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Fiat Chrysler North America ( formerly Chrysler Group )

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Now Fiat Chrysler Automobiles North America, the former Chrysler Group is third-largest homegrown US auto manufacturer. It is the parent for three distinctly American brands - Chrysler, Dodge and Jeep - and now also a small selection of Fiat's European vehicles. The Chrysler business has undergone numerous upheavals in recent years, and several different owners. Having first narrowly avoided collapse at the end of the 1970s, it was eventually acquired by Germany's Daimler in 1997 to form global giant DaimlerChrysler. Though presented at first as a merger of equals, this arrangement quickly turned into a takeover of the American business by its German partners. The experiment never really worked, and Daimler cut its ties after a decade, selling the business to private equity investors. By the end of 2008, the newly independent group was once again on the brink of catastrophe, saved from bankruptcy only by funding from the US and Canadian governments. After struggling for months to present the US government with a turnaround plan that would justify further investment, Chrysler finally agreed a strategic partnership with Italian carmaker Fiat, put into action in 2009. Fiat acquired management control of the business during 2011. After two years of further negotiations, it agreed a full merger of the two companies in early 2014 to create the combined Fiat Chrysler Automobiles Group.


Click here for a listing of Chrysler Agency Account Assignments from Adbrands.net. In the US, Kantar (in Advertising Age) reported measured expenditure of $1.09bn for 2016 out of an estimated total of $2.17bn. Biggest spending brands were Jeep (measured spend $332m), Ram ($240m), Dodge ($176m), Chrysler ($175m) and Fiat ($77m).


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In Spring 2009, Chrysler struggled to avert a complete financial meltdown while its controlling investors and the US government raced to structure an arrangement that would ensure its longer term survival. Under pressure of deadlines set by the Treasury, a deal was finally agreed with the Italian manufacturer Fiat and the UAW labour union. Chrysler's debts and much of its inefficient dealership network were washed away under Chapter 11 restructuring, and the resulting slimmed-down business was placed under the control of a Fiat-appointed management team. The Italian company was granted an initial 20% equity stake, not for cash, but for the injection of technology and small vehicle designs which could be built and marketed in the US.

That holding increased several times during 2011 and 2012. Following repayment of Chrysler's outstanding debts to the US and Canadian governments, Fiat's holding had risen to 58.5% of equity by the end of 2012. An accompanying upsurge in performance at Chrysler coincided with protracted stagnation in Fiat's core markets in Europe. As a result, the Italian group announced its desire to merge completely with Chrysler to create a single corporate entity. To do so it had to agree a price to buy out the equity it didn't already own. These shares were controlled by a UAW union medical benefits trust, and the two sides disagreed on the value of the holding. As a result, an IPO was pencilled for early 2014 to allow the markets to decide on the value of the UAW's shares. In the end though that plan was superceded by an eventual agreement on price. Fiat agreed to acquire the outstanding shares for $4.35bn, much of it drawn from Chrysler's own cash reserves.

Chrysler's predicament prior to its rescue by Fiat marked a return to problems with which it has struggled, off and on, for decades. Indeed the modern group's first brush with near-bankruptcy and government bailouts was in the late 1970s, and Chrysler's history since then has been marked by a series of peaks and troughs. The most recent trough began in 2000, two years into ownership by Daimler. An initial wobble between 2000 and 2003, was followed by a more serious downturn from 2005 onwards as a result of brutal competition and rising oil prices. Sales effectively halved over the next three years from a little under 3m vehicles in 2005 to just 1.45m in 2008. There has been steadily improving recovery since then. For 2013, for example, total worldwide sales for Chrysler Group rose 9% to 2,401,000 vehicles.

The merger of Fiat and Chrysler created a single global company. The former Chrysler Group has evolved into what is now FCA's NAFTA region, covering the US, Canada, Mexico and the Caribbean. Combined US registrations for 2016 across all brands were 2.27m vehicles (Focus2move figures), up slightly on the year before. That placed Fiat Chrysler as the #4 manufacturer by US sales, behind GM, Ford and Toyota. Some way behind was Canada (where FCA was the #2 manufacturer behind Ford with 278k vehicles), followed by Mexico (the #8 manufacturer with 88k).

