Chrysler 2003 Annual Report Download - page 6

5Report on Operations Overview
The definition and implementation of the Relaunch Plan
and the early introduction of new products marked the first
concrete steps in the process of streamlining the Group’s
corporate organization and relaunching its businesses.
* * *
In 2004, the Group’s Sectors are continuing the process
of industrial restructuring and rationalization that is already
underway, while working hard to improve their profitability.
The entire Group is committed to the success of this effort.
It is a difficult and challenging job that will require Fiat to find
structural solutions for any open industrial and commercial
issues. The Group’s Sectors and companies will be supported
in their endeavors by two main factors.
The first one is a strong balance sheet, with a liquidity
of approximately 7 billion euros.
The second is the operating tools that are available today
to help all Sectors across the board accelerate the achievement
of improved results. These tools include: the individual Sector
growth plans resulting from the overall Relaunch Plan; a
stronger senior management team; the vast number of new
projects (more than 800) that are being implemented under
the Relaunch Plan; and the powerful lever of technological
innovation, which is benefiting from the new stimulus provided
by increased R&D spending. Suffice it to say that in this area
alone Fiat plans to invest about 8 billion euros in four years.
In 2004, the Group’s operations will also fully benefit
from the introduction of new models and the positive
momentum that they will generate for all of the product lines
of the automotive Sectors — Fiat Auto primarily, but also
CNH and Iveco. Other positive factors include the synergies
generated through industrial cooperation projects, the close
collaborative relationship established with suppliers and the
renewed confidence that the Company is currently enjoying,
especially in Italy.
We remain firmly committed to working with unflagging
determination along the guidelines set out in the Relaunch Plan
to achieve its objectives.
We will continue our efforts to renew our product range
and improve our distribution organizations, investing 9 billion
euros in four years. In addition, we will further strengthen our
management organization by pursuing a strategy of bringing
in top level executives from outside the Group as well as
leveraging the competencies available inside.
We believe that people, with their wealth of knowledge and
their personal commitment, are the most important resource to
rely on as we work to build a new Fiat for the twenty-first century.
To improve our businesses cost competitiveness, we
will complete our previously announced plans to restructure
our manufacturing organization, while remaining mindful
of the social impact of each of our actions.
The environment in which we expect to operate in
the months ahead continues to be characterized by mixed
prospects. While the global economy is expected to grow
by 4%, driven mainly by growth in the United States and
Southeast Asia, the gains will be significantly smaller in
Europe, and in Italy in particular.
As a result, the automotive markets are expected to
hold relatively steady or undergo little changes, which will
cause carmakers to pursue very aggressive sales strategies.
* * *
During the first three months of 2004, demand for
automobiles and commercial vehicles in the markets where
the Group operates showed virtually no change from the
previous year, but shipments of agricultural equipment were
up significantly in North America. Within this framework,
the results for the first quarter confirm that the upward trend
that started late in 2003 is continuing.
Consequently, we can confirm the goals for the current
year as stated in the Relaunch Plan: operating breakeven
for the Group, a further reduction in Fiat Auto’s losses and
better operating results than in 2003 from all other Sectors.
Turin, March 26, 2004
Umberto Agnelli
Chairman
Giuseppe Morchio
Chief Executive Officer