CHRYSLER/ Marchionne: Is he really a savior as Time magazine claims?

"The real challenge facing Sergio Marchionne in the U.S.? Overcoming the persistent negative public opinion on the reliability of Fiat cars, which for Americans are synonymous with vehicles that break down all the time". U.S. economist Dorman Wood, one of the most prominent U.S. financial experts and chairman of the agency Dorman Wood Associates, made this statement. Ilsussidiario.net interviewed him about Time magazine’s decision to devote their cover to the CEO of the Turin-based company, calling him "the savior of the automobile industry." For Wood, "although Marchionne obviously has not saved the American automobile industry as a whole, it is undeniable that through him thousands of Chrysler employees have kept their jobs. And the same goes for many other businesses that are part of the industry in Detroit".

Do you think that Time magazine is right in celebrating Chrysler CEO, Sergio Marchionne, as the man who saved the auto industry?
Your question does not specify which auto industry - U.S., Global or Chrysler Corp. alone. If you refer to Chrysler Corp. alone, Time magazine may be correct in its choice. However, if you are referring to the U.S. or Global auto industry, then I disagree with Time's choice.

What would have happened to the US auto industry, if Fiat had not participated in Chrysler’s bailout?
If Fiat had not participated in the bailout of Chrysler, the company would probably have languished in bankruptcy for several years. As you may be aware, the U.S. bankruptcy process can be quite protracted unless a reorganization plan can quickly be approved by creditors and the court. Even if such a plan was approved, it would not have been a guarantee of the corporation's ongoing success. Your research may on Chrysler's history probably shown that the corp. verged on bankruptcy in 1980 and was saved through a U.S. government guarantee of $1.5 billion in loans. Following this influx of cash, the corp. closed several plants, laying off thousands of workers. At the same time, it introduced a line of new vehicles that were very successful and generated record profits in 1984. In 1987, Chrysler acquired American Motors Co. the maker of Jeep vehicles, which continues to be a successful division.

However, in the early 1990s, Chrysler again posted massive losses due to poor vehicle sales during a recession in the U.S. economy. In 1998, Chrysler Corp. was acquired by Daimler-Benz. This acquisition however, proved to be a troubled relationship almost from the beginning. After several troubled years of operation which saw class action-suits brought by investors and difficulties integrating the two businesses, Daimler-Benz agreed to sell the company to Cerberus Capital Management in 2007. Two years later Chrysler would file for bankruptcy.