Despite the company name, the Chrysler brand itself forms one of the smallest parts of the portfolio, now accounting for less than a sixth of unit sales. Indeed, since 2011, there have been only three models in that range. The brand has undergone several reinventions as it tried to find a comfortable niche for itself. During 2002, under Daimler, it was repositioned as a badge for more upscale, premium-priced vehicles. The group introduced two new models the following year, the sleek Crossfire sports model and much-hyped Pacifica sports tourer, but both encountered serious initial problems. The Pacifica in particular got off to a disastrously slow start that was subsequently blamed on a misconceived ad campaign featuring Celine Dion, as well as steep prices of up to $40,000 per car. Sales picked up towards the end of the year after a lower-priced model was introduced, and an even cheaper entry-level model was launched in 2004 at under $25,000. As a result, Chrysler began backing away from its premium positioning with a new marketing campaign to emphasize value, or rather "premium in the product, not the price".

The brand was lifted once again by the extremely strong reception to its 2005-model 300 sedan, introduced in late 2004, which ended up as one of the hottest cars of that year. The most significant new model during 2006 was the first Chrysler-brand SUV, the Aspen, launched towards the end of the year. However overall sales in the US came under intense pressure from 2006 as a result of rising gas prices and then the collapse in consumer confidence in 2008. Chrysler sales plunged from over 540,000 units in 2007 to an all-time low of under 170,000 in 2009. That fall was exacerbated by the elimination of several weaker models, including the Pacifica and Crossfire, Sebring and PT Cruiser. There has been steady recovery since 2010, but performance remains highly mercurial. In 2016, for example, US sales of Chrysler models slumped by more than a quarter to 239k vehicles, making it the #18 brand between Mazda and Buick. The old Town & Country minivan was relaunched in 2016 under the resurrected Pacifica name. Combined sales of the Town & Country and new Pacifica were 121k units, out of 232k sales in the US for the overall Chrysler brand.

The main mass-market brand in the Chrysler Group portfolio is Dodge, sales of which fell by a less dramatic margin during the 2008/09 crash than either of its two stablemates. This is now split into two separate divisions, with the Ram pick-up trucks range operating as a distinct brand business in its own right. Dodge was the #12 brand by US sales in 2016 at 506k vehicles. The best-seller under the Dodge umbrella is the Caravan minivan, which contributed 128k units. Other strong performers were the Journey and Charger (107k and 96k respectively). Another key benefit from the Fiat/Chrysler partnership was the introduction of the Dodge Dart compact in 2012, built around a chassis and technology derived from Alfa Romeo. It grew to become the #4 model in the portfolio with sales of 84k units in 2014, but sales collapsed during 2016. However, the main Dodge marque was outsold by its Ram trucks stablemate, which grew to the #11 brand on almost 543k units sold, almost all from the main Ram pick-up truck, which was the country's #3 top-selling vehicle behind the Ford F-series and Chevrolet Silverado.

The Dodge and Chrysler brands are now sold almost exclusively in the NAFTA region. The old Chrysler Group had marketed the Chrysler brand quite widely outside the US, in several cases as the badge for what were otherwise Dodge vehicles. The Dodge Caravan and Grand Caravan, for example, were marketed in Europe as the Chrysler Voyager and Grand Voyager; and the Dodge Neon as the Chrysler Neon. Dodge was itself introduced for the first time in mainland Europe in summer 2006, initially with the Caliber compact. Following the takeover by Fiat, new CEO Sergio Marchionne announced plans to phase out the Chrysler and Dodge names in Europe, rebranding them under local brands. The Dodge Journey, for example, is now sold in Europe and Asia as the Fiat Freemont. Combined global sales of Dodge in 2016 including Canada, Mexico and other markets were 665k units, just marginally more than Ram (Focus2move estimates).

