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Cover Story: A Detroit Commitment

Sergio Marchionne leads Chrysler Group to a prosperous future

Pages 8-10

Since Sergio Marchionne picked up the mantle of Chrysler Group LLC Chairman and CEO in 2009, he has led the automaker from being seemingly doomed to becoming the fastest growing Detroit automaker, recording 32 consecutive months of year-over-year sales increases driven by its full lineup of new and refreshed cars and trucks, including the all-new 2013 Dodge Dart.

As Marchionne and his team have rebuilt Chrysler Group into a profitable and growing enterprise, they have embraced the Detroit region. Under Marchionne’s leadership, Chrysler Group is adding jobs and new investments in Southeast Michigan; championing United Way for Southeastern Michigan; and opening office space in the heart of downtown Detroit. And it is drawing national attention to the company and the region with such unprecedented advertising as its 2011 “Born of Fire” Super Bowl commercial for the Chrysler 200. The commercial featured homegrown rap star Eminem against the backdrop of Detroit and launched the “Imported from Detroit” tagline.

“Those who still doubt that we would use the second chance taxpayers granted us to build something better and long lasting, or that we would act in good conscience to repay the faith shown in us, only have to come here and see for themselves how seriously we have taken our responsibility,” Marchionne said Nov. 15 at Detroit’s Mack 1 Engine Plant announcing a $240 million investment and the addition of 1,250 new Michigan jobs. “Today is another important milestone in living up to the commitment we made, first and foremost, to you, to all the Chrysler employees, and also to the city of Detroit, Southeastern Michigan and our country.”

Chrysler Group’s Nov. 15 announcement at Detroit’s Mack 1 Engine Plant took Chrysler Group’s total investment in Southeast Michigan plants to $1.7 billion since June 2009. Additionally, Chrysler Group increased its employment in the state 34 percent to about 26,600 as of June 30, 2012.

Among its larger job announcements have been the addition of second and third crews of 1,100 new jobs each at Jefferson North Assembly in Detroit, where Chrysler Group manufactures the Jeep Grand Cherokee and Dodge Durango; the addition of a 900-person shift at Sterling Heights Assembly, once scheduled to close and now manufacturing the Chrysler 200 and Dodge Avenger; and the return of 150 jobs to Detroit with the reopening of Conner Avenue Assembly, where Chrysler Group is gearing up to manufacture the 2013 SRT Viper.

Throughout the U.S. and Canada, the automaker has announced $4.75 billion in new investments and added more than 16,400 employees since June 2009. It also repaid in full and six years early – yielding a 19.7 percent annual rate of return – the government loans it used to begin anew after the economic crisis of 2009.

In its first 19 months, Chrysler Group launched an unprecedented 16 new and significantly refreshed vehicles.

The first of those new Chrysler Group vehicles was the 2011 Jeep Grand Cherokee, built at a cleaned and revitalized Jefferson North in Detroit, and launched in 2010 with a commercial produced with one of Chrysler’s advertising agencies, Wieden + Kennedy. Marchionne credits that first Jeep Grand Cherokee commercial with beginning the steady beat of conversation-stirring Chrysler Group advertising.

John Jay, global executive creative director for Wieden + Kennedy, said that commercial was driven by the message the agency was hearing from Chrysler Group in conversation: that the ultimate priority for the redesigned SUV was quality.

“We riffed on that pride in workmanship,” Jay said while speaking about the Grand Cherokee commercial during an October event with Marchionne at Ohio State University.

The commercial, set to the cadence of an automotive plant’s stamping presses, heralded the importance of the United States reclaiming its role as a manufacturer of high-quality products.

“That was a turning point,” Marchionne said, “because it was the first car coming out of the company since its bankruptcy.”

The advertisement, for what is now the most-awarded SUV ever, laid the foundation for the marketing campaigns Chrysler Group would next launch, including the 2011 Super Bowl commercial with Eminem and the 2012 Super Bowl commercial with Clint Eastwood, Marchionne said.

“Chrysler’s commercials have been serious, even wordy, and have cast the company as a champion of American values such as hard work and resolve,” the Detroit Free Press wrote.

The “Born of Fire” Super Bowl commercial with Eminem was intended to convey a number of messages, Marchionne said during an event at the University of Michigan.

“It shows the spirit of Detroit, a city devastated by crisis that found the strength to get back on its feet,” he said. “It pays tribute to our  industrial roots and the culture of action. It expresses the pride of Chrysler, a company that went to hell and back and is determined to regain its rightful place.

“But beyond these messages, a video like this could only have been produced by people who are able to think and work outside the box,” Marchionne said.

That, he said, is what the company is doing every day, in the way it develops cars and runs every aspect of its business: finding ways to eliminate barriers to improvement and to build something great. Marchionne and his team are applying that mindset not only to how they contemplate their own business, but also to how the company can best contribute to the communities where it operates, as a corporate citizen. And Chrysler Group has taken a particular interest in the city of Detroit.

“We made a decision when we started this back in 2009 that we would make an effort to bring back manufacturing into the U.S. and make it a viable business, and I think we have,” Marchionne said.

“Detroit can only be rebuilt through mechanisms like this,” he said at the Mack event. “You’ve got to invest in plants and businesses in the area to effectively cause the repopulation of your residential areas, and people that live close to the plant live here, and effectively start rebuilding this city as a viable community. The more people who do this, the better Detroit ultimately will be.”

Chrysler Group’s industrial efforts already have created some draw for the city, too.

For example, professional pharmacy fraternity Lambda Kappa Sigma hosted its 2011 national conference at The Westin Book Cadillac hotel in downtown Detroit specifically because the group was inspired to visit Detroit following Chrysler’s “Imported from Detroit” Super Bowl spot.

Chrysler Group is also reconnecting with regional safety net and cultural organizations that are working to rebuild and strengthen following the economic crisis in 2009.

“In Michigan and Detroit, Sergio is a rock star,” former Michigan Gov. James Blanchard told Bloomberg. Blanchard’s three-year term on Chrysler Group’s board expired in June.

Marchionne has taken a personal interest, too, agreeing to serve as campaign chair for United Way for Southeastern Michigan’s 2012 fundraising and education campaign and committing Chrysler Group resources to promote the growth and impact of the campaign.

The automaker and its brands have become involved with several Detroit and regional cultural and community groups, providing monetary support to the newly opened Michigan Science Center in Detroit, serving as presenting sponsor of the 2012 Detroit Jazz Festival, coordinating events with the Detroit Symphony Orchestra, participating in youth training sessions with the Jalen Rose Leadership Academy and sponsoring 19 FIRST Robotics teams, among other activities.

And, of course, Chrysler Group moved its Great Lakes Business Center and some other business functions to the newly renamed Chrysler House in downtown Detroit in the landmark building, which is walking distance from Campus Martius and Woodward Ave.

“The future of Chrysler Group and the city of Detroit are inextricably tied,” Marchionne said. “In order to reflect this, we want to go beyond spiritual or symbolic evidence of our faith in the city’s future by establishing a physical presence people can see and be proud of.”

Detroit champion and Rock Ventures and Quicken Loans Chairman Dan Gilbert told Paul W. Smith on WJR-AM that Chrysler’s move downtown: “was a great day for Detroit. I mean, for a company like Chrysler to be in the heart of Detroit is a great thing for the city.”