Jerry York cautious on Chrysler prospects
DETROIT (Reuters) - A former top executive at Chrysler said on Monday that the No. 3 U.S. automaker, which emerged from bankruptcy in June by selling most of its assets to Italy's Fiat SpA (FIA.MI), had less than a 50 percent chance of long-term survival.
Jerry York, who once worked as chief finance officer at Chrysler and as a director General Motors, but is best known as an adviser to billionaire investor Kirk Kerkorian, said two big question marks continued to hang over Chrysler.
The first, York said, was timing. "Will some combination of industry sales, and product -- including product from Fiat -- get there in time before they run out of cash?"
The second question, York said, was perception. "As we all know, Fiat for historic reasons, does not have a great reputation in this country," he said.
"So it's a question mark in my mind, and in the minds of most people I talk to -- how many units based on Fiat platforms can really be sold?"
Chrysler is unveiling a five-year business plan on Wednesday for turning itself around. Many analysts say Chrysler desperately needs new vehicles to steer its faltering operations toward recovery. Chrysler's U.S. sales plunged 42 percent in September from a year ago.
October sales numbers will be released Tuesday.
Sergio Marchionne, the head of Fiat, said recently he was surprised at the lack of product development done by Chrysler's previous owners, Cerberus Capital Management CBS.UL and Daimler AG (DAIGn.DE), in the two years before his arrival in June.
York also blasted Daimler, saying the German automaker had failed "to do the right things to keep Chrysler in a sustainable situation."
Among the failures York cited, was Daimler's inability to increase Chrysler's penetration in foreign markets. He said that if he was in Marchionne's shoes, he would be pushing Jeep, rather than Chrysler or Dodge, overseas.
Marchionne has said Chrysler is in a "cleansing process" similar to one that he led in 2004 when he started a successful turnaround of Fiat, and Chrysler's weak September sales results do not reflect the true viability of the company.
(For summit blog: blogs.reuters.com/summits/)
(Reporting by James B. Kelleher; Editing by Tim Dobbyn)