The old Chrysler Group's most international brand is Jeep, arguably the world's first "sports utility vehicle", and still sold globally. In fact it is one of the real jewels of the combined Fiat Chrysler group, with sales jumping by 21% in 2015, and by another 15% in 2016 to 1.46m units, including almost 930k units in the US. It was the #17 best-selling car brand worldwide in 2016 and the #6 in the US.

A fourth Chrysler Group marque, Plymouth, was discontinued in 2001, and its main models - the Voyager and Grand Voyager minivans, Neon and Prowler sports cars - were initially absorbed into Dodge. They were later discontinued in the US. Instead, a new 4th brand arrived in the US in 2011 with the reintroduction of the Fiat brand for the first time in almost 30 years, in the form of the Fiat 500 mini. However despite some aggressive and high profile marketing, sales have been very weak, reaching less than half the target level set for the first year, and remaining far below expectations ever since. For 2016, US sales of the Fiat brand slumped by almost a quarter to less than 33k units, less than any of the group's mainline passenger cars. The group reintroduced Alfa Romeo into the US in 2016 for the first time since 1995, but sales of this marque too have been very weak, just 516 units overall in 2016.

The group also markets Maserati and Ferrari vehicles in North America. SRT is a separate unit that develops high-powered racing versions of existing group models such as the Grand Cherokee Jeep, Dodge Charger, Chrysler 300 and others. The group is also trying to establish Mopar, its parts and accessories business, as a key brand, and has launched a chain of Mopar Speedshop customisation centres in selected retail outlets.

Chrysler's own financial services division was cut loose during the 2008 restructuring. It launched a limited vehicle finance offering in 2009 in partnership with Ally Bank (the old GM Financial division). This was superseded in 2013 by new private-label loan and lease partnerships with Santander USA and US Bank, operating under the banner of Chrysler Capital.


After clawing its way back into profit for 2002, Chrysler Group was back in the red for 2003, dented by fierce competition in the US market, as well as the effect of currency fluctuations on results stated in Euros. After an 18% slump in 2003, revenues for Chrysler Group showed a small recovery in 2004, and rose by a further 1% in 2005 to €50.1bn. However, 2006 was another disappointing year, with revenues falling 6% to €47.1bn. Bottom line plunged from a net operating profit of €1.5bn in 2005 to a net loss of €1.1bn. As a private company, Chrysler didn't report financial results for 2007. Its performance for 2008 was revealed by the Chapter 11 filing, which declared a loss of $16.8bn on revenues of $48.5bn. For its first full year following Chapter 11, Chrysler Group reported revenues of $41.9bn, and a net loss of $652m. It returned to profit in 2011, with net income of $183m - even after a $550m cost for extinguishing debt - on revenues up 31% to $55.0bn. Further improvement resulted in a 20% increase in revenues in 2012 to $65.78bn and net income up more than 800% to $1.67bn.

For its final year as a separate entity, Chrysler group reported revenues of $72.14bn in 2013, up 10%. Net income soared by 65% to $2.76bn, largely as a result of a tax-related accounting adjustment. Adjusted net income excluding that gain rose 9% to $1.82bn.

For 2014, Fiat Chrysler's NAFTA region contributed revenues of €52.45bn, up 15% on the year before. EBIT slipped 28% to €1.65bn mainly as a result of increased industrial costs.

Fiat's Sergio Marchionne became CEO of Chrysler Group in June 2009 following its emergence from Chapter 11, while also being CEO of Fiat Group. Robert Kidder initially replaced Bob Nardelli as executive chairman, but Marchionne inherited this role too at the end of 2010. Tragically, Marchionne died in July 2018. Michael Manley, previously head of Jeep and Ram, was named as CEO in Marchionne's place.


