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Korea trade deal unlikely to benefit Chrysler, CEO says

The Detroit News | March 28, 2012

Korea trade deal unlikely to benefit Chrysler, CEO says

By David Shepardson
Detroit News Washington Bureau

Washington — Chrysler-Fiat CEO Sergio Marchionne told lawmakers Wednesday he is skeptical of the benefits of some free-trade agreements, and urged caution about proceeding with some new agreements.

In a Detroit News interview on Capitol Hill, Marchionne said he didn’t expect Chrysler would receive any benefits from the recently ratified Korea Free Trade agreement, but said he was withholding judgment on the U.S.-Colombia Trade Agreement.

"We have to make sure that when we sign these damn things, we can enforce them in terms of it being truly free," Marchionne said. "When (companies) tell you that maybe some of these things are really not very good, there’s a reason for this. It’s not because I’m into protectionist measures."

Marchionne noted that Fiat-Chrysler is a global company. "We’re just telling you that it’s not a fair world out there, so don’t think by legislating a free trade agreement you’re going to make the world fair," he said.

Marchionne said the benefits of some free trade agreements are in question. He warned Congress against moving forward without considering other barriers to entry by U.S. products besides taxes. "Free trade is a big issue for me," he said.

The United States Trade Representative’s Office is considering allowing Japan and other countries to join nine-party talks aimed at creating the Trans-Pacific Partnership. U.S. Trade Ambassador Ron Kirk has repeatedly said that Japan needs demonstrate a commitment to open its markets.

Ford Motor Co. has been strongly opposed to allowing Japan to enter the talks, as has a group representing Detroit’s Big Three automakers.

President Barack Obama has repeatedly said he wants to see more U.S.-built autos sold in Korea. In 2010, U.S. automakers exported just 7,500 vehicles to Korea, while Korea shipped 562,000 vehicles to the United States.

A report from the U.S. International Trade Commission in April 2010 said the deal would help Korean automakers more than U.S. companies.

Marchionne met with members of Michigan’s congressional delegation to discuss trade and other issues, and give them an update on Chrysler’s business plan.

Separately, Marchionne said the city of Detroit, which is in talks with the state of Michigan over its financial future, needs to address its fiscal problems. "Any restructuring story at the end of the day has got to restructure the cost base," he said. "I don’t know one (restructuring) that works without it."

Marchionne said he had studied an alliance with French carmaker PSA Peugeot Citroen. "I spent a long time considering it and talking to them a long time," Marchionne said. "There are things that line up in the stars … I can’t force the congruence of the skies. If it doesn’t happen, it ain’t gonna happen."

This month General Motors Co. announced it is taking a 7 percent stake in the French carmaker, as part of a new alliance aimed at jointly developing new vehicles.

In an interview Friday, GM CEO Dan Akerson said the alliance wouldn’t’ solve all of the automaker’s European issues.

Marchionne said Chrysler is having a strong sales month. He said he’s pleased with the progress the Fiat brand has made in the United States. "We’ve still got some work to do, but it’s going to be a good year," he said.

He echoed Akerson, who said last week that it is possible the U.S. auto market will total 15 million vehicles in 2012. "It’s possible, but I don’t think it’s likely," Marchionne said.

He said the U.S. economy is doing much better. "Europe is incredibly envious of what they are seeing over here. It’s not flawless," Marchionne said.

Unlike the visits of prior auto CEOs, Marchionne wasn’t asking Congress for any assistance. "I didn’t come here asking for money. I didn’t leave any money, which is a good thing," he joked.

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 source: The Detroit News