stuttgart, Germany, with his lieutenant Wolfgang Bernhard and communications executive Ken Levy.

Rumors were rampant, and Chrysler employees and most of metro Detroit were nervous.

A reporter asked Zetsche how he would reassure Chrysler's workers.

"I am a Chrysler guy," he replied, refusing to acknowledge any conflict between himself and the troubled business he had just taken over.

Talk is cheap, but Zetsche's actions over the next few months reinforced the impression, as he learned the intricacies of the U.S. pickup market and ramrodded approval of the elegant Chrysler Crossfire coupe through DCX's hierarchy despite resistance from the company's territorial Mercedes-Benz brand.

Tuesday, he spoke of Chrysler as "we" and "our," a distinct difference from DCX executives who refer to it as a third party: "they" and "them."

A telling moment came when he responded to a question about Chrysler's February sales.

"One of our competitors in town was higher than us and the other was lower" in fleet sales for the month, he said.

Seeing competition as who wins in "our town" -- Detroit -- among General Motors, Ford and Chrysler is as sure a sign of hometown perspective as having a taste for Vernors pop.

"Dieter has a real fondness for Chrysler and Detroit," said Michelle Krebs, editor of Edmunds' www.autoobserver.com.

Zetsche also showed that he's learned another old-time Detroit perspective: Don't hesitate to blame the UAW.

DCX evaluated all its business units last year, he said. It considered selling others, but the idea never progressed far enough to go public with any but Chrysler.

"Two things happened," to put Chrysler on the hot seat, he said. First, sales fell dramatically in the spring, and the company kept building vehicles its dealers didn't want, setting the table for Chrysler's ugly $1.5-billion third-quarter loss.

Second, "the stance the union took," when the UAW refused to give Chrysler the same money-saving health-care concessions it had granted Ford and GM, both of which were teetering on the edge of financial ruin. The union thought Chrysler was too profitable to merit a matching break.

"These developments were, of course, part of our considerations," Zetsche said.

The union declined to comment.

Zetsche repeatedly said he expects Chrysler to meet its goal of having an operating profit margin of "better than 2.5%" in 2009.

"I know very well the tremendous skills of Chrysler's employees," said Zetsche, who ran Chrysler for more than five years. "I am very confident."

Zetsche effectively shot down the theory that DCX might keep the attractive Jeep brand and shed the rest of Chrysler. "Chrysler is a very integrated unit," he said.

He also conceded that uncertainty over Chrysler's fate probably damaged the company's sales last month.

"It's quite natural" for buyers to shy away if the company's future is in doubt, he said. "It is the task of management to re-instill confidence in our employees and buyers."

He refused to say when a decision on whether to sell the business would be made.

Perhaps that's an auctioneer's trick to drive up the price, and the final decision would not be his alone. But Dr. Z sounded less like a motivated seller than like Doctor Detroit.