Prior to its merger with Daimler-Benz, Chrysler had already spent 90 years on a bumpy ride of boom, bust and boom again. Walter P Chrysler was a successful manager at Chicago Great Western Railways when he bought his first car in 1908. Fascinated by the technology, he promptly took it apart and rebuilt it several times to understand how it worked. Four years later he joined Buick, already part of the General Motors combine, as production manager and rose through the ranks to become the division's president and general manager in 1917, then the first vice president of General Motors Corporation in charge of production. But Chrysler didn't get on with GM president William C Durant, and in 1920 he resigned. In his time with Buick, he'd built up a reputation as a keen businessman, and was immediately recruited to rescue two separate struggling engineering companies, Willys-Overland and the Maxwell Motor Company. As part of the deal he negotiated for himself the then unprecedented salary of $1m a year. He became chairman of Maxwell in 1921, and changed its name to Chrysler Corporation four years later.

In 1924, Willys-Overland launched its new model under the Chrysler name. The "Chrysler Six" caused a sensation at the time as one of the fastest cars on the road, with a top speed of 70mph. Chrysler sold 32,000 units in the first year, then the most successful US car launch ever. By the end of 1925, Chrysler was making annual profits of $4m. As other US car companies amalgamated or fell by the wayside, Chrysler strengthened his hold on the industry. In order to mirror the range of cars sold by GM, he set about established several different brands. Plymouth was launched as a popular low-end brand, with DeSoto as a mid-market family car. Their success allowed Chrysler to make a bid for his considerably bigger rival Dodge Brothers in 1929.

John and Horace Dodge had set up in business in Canada in the early 1900s, adapting their father's bicycle workshop to make components for the fast-expanding new auto industry. Their first contract was with Oldsmobile, but in 1903 Henry Ford offered them a share in his new auto manufacturing business in return for a steady supply of engines and other parts. For the next 12 years, virtually all Ford cars were made with Dodge parts, but the brothers dissolved the partnership with Ford in 1914 to set up on their own. Their first model, a rugged and durable design known as Old Betsy, set the tone for many of the vehicles that followed. During World War I, the company established a name for its motor trucks, but Dodge also produced attractive tourers and sedans. John Dodge died in 1920, followed by his brother five years later. Investment bankers Dillon Read & Co bought the company from their widows for $146m, at the time the biggest cash transaction in history. In 1928, they sold the business on (at a loss) to Walter Chrysler.

The purchase of Dodge established Chrysler as the country's third largest auto manufacturer behind Ford and GM. Walter Chrysler celebrated by commissioning the construction of a new building in New York. Completed in 1930, the Chrysler Building was briefly the world's tallest, with 77 floors, until overtaken by the Empire State a year later. By 1936, Chrysler was producing a million vehicles a year, a quarter of all cars in the USA and Canada, and had overtaken Ford to become the country's #2 carmaker. Chrysler died in 1940, aged 65.

The Second World War brought significant benefits to Willys-Overland, then still separate from the main Chrysler business. The company was commissioned to produce a "general purpose military vehicle", generally known as a GP and later abbreviated as "jeep". Several manufacturers produced their own jeeps, including Ford. After the war ended, Willys struggled to find a viable replacement for its military vehicles. In 1953, the business was acquired by Kaiser Industries. Meanwhile Chrysler too had begun to lose its way without Chrysler himself to call on. During the fierce competition of the post-war years, other manufacturers spent money on introducing new models every year, but Chrysler kept costs low by marketing the same designs year-in, year-out. As a result the company lost share, slipping back behind Ford in 1950.

This misjudgement of market sentiment increased during the 1960s. The group bought into French carmaker Simca in 1958, and began importing its models into the US. In 1964, Chrysler also took a stake in British carmaker Rootes, makers of a range of small marques including Hillman, Sunbeam-Talbot and Humber. Three years later US company took control of Rootes, yet struggled to turn a profit on its UK operation. The American market wasn't ready for these small cars either, preferring old-style gas guzzlers. Chrysler switched back to production of big cars, but too late, just as the oil crisis hit in the 1970s. And while the competition changed its model size to allow customers to spend less on gas, Chrysler kept turning out large cars. Despite a late deal to import Japanese Mitsubishis, Chrysler's financial problems spiralled. By 1978, the company was close to bankruptcy, only saved when US President Jimmy Carter authorised federal loans of $1.5bn. The same year, former Ford president Lee Iacocca was appointed president of Chrysler, and he set about turning the company round through a high profile marketing campaign, which featured him as its star.

Meanwhile Chrysler saved costs by selling off underperforming businesses, including all its European operations (to PSA Peugeot Citroen), as well as its defence business and marine division. By 1983, the company had returned to profitability, repaying its federal loans before schedule. The car business was revitalised by the launch of the first minivans in 1983. Built on a car chassis, the Dodge Caravan and Plymouth Voyager proved a huge success for Chrysler in the mid-1980s. The group also went shopping, acquiring jetmaker Gulfstream (sold 1990) and various finance businesses, as well as a stake in Italian manufacturer Maserati. In 1985 Chrysler and Mitsubishi set up the Diamond-Star Motors joint venture to build small cars in the US, and in 1987, Chrysler rescued American Motors Corporation, then the #4 carmaker, for $800m. Formed originally from the merger of the Nash and Hudson car marques in 1954, AMC had struggled to compete with Detroit's big three during the 1970s, and control was eventually acquired by Renault of France. The French company couldn't make AMC work either, and pulled out of the US altogether in 1987. Ironically, Chrysler's purchase of AMC brought the Jeep - now a brandname in its own right rather than merely a generic description - back into the fold. Willys-Overland had been acquired by AMC in 1970.

Chrysler Group also resumed business in Europe, first exporting a limited number of models, then setting up a manufacturing plant in Austria to build Voyagers and Cherokee Jeeps. Other acquisitions included the luxury Italian marque Lamborghini (sold 1993), and US car rental agencies Thrifty, Snappy, Dollar and General (also sold). By the late 1990s, Chrysler was very much back in business, with its highest market share in the US since before World War II. The group's last reported sales as an independent in 1997 were $59bn. A year later the company was acquired by Daimler-Benz.

The integration of the two companies seemed at first to have been achieved with remarkable speed and skill. However, press commentators quickly seized upon the departure of several high-ranking Chrysler executives to suggest that there was discord within the new group. American employees had begun to complain there was a bias towards native Germans among senior management (by May 1999, only one in five of the senior managers of DaimlerChrysler were from the US), while German employees complained about the overly-relaxed style of their US counterparts. By 2000, Chrysler was coming under increasing pressure as profitability slumped. The German company fired Chrysler's American CEO in November, replacing him with German-born Dieter Zetsche. Soon afterwards, group CEO Jurgen Schrempp suggested in a press interview that he regarded the US company as a "division", rather than a partner. Daimler was then sued by a group of US investors led by entrepreneur Kirk Kerkorian, who claimed they had been misled as to the German company's intentions. Meanwhile, in an attempt to restore performance at Chrysler, the group announced sweeping cuts in early 2001. The company shed 26,000 US jobs by 2003 and closed or cut production at six factories.

In late 2002 the group tied up a $14m three-year marketing arrangement with songstress Celine Dion to appear in and provide music for an advertising campaign to launch Chrysler's new Pacifica model. It was subsequently reported by Advertising Age that Chrysler's main agency BBDO had warned the client against selecting the singer, who generally appeals to an older market than Chrysler's target audience. But the company's marketing boss Jim Schroer was apparently insistent on using the singer. When BBDO declined the opportunity to handle the launch with Celine Dion, the campaign was assigned to Arnell Group, who produced a series of lavish commercials designed to shift the Chrysler image further upscale. But the ads got poor reviews (at best) and failed significantly to deliver results. Chrysler was reported to have targeted sales of 60,000 Pacifica models in their first year, but sold less than 5,000 in the first three months. Jim Schroer resigned from Chrysler, and Dion herself was subsequently dropped from the ads, although her songs continue to be featured.

Meanwhile CEO Dieter Zetsche continued to press ahead with his restructuring, and performance slowly improved. After a further repositioning during 2004, performance responded strongly and the group reported record sales for the year. However there were further sharp declines in 2005 and 2006. As a result, DaimlerChrysler began talks to sell part or all of the Chrysler business. One of the first firm bids came from investor Kirk Kerkorian, who had long been a fierce critic of Daimler's management of Chrysler. He offered to buy the business for $4.5bn in cash, subject to finalisation of a satisfactory long-term agreement with labour unions. However, DaimlerChrysler declined the opportunity to negotiate in detail with Kerkorian and instead reached a deal with private equity group Cerberus.

In May 2007, private equity group Cerberus Capital Management agreed to acquire just over 80% of Chrysler Group from DaimlerChrysler. (Daimler retained the remaining 20% until 2009). The German group was not paid for the shares, and instead itself contributed $650m towards restructuring of its former subsidiary. But Daimler was able to remove an estimated $18bn of Chrysler-related pension and healthcare liabilities from its balance sheet. Cerberus meanwhile refinanced the business with an additional capital contribution of $7.4bn. Bob Nardelli, formerly chairman & CEO of Home Depot, was appointed to the same role at Chrysler Group, and set about brokering a deal with the United Auto Workers union to reduce that healthcare benefits bill without resorting to Chapter 11 bankruptcy protection. Completion of the transfer to Cerberus was completed in August 2007. An agreement over labour terms was thrashed out in October 2007, under which the bulk of Chrysler's healthcare liabilities (which had risen to $19bn) were transferred to a separate company-funded but union-run trust. Shortly afterwards, Chrysler announced plans to make deep cuts of almost half its North American workforce by 2010, and to drop four of its existing models.

In 2008, Chrysler took the first tentative steps towards a partnership with Japanese manufacturer Nissan. Under that arrangement, Nissan was to supply a version of its Versa sedan to be sold by Chrysler in some South American markets from 2009. The following year, Nissan was set to begin manufacturing a new small car designed by Chrysler for sale in North America and Europe; in return Chrysler would commence production of a pickup truck for sale by Nissan in the US in 2011.

However, all of these plans were overtaken by the dramatic decline in first US and then worldwide auto sales during the course of the year. Attempts were made in October to broker a merger with General Motors, also close to collapse, but these were abandoned as the scale of both groups' problems mounted. By the end of the year, both Chrysler and GM were in desperate negotiations with the US government to receive financial assistance to avoid bankruptcy. A short-term loan of around $17bn was made available at the 11th hour. Both companies were given until the end of March 2009 to come up with a plan which would justify further investment.

In January 2009, the group unveiled the outlines of a tentative alliance with rejuvenated Italian manufacturer Fiat, which had been seeking ways of breaking back into the US market. Fiat offered to take a minority shareholding in Chrysler, provided the US government made further funding available to keep the business afloat. Fiat said it would not itself invest any cash, but would provide technology and vehicles for Chrysler to build and market in the US. After consideration, that plan was not considered by the government to be sufficient to justify further long-term investment because of Chrysler's other debts. Set a 30 day deadline to improve its plan, the company was able to strike a deal with the UAW union and some of its lenders to reduce its liabilities, and also agree the outline of a slightly improved partnership with Fiat. Some debtholders held out for a better deal, however. As a result, the group filed for bankruptcy in May to clear out its more obstructive liabilities, although the government agreed to provide further cash to fund that process and the company's future plans. After a brief stay in Chapter 11, Chrysler emerged from bankruptcy in June 2009, under Fiat control. The tentative OEM partnership with Nissan was cancelled in August.

Jim Press, originally recruited from Toyota North America in 2007, was promoted to the role of deputy CEO, with responsibility for the three main brand families of Dodge, Chrysler and Jeep mid 2009. However he announced his departure two months after the Fiat takeover and left at the end of the year.

Last full revision 19th June 2017

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